Q1 2021 SI-BONE Inc Earnings Call
Good afternoon, and welcome to S. Iphones first quarter earnings Conference call.
At this time all participants are in a listen only mode. We will be facilitating a question and answer session towards the end of today's call.
As a reminder, this call is being recorded for replay purposes, I would now like to turn the call over to Matt <unk> from the Gilmartin group for a few introductory comments.
Okay.
Thank you for participating in today's call. Joining me are Laura Francis Chief Executive Officer, and onshore Marsh worry Chief Financial Officer earlier today Si bone released financial results for the quarter ended March 31, 2021, a copy of the press release is available on the company's website before we begin I'd like to remind you that management will make statements during this.
Call that include forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provisions of the <unk>.
Private Securities Litigation Reform Act of 1995 any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements. These forward looking statements are based on the company's current expectations and inherently involve risks and uncertainties. These risks include the impact of COVID-19 pandemic will have on the ability.
And desire of patients and physicians to undergo procedures using the ICU implant system. The duration of the COVID-19, pandemic and whether the COVID-19 pandemic will recur in the future. Other forward looking statements include our examination of operating trends and our future financial expectations, such as expectations for hiring surgeon training and adoption active.
Surgeons, new products clinical trial enrollment and reimbursement decisions are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.
Accordingly, you should not place undue reliance on these statements for a list and description of the risks and uncertainties associated with our business. Please refer to risk factors section of our most recent quarterly report on form 10-K filed with the security and Exchange Commission on March 10th to 2021.
Si bone disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise. This conference call contains time sensitive information and is accurate only as of the live broadcast today may three 2021 with that I'll turn the call over it.
Laura.
Thanks, Matt.
Good afternoon, and thank you for joining us before we get into the details I'd like to take a moment to thank all the health care workers, who continue to work relentlessly, especially those who are administering the COVID-19 vaccine.
Help reduce the spread of the virus and allows society to return to normal.
I'd also like to officially welcome onshore Maheshwari, our new CFO, who is joining us on today's call.
Onshore is an experienced financial executive with an impressive record of building high performance teams to scale global health care and manufacturing organizations I'm very excited to be working with onshore and know that he will be a great addition to our team.
Now turning to the results.
I'm pleased to report that the Si bone team continues to navigate and pushed through these unique and challenging time with tremendous effort.
We got off to a good start in the first quarter generating total revenue of $24 million or 22% increase compared to the first quarter of 2020.
Although procedure volumes were negatively impacted by persistent COVID-19 headwinds and extreme weather conditions in parts of the country in January and February we ended the quarter with a record March I'm proud of our team's strong execution this past quarter and confident in our ability to accelerate our capture of the multibillion.
Dollar market opportunity and the fake Republic space.
Especially as COVID-19 becomes less of a headwind to the overall economy and health care system.
We also started to see signs of a recovery in Europe with total international revenues, increasing roughly 10% compared to the first quarter of 2020.
Growth in the first quarter of 2021 was led by relative strength within Germany, and France, partially offset by continued challenges in the UK and other parts of Europe due to COVID-19.
We also received EU clearance for our trauma indication during the quarter, an additional growth driver as we focus globally on minimally invasive Si joint fusion adult deformity, and trauma applications and the cycle of public space.
As an organization, we continue to focus on execution, which is reflected not only in our revenue growth, but also our ability to manage expenses.
One of the most impactful initiatives that has increased surgeon utilization rates and reduced costs has been the rollout of the Si bone stimulator surgeon training system.
We now have 24 S hidebound training simulators and worldwide use.
This innovative training platform eliminates many of the barriers that we historically had to overcome prior to the COVID-19 pandemic.
Our sales and medical affairs teams can now train surgeons on demand bypassing the cadaver lab, which eliminates radiation exposure for surgeons and staff.
Additionally, there are no travel requirements from the part of the physician, which significantly reduces overall costs and logistical planning.
Well this has been a positive for the company from an efficiency perspective. The key driver has been the positive reception from the surgeon community.
The number of trainings continues to ramp and we expect this remarkable capability will attract many more surgeons in the future where.
We're targeting the approximately 7500 spine surgeons in the United States of which 1600 have been trained and completed a procedure to date.
We're also making an impact but there is still much opportunity ahead.
The enthusiastic reception of our simulators over the last nine months and the ease with which surgeons can be trained have allowed us to more effectively target new surgeons and reengage with inactive surgeons.
While we've been able to manage expenses quite well to start the year, we continue to make great progress on expanding our sales force specifically at the end of March we had 75 direct sales reps and 52 clinical support specialists.
And we remain on track to end the year with 90 and 60, respectively.
Thoughtful strategy to expand our sales force will allow us to meet our long term growth objectives.
As we have communicated in the past the productivity ramp for the average sales Rep takes approximately 12 months.
The reason for this ramp is due to the level of training we require our reps to go through to maximize their success in the field.
Further once in the field our reps are instrumental in training surgeons through the first few cases, which includes precision diagnosis and treatment protocols.
Next I'd like to talk briefly on our direct to patient marketing initiative, although it's still early we're encouraged by the results are.
Our team was particularly excited to see our first patient case from our direct to patient marketing tests.
We're now in the midst of a second television marketing test program in multiple cities as well as making improvements in the operations related to patient inquiries to our call Center.
We'll be evaluating the results of the second direct to patient TV test in the next few months.
The direct to patient advertising strategy is an additional tool to educate patients and will continue to take a measured approach.
Turning to product updates were also excited to announce the recent launch of Icu's torque our highly differentiated three D printed threaded implant for pelvic trauma and minimally invasive separately, our joint fusion applications I tease torque solves an unmet clinical need for low energy pellet green fractures compared.
The bed rust sacred Plasty and traditional trauma screws.
We're also targeting chronic sacroiliac joint pain after high energy pelvic green trauma.
Our engineering team incorporated features for stable bone integrating scaffolding across the joint and fracture site for fusion improved healing an earlier patient mobility.
Our torque lock threads have a hook design and anatomical zone specific trend pattern for enhanced fixation, providing approximately 10 times the rotational resistance upon insertion of trauma screws.
Based upon these trauma applications, we believe iqs torque opens up an attractive adjacent market worth approximately $350 million, where we were not able to compete before.
I vies torque also has applications in the primary Si joint fusion market.
Last year, we estimate our competitors generated approximately $40 million of business in our core market.
Ice's torque leapfrog these other products, creating an opportunity to convert competitive business.
Our fusion three D surface mimics cancellus bone for better bony on growth and growth and through growth.
And our Intel of harvest technology includes cutting flutes, the self harvest host phone and funnel it into the fenestration for optimal bone integration.
These technological advances may result, in more robust and faster fusion of the Si joint.
Our corporate web deck on the Investor Relations website has more information on I've used to work.
While we do not anticipate a meaningful revenue contribution from torque in 2020. One we believe the trauma market represents a key element of our strategy to improve sales synergies.
And our total addressable market opportunity and become a comprehensive fake or public surgical solutions company.
We continue to be pleased with the progress of bedrock into.
Interest in the bedrock technique, among deformity surgeons, including many key opinion leaders has provided our sales reps with access to important medical centers.
This enables our reps to train a broader group of spine surgeons, including residents and fellows at these centers on both the bedrock technique and minimally invasive sacroiliac joint fusion.
To date, we've conducted training courses at over 100 academic centers in the U S where more than 600 surgical residents and fellows had been trained.
In addition, bedrock is helping drive the growth of our business. We also continued to make progress on our second generation adult deformity product.
On the reimbursement front, we continue to add exclusive coverage from some of the largest health insurance providers in the United States.
Most recently M. B P health care established exclusive coverage for the I T implant system effective April 1st.
N V. P health care is now the 38th I fuse exclusive payer, adding an additional 500000 covered lives.
Overall reimbursement continues to be a tailwind for the company with broad coverage across the United States with total covered lives eclipsing $300 million, including approximately 80 million lives covered exclusively for procedures using iqs.
We're also excited to welcome Helen low to the board of directors Helen joins at Si bone with over 25 years of experience in brand and growth marketing at both Fortune 500, and early stage technology companies. Currently the flow is the senior Vice president of digital product and client marketing at Charles Schwab.
Where she has held roles of increasing responsibility since 2004.
Helen holds a b S and industrial engineering and M B a from Stanford University.
Finally, the appointment of onshore completes the recently announced senior leadership transition, which includes me succeeding Jeff on the CEO and being added to the board of directors.
And Tony Recupero, becoming president of commercial operations.
As a reminder, Jeff is not going anywhere and we'll continue to be very involved in the company as executive Chairman.
Before I turn it over to onshore let me close by mentioning our ongoing focus on ESG matters.
This focus is an important aspect of our business and it's an expectation we hear from investors employees and other stakeholders and it's one we take very seriously and.
In the next few days, we plan to publish an updated environmental social and governance shareholder letter on the Investor section of our corporate website.
If anyone has any questions or interest in our ESG efforts, please reach out to myself onshore or Matt back so at Yale Martin.
With that I'll now turn the call over to onshore our chief financial officer to provide more detail on our financial results.
Thanks, Laura I'm excited to be joining our Si bone at such a pivotal time I look forward to partnering with the entire EFI bone team to continue to execute on our growth and value creation strategy.
Deliver innovative and differentiated products to surgeons and improve patients' lives.
I'm also looking forward to developing strong relationships with the investment community and hope to see menu of you at upcoming investor events.
Not turning to the financials.
First quarter total revenue of $24 million increased 22% compared to the prior year period.
U S sales of $18 $8 million, which accounted for approximately 92% of total revenue for the quarter increased 23% compared to the prior year period.
International revenue of $1 $7 million increased 10% compared to the prior year period.
Although procedure volumes were negatively impacted by persistent COVID-19 headwinds and extreme winter weather conditions in parts of the country in January and February we ended the quarter with a record March as COVID-19 cases started to decline.
Similar to what we experienced in the third quarter of 2020, we believe March procedure volumes benefited from an increase in rescheduled cases from November through February.
Gross margin for the first quarter of 2021 was flat compared to the prior year period at 89% as higher cost of operations to support the growth of the business were offset by lower inventory write downs.
Operating expenses increased 11% to $29 $8 million in the first quarter of 2021 as compared to $26 $8 million in the prior year period.
The increase was driven by higher sales and marketing costs related to increased sales hiring research and development expenses for new product development and increased stock based compensation expense.
Our operating loss was $11 6 million in the first quarter 2021, as compared to an operating loss of $11 $9 million in the prior year period.
Our net loss was $12 $2 million or <unk> 37 per diluted share for the first quarter of 2021 as compared to a net loss of $12 8 million or 47 cents.
Per diluted share in the prior year period.
As of the end of the quarter, our cash and marketable securities were approximately $185 million and long term borrowings were $39 $5 million.
Now I'd like to provide an update to our 2021 outlook.
Im encouraged by the strong underlying momentum in our business, we remain cautious given the uncertainty surrounding COVID-19 cases, and the potential impact from hospitals.
Our guidance is highly sensitive assumptions on a global recovery, which anticipates continued progress on vaccinations and immunizations, resulting in normalized key scheduling an elective procedure levels progressing throughout the year.
While the first quarter was a good start to the year, we continue to take a measured approach given the early stages of the COVID-19 recovery.
Based on this we continue to expect total revenue of $92 million to $94 million representing growth of 25% to 28% compared to full year 2020.
Additionally, we expect to end 2021, with approximately 19 direct sales reps and 60 clinical support specialists up from 64% and 58, respectively at the end of 2020.
Lastly, we expect gross margin to trend towards the mid to high 80% range in 2021, as we increase spend in operations to support growth of the business.
I will not turn it back over to Laura.
Thanks onshore.
I'm excited to become the CEO of outside bound during this period of inflection and market development for the company.
I've greatly appreciated the support and enthusiasm of our employees board and investors since the announcement in January.
Been with US a bond for six years now.
I can say without hesitation that it's been the best experience of my career.
<unk> done now our executive Chairman, London vision, and grit to lead us through the early stages and challenges of building a new market Tony.
Tony Recupero now our president of commercial operations.
My thought partner since joining the company understanding from his experience with Kai found in other companies how to build a market and rapidly expand our sales team in our space.
Onshore bring a new perspective to our leadership team positioning us to accelerate our capture of the multibillion dollar sacral pelvic solutions market.
And I look forward to meeting our investors to discuss our market development plans.
I'll now turn the call over for questions operator.
Thank you, ladies and gentlemen, if you like to ask a question. Please press. The Star then the one key on you touched on telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.
Now first question coming from the line up Bob Hopkins with Bank of America. Your line is open.
Oh, great. Thank you and good afternoon.
Or is it a place to start and you know it sounds like the strong March bookings you guys talked about on the last call turned into strong March revenue and so I was just wondering is it you know what we've seen from some other companies that maybe March was around 40% of the of the total quarter given the slow start to the year.
Is that a rough way to think about what happened to you guys in March and did you continue to see decent trends are in the month of April. Thank you.
Yeah, I think Bob and in terms of how the quarter developed we had talked about January and February being impacted.
By COVID-19 cancellations, but then as we mentioned actually seeing a record March and in terms of the you know how how we're looking at that and we think that a couple of things happened in March 1st of all we were not.
Hindered by cancellations due to COVID-19, but in addition to that we benefited from some of those rescheduled cases, we've been fairly open about cancellations that we saw in the month of November and December January.
And abating, a little bit in February.
We think that March really accounted for the bulk of those are the increases that we saw in March were a result of those particular items.
In terms of what we actually saw in April.
April continued to show strength.
However, a little lower than than March given that March was was a high watermark a high watermark for the company overall as a business. So as I said the scheduling of cases is dependent on several factors and and in COVID-19 has increased some lumpiness in the month to month trends.
But with that said as the risk of COVID-19 continues to subside, we will remain confident that the demand for our solutions will continue to drive steady volume growth throughout 2021.
Okay, well, thank you for that.
Assume then from the sound of it that maybe March was a little bit better than 40% of the of the total quarter.
Just given your given your comments there.
Is that is that roughly fair.
I would say that it's in the range of what you just mentioned, okay and then are there.
I hear you on the trends in April, but just generally as you look around all of your geographies right. Now are there any that are concerning you are going the wrong way or do you see kind of broadly speaking general momentum across the board.
For the most part we're seeing the momentum across the board. There there are still pockets for example, whenever whenever we see.
News reports about COVID-19 searches for example, and in Michigan, We do tend to see a.
<unk> that would be consistent with those challenges and so that's part of the reason why we're guiding in the way that we are for.
For the year to continue to.
Stick with our current guidance and just be cautious through the second quarter of this year as.
COVID-19 works works through the system right now it makes total sense and then last really quickly on the I've used to work I think you're calling it I understand you're not so you're not are you modeling any revenue for that in the guidance and when when will that be kind of rolled out to the sales force.
Yeah.
We did put a little bit of revenue from torque into our expectations for 2021, but a small amount what we really wanted to do is is to give it time to to grow into those numbers.
And so that's the way we've actually approached it in terms of the launch the launch has been completed in the U S.
So we actually got clearance in February and then the U S launch.
Occurred in April so that product is available to our to our surgeons at this point in time.
Excellent great. Thanks for taking the questions.
Thanks, Bob.
And our next question coming from the line of Kelly problem with choice Securities. Your line is open.
Hi, guys. Thanks for taking our questions and congrats to Laura on your new role and in onshore for joining a great team.
It sounds like you guys had a of course and it sounds like you guys had a great ended the quarter strong performance through April but out of an abundance of caution you're maintaining your guidance first is that is that right and second if trends continue to persist like they have in March and April you know, where do you think that revenue could end up for the full year 2021 is.
It Crazy to think you guys would be growing into the mid <unk> or higher.
It's a it's a great question and as you said tailor what we're doing is we're being conservative given that we're coming out of this period end point in time and and as I said, we also do expect that there may be some lumpiness as well in the.
<unk> of.
The return of the business and so for all of those reasons.
That's how we're approaching.
Our guidance with that said, we are really excited about the long term opportunity for eye views.
With these headwinds eliminated were very excited about bad rock and its continued development in adult deformity and then the new toward product, we're pretty excited about two volt and trauma as well as in primary Si joint fusion. So we have a lot of different.
<unk> opportunities and tailwind that can really catapult us this year I don't want to speculate on what those numbers could look like at this point in time, but but we're excited about the potential and a lot of different areas.
That makes a lot of them, saying Lora and then just to follow up on on torque. It sounds like you guys have about $40 million and sort of potential low hanging fruit to go after and then $350 million and an incremental opportunity. There first is that the right way to think about it and then second do you do you see any reason why that couldn't be you know a five.
The $10 million product in 2022 or are how do you see this thing sort of scaling over the next 12 to 24 months. Thank you for day on a question.
Thanks Kayla.
You are looking at it in the right way the 40 million is the opportunity.
That we have in.
The primary <unk> Si joint fusion market and we are already starting to see some of those converted competitive conversions.
At this point and we just launched the product last month and so forth.
So we're excited there what's equally exciting is seeing some of these trauma cases come in as well given that that's a different call point, we thought that it may have taken a little bit longer for us to actually see more of the potential in the trauma market.
But given the product and the different features of the product. It does seem to be resonating more quickly than we thought in that adjacent market. So excited about bowls and think both presents a great potential for the business now.
Now and into the future.
Thanks, Laura.
Thank you.
Yeah.
Our next question coming from the line of true Veneering with Morgan Stanley. Your line is now open.
Hi, Thanks for taking the questions Tonight.
Laura I know you've talked about the surgeon training being a great tool for driving adoption.
You've talked historically about moving from three cases to four cases, but as you've trained.
Trains some of these surgeons in the near term with those simulator are you seeing any different than any difference in utilization for surgeons that are using the stimulator versus more traditional methods.
Yeah. It's a good question, it's a little early to know the answer to that question drew.
But you know suffice it to say, we're pretty excited about the simulator and the opportunity that it presents we have 24 simulators in the field at this point.
Last year and by the way 21 of those are in the United States and three of them are in Europe.
Last year, we had four simulators in the U S and one in Europe. So we have very significantly increased b.
Potential with the simulators and the ability to train surgeons and given that we have 7500 target surgeons and only 1600 of them have been trained and performed one procedure. It gives us a lot of opportunity to pretty rapidly grow the number of surgeons and <unk>.
Edition R R.
Active surgeon numbers per quarter. It was a little less than 600 again for the first quarter.
And that compares to the <unk> hundreds so theres a thousand that are inactive and we're actually seeing a lot of surgeons, who have been in active being trained with the simulator to so so we're really excited about the potential with the the simulator and thinks that it is going to help us.
To convert.
And newly trained a lot of the surgeons.
With the simulator, the new trauma products.
Also has an application where the simulator also has an application with the new trumbull product or would that be rolled out in the future date.
It actually is going to be rolled out at a future date. So we're in the process of doing some software work with the simulator in order to get to work.
To work with the simulator as well, but expect that shortly.
Got it and then just one last question on the gross margin guidance I think looking at the presentation. It was 85% to 89%.
Just to closer to the high Eighty's this quarter, but just can you help us frame the low and high end does that kind of just all mix driven but I would love to get your thoughts there. Thank you.
Thanks drew.
It is theres really two factors that are at play here and.
One of them is just.
The impact on Asps over time, So I think you know we've said in the past debt, we want to make sure that we're competitive in the marketplace in terms of pricing on average our pricing.
Our core ICU product has been declining 2% to 3%.
Per year, we did see some acceleration of that last year because of them move from.
Outpatient hospital, primarily two more in the ASC setting where there is more.
Hum.
Competitive pricing pressure and so so that's a factor.
And that's the first factor the second one is the product mix that you just mentioned so a bedrock and trauma applications on average are using two implants versus the three that are used in primary and Si joint fusion and so you're getting a.
Rice, there of a little over $6000 for those particular cases versus a little over $9000 for our our core Ips product.
Great. Thanks for taking the questions. Thanks drew.
Yeah.
Yes.
Our next question coming from the line up that took Hollywood JMP Securities. Your line is open.
Hey, good evening.
Congrats on the hires as well.
In terms of the sales force I guess, if we look at sort of the split I'd love to get any color or the CSS people being promoted.
And that's driving some of the adds to the direct sales part I guess your thoughts on sort of the trends in those two areas and.
Are they both are you, adding a bunch or if some of the people getting promoted.
Yeah very good question, so it's a mix of both.
On average I would say that the positions that we filled for the T M roll around 50% of them have come from promotions from the <unk> and the other 50% have been outside hires.
So is this is exactly our strategy, where we obviously have a pretty rapid growth strategy in terms of our sales force and so the idea is that we hire.
More junior reps the CFS is that when they're ready to be promoted in a particular territory is ready to be split if we can we'd like to promote those people if not hire from the outside the other thing to just take into consideration is it's been very important for us to build our sales.
Management structure as well and so we actually promoted a couple of people from T M to regional sales director and actually one of our regional sales director became.
And the assistant Vice President too. So so there's a there's a lot in those numbers David that you are looking at but you are correct that.
A big part of the funnel for the T. M role is coming from the CSF is.
Got it and then as a quick follow up debt.
Slide show from last time.
You did talk about the competitors having something.
In the ballpark of 40 million in sales.
Right.
As we look at that comment you made on this call or are you, saying that the competition.
The other players in this market are primarily doing trauma cases today and Thats, how youre looking at their business.
And I guess.
If that is true.
No that's not the case from David Okay. So let me make sure to clarify there's two different market opportunities with torque. So the first one is actually trauma, which is around $350 million market, it's targeting trauma surgeons and it is getting it pelvic bring fractures bolt high impact.
And low impact.
That's a completely new and adjacent market and that's not a market that the historical Si joint fusion competitors are operating and at least not from the perspective of there there J F products. So so that's that's the larger opportunity.
The second opportunity is the $40 million of sales that our competitors are doing and that's exactly the market that we're talking about right now and that is primary Si joint fusion.
That our competitors are targeting with their particular products and we quite frankly think that we have leapfrogged their products in terms of the capabilities.
And technical aspects of tour and it's going to be.
An opportunity for us to basically get low hanging fruit.
Got it thanks for clearing that up I appreciate it Larry no worries I'm glad you asked.
Our.
Question coming from the line of Brennan Hawken with Cantor Fitzgerald. Your line is open.
Hi, Thanks for taking my questions and congratulations to everyone on the new appointment.
If I missed this but could.
Could you say what percentage of your sales in ASC switch Inc. This quarter.
And maybe how you envision that playing out in the longer term.
Just any sort of impact on gross margin, we should think around that.
That number is always that delta is quite big in between.
Between now and peak thank you.
Yeah. Good question, Brandon and in terms of sales and ASC. They continue to increase and we're getting up close to 20% of our sales now being in the ASC environment and as you may recall.
Just before the pandemic that number was was around 10%. So it's a pretty significant increase in a fairly short period of time.
The way that I've been looking at AFC is simplistically around 50% of our surgeons are employed by hospitals and so I was assuming that that business would remain at hospitals. The other 50% tend to be surgeons, who are in private practice and.
Simplistically, just saying, let's assume we can get half of those working in ASC. So the total ASC opportunity.
Would come out at around 25% of our sales what I'm hearing is that the opportunity may actually be even larger than that so from the perspective that hospitals are pushing more into the ASC business as well and surgeons, who are in private practice really seeing the benefits of ASC. So.
At the end of the day, and we're agnostic as to where the sales actually go we have a great solution for hospital inpatient hospital outpatient as well as afcs.
And so we want to make sure that we're just meeting the needs of our surgeons and their patients in terms of the gross margin. It does have a little bit of an impact on the gross margin just because the ESP in the AFC tend to be a little bit lower.
Once again that 85% to 89% number that we've provided is taking into consideration the impact of that as well as some of the new products that we've put out.
Great. Thank you very much.
Thanks Brandon.
And our next question coming from the line up David Saxon with Needham Your line is open.
Oh, good afternoon, and thanks for taking the questions.
I guess first one yeah, hi, Laura and congrats from a new role thinking first one is just on torque I was wondering if you have any clinical data or if you're planning on something similar to what you've done with bedrock and Sylvia.
And then kind of related to that can you just give an update on <unk> enrollment and when we could expect some to see some data from that.
Yeah, Yeah. Good question. So thus far we have not collected clinical data on ice's torque implants, but we have performed by our mechanical and animal testing.
And it shows a lot of different Ah.
Benefits to the product so from a fixation perspective, one six times stronger than trauma screws.
Around two times greater than <unk> torque versus Si joint fusion competitors.
And that's fixation from a compression perspective.
Just a stronger compression compared to trauma screws based on the testing that we've done and then on the fusion side Theres approximately three times more surface area for bone in growth versus our competitors in trauma screws.
Just designed to allow for more off deal integration versus our competitors in trauma screws. It's a three D printed cancellus volume like surface that facilitates osteo integration and then also has the fenestration a structure that allows for bone.
Through growth and we're seeing that through a sheep study. So so a lot of work that's been done more on the biomechanical and animal testing to help support the product.
Okay.
Sorry could you just give an update on Sylvia as well and then I have one more follow up.
Great. So it's Silvio continues to go well so.
Obviously this is for our bedrock product and showing the benefits of our of our product and our RCT.
And so we continue to see enrollment in Sylvia and expect for that to continue to enroll throughout the year and hope to have results are out.
Shortly thereafter.
Okay. That's helpful and then just with <unk>.
The continued hiring I think you will have about 15.
Higher as planned for the balance of the year and all of these investments that you're making.
Direct to patient marketing programs et cetera.
Should we think about Opex, just the cadence through the balance of the year and thanks, so much for taking the questions.
<unk>.
So you'll get a picture of what we've been trying to do so from a sales hiring perspective, we did grow from I believe it was 64 Tms to 75, just in the first quarter alone. So so pretty rapid growth.
There we can we plan to continue on getting to 90 Tms by the end of the year and 60 clinic.
Clinical support specialists.
We're making significant investments in sales hiring but also in surgeon training, we've been talking quite a bit about torque.
And we will be making additional investments in new products. You also mentioned clinical trials and Sylvia that's an important area and then Theres also the digital and direct to patient marketing from a digital and direct to patient marketing perspective, as I as I mentioned earlier on the call we.
We are putting our toe in the water is the way I would describe it we are doing testing in various markets and we want to make sure that we very clearly understand the ROI on those investments prior to to really pushing in a significant way in that area.
So I would say that the sales hiring surgeon training new products clinical trials, we are pushing very hard on and on the digital and direct to patient.
We are.
Just continuing to evaluate that as the way I would put it so youre going to continue to see growth in our operating expenses throughout the year and those investments are intended to accelerate our growth.
More and more into 2022 and beyond given that a lot of these investments.
Investments that I just mentioned.
It takes around 12 months for them to have a significant impact, but we expect expense growth is going to outpace revenue growth in 2021, and then it will lead to a larger loss this year compared to last year.
Okay very helpful. Thank you. Thanks.
Thanks, David.
Yeah.
And as a reminder, ladies and gentlemen to ask a question you will need to press. The Star then the one key.
Our next question coming from the line of Congress with Canaccord. Your line is open.
Great. Thank you for taking the question and I apologize I've been jumping between calls, but just had a few housekeeping questions on.
On our end.
One I guess could you just help us break out how many docs were specifically trained in the quarter. I think you gave the stimulator numbers I didn't know if there was anything incremental there just given the focus on torque.
But then also.
What the overall account base was in the quarter.
And then lastly, I'll just ask them all upfront.
How we should think about the pricing of torque relative to traditional <unk> and bedrock I know that you've kind of you've talked about.
Year over year price declines just given.
No.
It's more bedrock usage, but help us understand how that dynamic changes with torque as well.
Great Hi, Kyle Thanks for the questions and you are very efficient.
In terms of training, we do not typically provide training numbers.
And so instead, you know what our what our target is to train as many surgeons as possible, but what we would like to speak about is.
The number of active surgeons.
So in the first quarter, we finished with 583 active surgeons, so very similar to where we were at at the end of Q4.
And just as a reminder, it is how many surgeons performed at least one case during the quarter. So we do think that that number was muted by the impact of COVID-19.
But overall, we're continuing to train surgeons and we believe that.
An increase in the number of active surgeons is going to drive the growth.
In 2021 in addition to an increase in additional procedures per surgeon.
In terms of the pricing of torque is actually very similar to the price of Ics three <unk>. So in those cases, where torque is being used for primary Si joint fusion. There are typically three torque implants that are being used and the pricing is in that.
<unk> $9000 range in the case of trauma. There are typically two torque implants that are being used and and so on average you're talking a little over $6000 very similar to our our bedrock applications.
Great. Thank you very much for taking the questions. Thank you.
And I'm showing no further questions at this time I would like to turn the call back over to Laura Francis for any closing remarks.
I just wanted to say thank you to all of you for your time today onshore and I are looking forward to meeting with many of you. This month, we'll be at the bank of America, and the truth to Investor conferences, and we also have a number of individual meetings. So we look forward to meeting you in each of those different places have a great.
Evening.
Yeah.
Ladies and gentlemen that desktop conference for today. Thank you for your participation you may now disconnect.
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