Q1 2021 Option Care Health Inc Earnings Call

Ladies and gentlemen, thank you for holding for the conference your call on option care Health first quarter 2021 earnings conference will begin and just a few moments. Thank you for your patience. Please continue to hold.

[music].

Hello, and welcome to the option care help first quarter of 2021 earnings Conference call. My name is Michelle and that will be the operator for today's conference.

At this time all participants are named listen only mode. Later, we will conduct of question and answer session and during the question and answer session. If you have a question. Please press star and one on your touched on the phone.

I will now turn the call over to Mike Shapiro, Chief Financial Officer, Sir you may begin.

Good morning, and thank you for joining us for the option care of health first quarter earnings call before we begin. Please note that during this call we will make certain and forward looking statements that reflect our current views related to our future financial performance future events and industry and market conditions. These forward looking statements are subject.

Two of risks and uncertainties that could cause actual results to differ materially from our comments.

We encourage you to review the information and the reports we filed with the SEC regarding the specific risks and uncertainties. You should also review the section entitled forward looking statements and this morning's press release during the call. We will use non-GAAP financial measures when talking about the company's performance and financial condition, you can find additional information.

Nation on these non-GAAP measures and this morning's press release posted on the Investor Relations portion of our website.

With that I'll turn the call over to John Radmacher, Chief Executive Officer.

Thanks, Mike and good morning, everyone.

The first quarter was yet another very productive quarter for the option of care health team.

We continued to navigate of challenging environment to ensure the patients and fussing their wellbeing.

Received the exceptional care.

Despite continued hurdles related to the pandemic the option care health team has consistently supported our care partners, referring physicians and most importantly, our patients.

And we haven't turned away one referral due to supply chain are clinical labor disruption.

Also continue to achieve several milestones on the integration front, which at this point primarily consists of technology platform harmonization throughout our pharmacy network and workflow optimization to improve our effectiveness.

Again, we of harvested essentially all synergy related past the opportunities and expect to complete the remaining technology milestones this year.

This is significant is free.

He's up resources to focus on additional opportunities and growth initiatives.

To that and as you saw on this morning's press release, we made one small acquisition recently acquiring certain assets of bio care, our acts of regional provider of panic infusion therapy services.

While limited and the financial impact on our overall enterprise it illustrates our ability to acquire and quickly integrate attractive assets into our scalable platform.

Given our operational and financial capacity, we are spending more time on identifying and evaluating inorganic opportunity.

And while we will be discerning and our efforts we anticipate more activity on this front going forward.

We also launched to new therapies and the quarter.

Adding to our portfolio of more than 50 limited distribution therapy.

Given our focus on neuromuscular condition and more specifically muscular dystrophy, we expanded our collaboration with the threat the therapeutics and launched a modest 45 for patients with a confirmed mutation.

We also launched up Linda which is a therapy for Neuromodulators optica spectrum disorder up listener demonstrates our ability to quickly scale focus clinical protocols for therapies and at more limited patient populations across the country and further broadens our therapy portfolio and neuroma.

Filler space.

Reflecting on the first quarter as I said upfront I'm very proud of the progress and dedication of the option of care health team we've.

We delivered of very strong quarter with respect to the financial results, which gives us a high degree of confidence and the revised full year EBITDA guidance, we communicated this morning, and which we raised and tightened the range.

And at the same time, we keep an eye focused on the future, where we continue to strengthen our platform and lay the groundwork for sustainable growth.

I've never been more optimistic in the future for option care health and I'm very encouraged by a strong start to the year.

With that I'll turn the call over to Mike to review, the financial results and a bit more detail Mike.

Thanks, John and good morning, everyone. The first quarter financial results are quite encouraging and as John mentioned physician as well to deliver strong results for the full year.

Revenue and the first quarter of of $759 million grew seven 6% year over year, driven by low double digit chronic therapy growth and relatively flat acute revenue growth after the impact of ASP declines and certain therapies.

Overall referral patterns of returning to normal and for many of our chronic therapies, we are seeing solid year over year growth, including therapies for Ms Myasthenia gravis and certain chronic inflammatory conditions.

As I mentioned on the queue for call and we are seeing some aspie headwinds and a handful of category, including antibiotics, which impacted us by a little under a full point of growth and the quarter.

That was incorporated into our guidance and we anticipate that impact of sustained for the balance of the year and.

Nonetheless, we are clearly pleased with the overall revenue results for the quarter.

Gross profit represented 21 eight per cent of revenue and grew for 7% year over year.

Gross margin was affected by therapy mix with chronic driving the top line growth and the quarter.

And spending of of $120 million was down and 7% versus prior year and dropped to 15 eight per cent of revenue down from over 18% and the first quarter of 2020.

<unk> note that last year, we were still ramping up efforts to harvest spending synergies. So the improvement reflect our progress and driving SG&A savings post merger as well as spending actions and response to the pandemic.

Adjusted EBITDA $52 $2 million and the quarter represented six 9% of revenue and up 30% year over year and the EBITDA margin of six 9% expanded of 118 basis points over Q1 of 2020.

Again, the spending come from prior year help with the margin expansion, but nonetheless, we continue to drive leveraged growth on our scalable infrastructure.

And as we've consistently communicated the first quarter is typically the soft this quarter of the year in terms of profit margins and dollar generation.

To Echo John's comments, we are investing more time on inorganic opportunities and while limited and size. The <unk> transaction signifies our appetite to become more active on the M&A front, and we will be thoughtful and intentional and our efforts going forward.

And we are confident that we can execute our M&A strategy concurrent to efforts to further improve our leverage profile.

Given our cash flow generation and access to capital.

Finally, and this mornings press release, we have reaffirmed our full year guidance with the exception of our expectation for adjusted EBITDA, which we have raised to a range of 248 million to $260 million for the year.

Collecting the partial year impact of the <unk> acquisition, and our increased confidence after the first quarter.

Consistent with previous years, we will continue to assess and update our full year guidance throughout the year.

And with that we'll open up the call for Q&A operator.

Thank you Sir we will now begin the question and answer session. If you have a question. Please press star one on your Touchtone phone.

If you wish to be removed from the queue you may press, the pound sign or the hash key.

So if youre using your speaker phone and you may need to pick up on your handset first before pressing the numbers once again to ask the question. Please press star one on your phone at this time.

And the first question in the queue comes from David Macdonald. Your line is open. Please proceed.

Good morning, guys.

Couple of quick questions first of all.

And you mentioned referral patterns of approaching pre pandemic levels I know you guys have seen.

A nice expansion of the referral base is that off of a larger number of referrals I guess, one and then secondly, just on the revenue growth for the quarter.

You guys talked about roughly of 1% growth headwind from ASP.

But I was wondering was there also if I remember correctly, some pull forward and the first quarter of 2020.

And.

And as COVID-19 started to hit just any additional detail there.

Yes, David Good morning, it's John.

And the first question on referral pattern again, we continue to see as the marketplaces began to open.

Our teams, we're getting broader access and the patients were beginning to return to see their physician.

And the specialty area that uptick so.

We continue to monitor on a territory by territory basis, we continue to.

Activate our team to get out into the marketplace as many of them are now vaccinated and.

And the market begins to open and we feel good that we're starting to see those referral patterns.

And again continue to increase I will caution that it is market dependent.

And some areas are opening faster than others, and where we see spikes.

There certainly are implications.

From from that perspective, but overall, we feel good that we're starting to see those trends and those volumes moving and the right direction and we invested a lot into our commercial team.

Both in getting the right resources as we went through the realignment and training and education of them and feel like we're in a really good position to capture the increased demand Hay day.

Good morning, it's Mike and good memory on the comments from our call a year ago.

And as I mentioned on our call a couple of months ago wrapping up the fourth quarter of 2020, I mentioned that going forward look the comps for revenue are going to be a little bumpy throughout the year, just given some of the COVID-19 impacts, but youre absolutely right I mean, one of the things we're encouraged by as I mentioned in prepared remarks.

We're encouraged by the Q1 results, including acute volume growth as well as very robust chronic growth, even though at the end of the first quarter of last year, we did see a little bit of a hockey stick with referrals coming in and again remember and the second half of March was really when the hospitals and the <unk>.

Out of the outpatient clinics really started to clear out the sensors. So.

The revenue growth on what was a very very strong finish to the first quarter of 2020.

Is very encouraging from our perspective.

And I guess, just just two other quick ones guys and as we kind of get to the back side hopefully here of COVID-19 and.

Everyone examines what went well and what didn't.

Are you seeing any acceleration in terms of conversations with payers a lot of things like narrow networks and.

Just on.

The incremental conversations debt likely result, and more volume being driven to you guys over time.

We continue to have.

The strong conversations across all of the payer network our market access team continues to take.

Cultivate those we are seeing.

Of that alignment of those network.

The network management, the narrowing of them and deepening of the relationships I think as we've said in the prepared comments.

The performance of the team our ability to quickly respond to the market condition and being a stable and consistent provider has gained us high marks with.

With the referral sources as well as the payer community. So we expect that to continue to move forward. We do expect to see continued now focused on white, citing of care. So site of care initiatives to that may have been a little bit delayed due to some of the the COVID-19 response and the needs there too.

To begin to ramp back up as we get back to the new normal.

Okay, and then and then just one last question just on <unk> just taken a quick peek it looks like.

They are and Houston and just outside of Orlando, a is that correct and then.

Any additional products or is this kind of a nice geographic tuck in.

And access to.

Nice referral strength.

Yeah, I would say, it's probably the latter so yes the southeast.

Beth let's call it that from a geography area I mean, there was a little smattering into other states but.

And really a good strong chronic book.

Focusing in the areas of Iga, but.

Gives us an opportunity to continue to deepen our patient census.

And utilize the platform to its fullest so excited about the opportunity that it creates and and again, it's nice to start flexing the muscles again on the ability to.

Use the.

And the knowledge and the ability of the team to start to think about M&A activity again and the <unk>.

Work behind that on the integration, yes, and the only thing I'd add David I think one of the attractive aspects of this transaction again, while limited in size.

We're taking a team that had limited payer access.

And expanding the breadth of payers, but not only that but as John mentioned, we've recently launched two more neuromuscular limited distribution therapies for.

The emerging patient populations to which the.

And this enterprise didn't have access so it's really putting more products and the bag and.

And and accessing more payers. So we're excited about it okay.

Okay. Thanks very much.

Thanks, Dave.

Thank you and the next question and the queue comes from Matt <unk>. Your line is open. Please proceed.

Hey, good morning, guys, Michael one of the swap on gross margin.

Mentioned on the fourth credit quality, we expect.

That expansion on the year over year basis, and on the first quarter.

And was down a bit.

And year over year, so was there anything.

One time in nature of about the product mix shift or anything going on internally and then are you still expecting year over year expansion and maybe just kind of help US bridge the first quarter for the rest of the year there.

Sure, Matt you bet, Yeah, and again just to.

To clarify we don't give specific guidance on on gross margin. We've said in the past as debt look given the fact that we have two distinct product portfolios with chronic growth consistently outpacing acute we would expect some gross margin headwinds over time.

And that while we expect the mix challenges, we're still very confident and our ability to expand the EBITDA margins really leveraging the spending leverage so.

<unk>.

As we go forward again, when we separated.

And at a 60 40 and chronic acute split right and how we're approaching 70 30, and that's just the transit of property of the portfolios with different growth profiles. So.

And the gross margin came in very very close to kind of how we were modeling it out.

And then you know that we fight for every basis point at the gross margin line.

But really the way we think about it is again how are we growing those gross margin dollars and are we are we leveraging the infrastructure below so.

Overall.

We're not going to make the for not going to take the claim that we're going to maintain or increase gross margin for the year, but again coming back to what we see is the real vital metric, which is the the EBITDA margin expansion.

Okay, and then just a follow up on the referral sources.

You mentioned, obviously at the end of March.

You did quite well in terms of hospitals looking to clear out Texas. Just curious this quarter and then maybe even into April as hospitals have been coming back online.

And how those relationships have gone and what you're seeing in terms of potentially hospitals trying to pull volume back or potentially realizing that.

Working with the provider like option care and maybe it was the right call for that patient population.

Yes, Matt it's John.

I think that what we've seen thus far is as we kind of reported is we're seeing that increase and the referral volume. So so we have not felt a significant amount of pullback of the opportunities back into the hospitals.

As we highlighted and again, a little bit muted because of some of the ASP headwinds.

Are seeing.

Modest growth in acute volumes, which again is good and I think is indicative of the <unk>.

Hospitals, opening up and and starting to get back to more routine aspects of their care delivery and which we certainly participate in and then on the chronic side again, we just continue to see robust.

Gross but we also think that there is continued.

Additional opportunity as we are deepening our relationships either with the payers with site of care initiatives as well as continue to partner with the with hospitals and specialists in and meeting the needs of their patient population. So haven't seen much of a pullback, but look we monitor it and.

And really.

Try to partner and demonstrates the value of the consistent high quality care and that those patients have received throughout the pandemic.

Alright, thank you.

Thank you Matt.

And the next question in the queue comes from Peter Chickering. Your line is open. Please proceed.

On.

This is a key and wrong on for Pete.

Thanks for taking our questions.

And you'd start off here could you just maybe.

And refresh us on what assumptions you have around the acute recovery embedded within guidance and.

Power.

Volumes are calling back the cloud and <unk> changes your view on on that cadence.

Sure sure and it's Mike, Yes look we've been very open around our expectations over the longer term is that the key.

Portfolio, which is a relatively mature portfolio of therapies is really of low single digit volume growth.

The portfolio of therapies I would tell you and the first quarter of the volumes were very consistent with how we think about it and what our expectations are and I think that thats, a reasonable expectation for the balance of the year.

The one thing I would caveat as I mentioned in my prepared remarks the <unk>.

<unk> is definitely the <unk>.

Consistent and also as we had accurately predicted there are some ASP headwinds with a couple of of the generic antibiotics, which.

<unk>.

It had about a 1% impact so.

Little bit of of an increase in volume offset by Asps. So relatively flat reported revenue growth, but again that was very consistent with our expectations.

Okay. Okay. Thank you and and so there's a quick follow up.

And looking at the SG&A leverage this quarter, obviously very strong just as we think about what you are able to generate through the rest of the year were there any COVID-19 type costs or other one offs that you would want to call out.

And that loans.

No I actually think the first quarter spending is a relatively clean metric again last year and the comp we are a little bit of an easy comp because we were still in in SG&A synergy harvest mode, and so and obviously going into the second quarter like every other enterprise, we tightened the belt on things.

Like travel and other controllable given the uncertainty of the COVID-19 situation. We've learned a lot during the pandemic challenges around opportunities to drive additional efficiencies and as we've talked about when you look at our SG&A base, it's roughly 80% fixed and so.

Our confidence and continuing to drive SG&A leverage going forward off of what the relatively clean and Q1 metric is very very high.

Thanks, guys.

Thanks, Karen.

And the next question and the queue comes from Brooks O'neil Your line is open.

Good morning, guys, you talked a little bit about the bio cure acquisition could you just give us a little more color.

In terms of the type of focus for your M&A activities in terms of additional geographic expansion capability set and maybe a little bit more on.

And the size of the kind of targets you see out there and the marketplace now.

Yes Brooks.

John.

<unk>.

I think as we've outlined before I'll start with saying look we're going to be very discerning and disciplined.

And our approach.

And when you look at our current.

Reach given our footprint and the fact that we can cover 96% of the U S population and it gives us the ability to be very thoughtful and the way that we're looking at those opportunities. We also with the technology platform that we have really have a scalable model that we know we can put more.

More volume across those rail to continue to drive real value.

Squeezing out the.

The synergies, but also with the cost efficiencies that comes with that.

And based on our fixed versus variable cost structure. So.

We're going to continue to.

Look there is certainly are in kind of tuck ins that we'll look for that may bring us.

Patient populations.

And census.

And for the chronic side there are capabilities that will continue to take a look for and where we have capacity if we can.

And do a transaction that would help to drive that operating efficiency. We will continue to look there. So.

I think we're we are committed to our focus around deleveraging, we're focused around our ability to leverage the infrastructure and we think that there will be plenty of opportunities for us to go through.

To look for.

And the ability to achieve those goals too.

To serve more patients to drive more value and to really.

Maximize the the infrastructure that we have today.

Brooks, it's Mike the only thing I would add is look as you know and as we've talked about we're not looking for additional ZIP code with our national coverage, but I think <unk> is a good example of where you can take a successful commercial engine that admittedly was was frightened of above their weight class without the commercial therapy commercial.

Payer relationships and without a broad basket of neuromuscular therapies, and so taking that successful commercial engine throwing it and with what was already a very effective commercial.

Annick.

Field team at option care and it really is a one plus one equals three.

Great.

Guys called out the opening of the care Management Center in Chicago is that of one off the investment or do you expect to.

Open more such centers around the U S.

To do that it just allows us to reevaluate our needs and the market means and.

And make those investments, but look what we're going to live within the guidelines that we put out our around the way that we're going to be deploying cash.

And this fits within that investment thesis of deploying of Capex and and we're really excited about the capability such that it brings for not only the the the region here, but also as one of the national centres of that one.

Great and just one more with the change of the administration.

And kind of of the new environment do you see any changes at all either go administratively or from from a legal or regulatory perspective, and the opportunity to get for.

Full and fair reimbursement from your friends and C. M S for Medicare patients.

You know and Brooks look we're always we're always working hard on that I mean, it's a little bit early the town, we're waiting to see some of the appointments get get made into some of those key positions, but we're working right now both independently and with the National home Infusion Association.

<unk>.

To continue to move that agenda for word we're looking to reintroduce uhm some legislation into the.

The upcoming.

What are the calling family infrastructure, bill or or the way that are looking at that standpoint, and so look we've had bipartisan support we believe we're on the right side of the cost quality equation, and we're going to continue to fight vigorously or communicate vigorously and and yell from every mountaintop possible.

To get fair reimbursement on that so look for cautiously optimistic certainly.

<unk>.

Health care is a is a big part of at least what the administration has talked about is the safety net on both for Medicare beneficiaries as well as looking for and expansion of Obama care.

Within within that approach and we think we have a real solution that can help drive better outcomes at a lower cost and we're going to continue to.

Articulate that clearly and effectively until we we get better reimbursement rates.

Absolutely. Thanks, a lot for taking all the questions.

Yeah, Thanks for us.

And the next question the cute comes from Kevin Fishback. Your line is open. Please proceed.

And that'll give quarterly guidance, but I think we had a little bit more of a level of year, then maybe folks for thinking about it.

Externally, but the way we think about it is we outlined a range of about 60 days ago. We've tightened we've added a couple million dollars for the impact of bio cure for the the partial year and again I think we'll continue to tightened throughout the year.

But the first quarter for us, which again as I mentioned is typically the latest in terms of dollar generation came in at or slightly ahead of of where we were expecting the first quarter to come in so very very good wind.

And and our sales going into the into the back half.

And again, we will continue to assess that throughout the year and I think as as we tried to articulate right. After the merger John and my intention is to maintain the the teams credibility by putting numbers out that we have a very very high degree of confidence and and and if anything that gives us confidence.

Within the range that we've we've articulated this morning.

Okay and fair enough.

And not to update the dead horse on the deal but.

It kind of seemed like following the story for since you guys on public.

You were kind of talking down.

The the opportunity of acquiring existing exclusion sweet.

Overlap with your Geography's, because you mentioned not wanting to acquire assets just of closed down the facilities and and I guess on board the patients, but I guess, it's a good.

It's quickly accretive but is that and does that mean that.

And that mines <unk> and that's now something that you are focused on our our mind misinterpreting how you previously communicated it.

No I think it's a very good question and good pushback, Adam I think it's very consistent with how we thought about it look we're not looking just the AD bricks and mortar to roll up local folks and it's not for a lack of books that hit our inbox for opportunities one of the things again that really was intriguing about this one was as we really peeled back the.

And the effectiveness of their commercial engine again, they were a nimble small group, which had highly effective.

Referral relationships, primarily in the narrow space, but admittedly they were again fighting above their weight class without those commercial payer relationships and without the broader therapy portfolio of things like and mass.

And.

Nmom's day, where we've really broad and and created and extremely unique portfolio of neuromuscular therapy and so this was what I would consider a unique opportunity where we could quickly integrate highly effective commercial resources and again.

Have them complement our existing.

<unk> and the field so.

Again I think.

It's very consistent for every deal like this one that we say, yes, we we respectfully pass on ones, where again and the first question the John and I and the team always ask is what's unique or special about this asset and is it both economic and strategic and our long term for students.

Alright that makes sense, that's all for me. Thanks.

Thanks and.

Thank you. The next question the cute comes from Mike Kotecki. Your line is open. Please proceed.

Hey, Good morning, guys, Hey, I may I may of missed that you may have said what was the capex for the quarter.

Capex was just a little over $3 million and we get the exact number for Ya.

$331 million.

And the disclosures this morning, okay.

Have you all and and.

Again this may of been something I, Miss but have you did you all change either your cash flow from ops guidance for Ya.

And guidance for the full of the year and light and the fact that you're moving up.

<unk> guidance.

No we've maintained our cash flow guidance.

Which we've said our guidance was at least $140 million of cash flow for months I would I would reiterate the at least and.

And it's early and the year. We've also as you've seen and we've also made some strategic inventory investments to make sure for some.

Some more tenuous supply chain situations, we have the confidence of of levels, but nonetheless, we feel very confident and the cash flow generation, especially going into the the second second quarter.

Okay, and and Capex still around 30.

Correct, yes, yeah, a little bit of slow to start to the year. That's typically the case.

But we would expect some of the the key project to heat up going into the second quarter.

Okay, and then on on the cute revenue and the in the quarter what what's the.

I know you said relatively flat.

I couldn't quite was it down slightly what what was the actual.

Revenue pomp and cute.

Yeah. So so acute revenue is effectively flat year over year relative to the first quarter of last year and again, just unpacking it and again walk in the fine line might because we don't report and separate segments.

The volumes were actually favorable the prior year, we just and a little bit of NASP headwind, which we had anticipated going into the year and that we highlighted on the fourth quarter call. Okay. So when I hear of relative relatively I mean, plus or minus one per cent of something like that yeah.

And you got it alright, thanks, guys appreciate it.

Thanks, Mike Thanks, Mike.

And I do have one more question to keep from Jamie price. Your line is open and they begin.

A dynamite good morning, and helping you booked and while I'm on a call go to the supply chain unique and comments about Bob and how 'bout cents.

But on the solid for you guys. The accepted all patients and the quarter and what have you seen with your suppliers now the stink disruption and when they get the idea and reduced and and related cat potentially inventories stepped up $15 million of in the corner and you built inventory to kind of the day Mr.

Help from model with model and related.

Yeah, No. It's a great question, Jamie look we've been very open around the fact of our keeping strong surveillance over the I G.

Therapy category, given the fact that plasma collection still continue to to <unk>.

Trend below pre COVID-19 levels.

Obviously human plasma is the key raw material for for both sub queue and intravenous.

Again, as John mentioned and prepared remarks, we haven't turned away one referral and I think given given our unique position, where we source all of our AG therapies direct from manufacturers that gives us and advantageous supply chain position.

Our inventories up for one reason and that's because we are consciously maintaining more strategic levels were relentless around working capital efficiency and given the health of our working capital of that gives us the ability to scale up.

And times like this so I would say.

Cautiously optimistic and and we were able to grow on enterprise and the quarter.

You can only expand your patient census, if you have the confidence and supply to serve your existing patients, which again most of these folks are on for on it very extended period of time.

And again I think while the broader market continues to be.

One that a lot of folks are keeping an eye on where increasingly confident going into the second quarter and our ability to to to support that therapy class. So very comfortable and again I would expect inventory.

Two two level of decline from here.

As we watch it on a weekly basis on of therapy by therapy basis.

Okay I'll take all of it.

Just the mall pipeline on it.

And thank you lots of seating products and the quarter first can you just comment on the hobbles contribute to the year in terms of the revenue and I need the top gross maybe at the store.

Coca Cola you drug Lodge for you, how how quickly that bands and then more broadly talk about the opportunities you see from the from new products and and.

And 2021 and 2022.

Yeah, and thanks for the question and and this is an area. We love to the focused on look we of a team that is better than anybody of collaborating with biopharmaceutical manufacturers and our track record of quickly and consistently launching with with the clinical protocols coast to coast.

Is is second to none.

One of the things that we love about these therapies. So wrapped has been Ah and exceptional partner and we've been and the foxholes with them since they launched eggs on to switch was there first muscular dystrophy therapy no surprise, we're on a very limited distribution with them for the third and Dnb.

Therapy, the value to the to US is really building out that portfolio. There is truly nobody that has the limited distribution therapy portfolio of that we have and especially when we think about neuromuscular of space. So like Mos's day. This is eight and emerging therapy, where frankly, there were no therapies three four years ago now there are.

A couple of both of which are within our limited distribution network, which means when we approach neuromuscular.

Practices.

Whether it's and mass muscular dystrophy, Alice auto immune conditions, and Mos's D, where the only one that can provide them with that broader therapy from of financial impact Jamie. These out of the gate. These are complimentary, they're not going to move the needle year, one out of the gate, but over time.

A lot of drops and the bucket the bucket starts to Phil and that's what really gets us excited and I can tell you that our conversations with bio farm.

Continued to be very very robust.

Okay, and then just on the market and I was wondering if you could give us a sense for how you think you guys day to day in the corner of our.

Even the.

A longer period of time last 12 months, something like that versus the market just to get a sense of how much market share you guys think you're taking on any color on how sustainable battles.

Yeah, Jamie and it's gone.

I guess, we continue should try to get.

Listening posted and the marketplace around and what's the growth and then.

As we've talked about before the little bit hard for this industry to have clear line of sight, but our estimate fill are in alignment that we think that home infusion.

Continued on the patient of let's say the six to seven.

Percent range.

So therefore, we believe we took share based on the quarterly results and and we've worked really hard our team from the commercial standpoint.

Has has been really focused around reach and frequency I think we've highlighted before the work that we've been doing on segmentation and targeting.

Are disciplined approach to that based on the information that we get from third party allows our teams to be very efficient on that of identifying where demand is in the marketplace and making certain that we can.

Capture up more than our fair share of that demand. So look we're we've got we're always going to be working harder and we think that there's always opportunity to continue to improve.

And we're looking at the efficiency and effectiveness of of of our of our team, but we feel as if that momentum is building and I think we are expectations are that we would be leaving the market.

From of growth standpoint, as we look forward based on the investment that we have as well as the reach and frequency of our our commercial day.

Okay, Great. One last one for me if I could just going back to the the decline that you saw and the quarter first thing was the sixth of that date or a supply and how much impact on on gross margin and then if you could just talk about your exposure T T.

And.

Generics.

Branded going to generic.

I know that's a very regular part of your business and you have to.

And the other day, but any color on.

The what floor and the pipeline for the C N N.

Hey, Jamie it's Mike Yeah, we we were not surprised by this one look I mean, we we billed thousands of ASB he's on a daily basis.

And we have teams that watch so we anticipated that there was going to be a bit of of headwind from NASP. This year. We were we were open about it and again asp's very.

We don't typically call the amount of them if they have a notable impact so.

While it had an impact on the top line again, we don't describe it as of perfect hedge, but there's a high correlation between ASCII moves and our procurement cost and so there is a more muted impact on the gross margin line and then on the top line, which again, we incorporated and we were able to continue to post very robust earnings.

Growth despite that and.

And we will continue to watch that.

Overall on the acute side, there's not a lot of additional.

Generic events that we would anticipate again that portfolio of for the most part of our generic today on the chronic sideboard constantly watching biosimilar emergence, which are not truly of a generic event, but anytime you have a more competitive class with with Biosimilars.

That typically is where we can really add more value of around formulary and preferred therapy per.

Preference by payers and where we can offer a broader range so modestly.

Helpful from of financial results of perspective, when we see the emergence of Biosimilars.

Alright, thanks for all of the detail.

Great.

Thanks, Jamie.

And we have no further questions. Sir do you have any final remarks.

Yeah, Thanks for Michelle look and closing.

Very pleased with the strong start to the first quarter of the year and we look forward to the continued momentum as we look forward. We will continue to keep you apprised with the progress that we're making and again as an organization I couldn't be more thrilled with the the way. Our team has responded to every challenge that has come our way.

And more importantly, our ability to to really capitalize on what we think is a positive shift and the market of utilizing the home is the center of care. So with that thank you for joining US. This morning stay safe and we look forward to talking to you soon and take care of.

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Thank you, ladies and gentlemen, and this will conclude today's teleconference. Thank you for participating you may now disconnect.