Q2 2021 Establishment Labs Holdings Inc Earnings Call
[music].
Good morning, and welcome to establishment Labs second quarter, 2021earnings call.
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During the conference. Please press Star zero on your telephone keypad.
I remind.
Today's call is being recorded.
I will now turn the call over to Raj <unk>.
Head of strategy and Investor Relations. Please go ahead.
Thank you operator, and thank you everyone for joining us with me today on 1 who's a chicken and curious our chief Executive Officer, and Renee Gaeta Chief Financial Officer following their prepared remarks.
Reminder, questions.
Before we begin I would like to remind you the comments made by management. During this call will include forward looking statements and then.
And federal Securities Laws. These include statements on establishment labs financial outlook, and the company's plans and timing for product development and sales.
These forward looking statements are based on management's current expectations and involve risks and uncertainties.
For discussion on the principal risk factors and uncertainties that may affect our performance or cause actual results to differ materially from these statements I encourage you to review our most recent quarterly report on form 10-Q, and other SEC filings, which are available on our website at establishment labs Dot com.
As a reminder, establishment labs received an investigational device exemption from the FDA for Motiva implants.
Plants and is undergoing and clinical trial to support regulatory approval and the United States, we continually seek to expand the geographies in which our products are regulatory approved please check with your local authority for specific product availability.
The content of this conference call contains time sensitive information and accurate only as of the date of this live broadcast July 29.2020.
Except as required by law established and labs undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances. After the date of this call.
That is my pleasure to turn the call over to our CEO Juan Jose.
Thank you Raj and good morning, everyone.
I hope everyone is healthy and continues to remain safe.
And I'm pleased once again to be able to report a record quarter with 2021 second quarter revenue totaling $32 million.
Second quarter revenue increased 205% over the second quarter of 2020 and was up 5% sequentially from the first quarter of this year.
Continued strong sales results show that our singular focus on women's health innovation based on science and the track record of over 10 years of excellent clinical and aesthetic outcomes with Motiva implants can drive significant share gains at.
It is not by accident that we remain on track to achieve.
Cheap the dominant share position and our industry and as our story continues to resonate with surgeons and most importantly, with women and we expect to continue to post strong results.
The strong momentum and our business, we are raising full year guidance for 2021 to a range of 122 to 100.
$6 million.
This is an upward revision from the previous guidance of $118 million to $122 million, we provided with our first quarter results.
This updated outlook represents growth of 44% to 49% over 2020.
This updated guide.
<unk> captures a contingent momentum, including strong underlying market demand and are capturing a share and geographies around the world. While the pandemic continues to create some unusual quarter to quarter volatility and more pronounced seasonality is a consideration and over the near term and our business. We are confident there on market share gains.
We'll continue as countries open up things to vaccination campaigns, all over the world as always and especially with the impact of Covid and we will continue to take a conservative approach to guidance.
And they will provide additional detail on our second quarter performance and updated outlook and a moment.
Before I turn the call over to her and I would like to highlight several recent events and provide an update on the key initiatives.
On June 21, and paper titled to surface topography of silicone breast implant mediates to foreign body response in mice rabbits, and humans was published in nature.
<unk> Biomedical engineering. This paper was authored by a group of researchers at M. I T.
And focus on determining the optimal breast implant surface that is most biocompatible and that induces the least amount of inflammatory response to.
Researchers were led by Professor Robert Langer, 1 of 12 Institute.
<unk> professors at M I T and among the most published sighted and decorated engineers and history.
He is our scientific co founder of Madera now and on top of that he has been cited over 326000 times and as an author on more than 1500 published articles.
It was joined on the paper by a distinguished panel of researchers from M. I T. M. D. Anderson Johns Hopkins Rice University, Baylor College of Medicine, the University of Manchester and the medical University of Ainsworth.
The study showed that the patented motiva smooth silk surface significantly reduces or foreign.
And body response compared to implants with higher degrees of roughness or completely smooth surfaces.
The researchers looked at the tissue capsules formed as well as the expression of immune and inflammatory markers and both animal models and human tissue samples to smooth silk surface was consistently shown to be and the sweet spot.
And of inducing a healthy capsule, but also limiting the amount of inflammation as per.
Professor Langer said about the study to smooth silk surface with superior and minimizing inflammation and excessive foreign body response.
He went on to say that determining and optimal surface is a significant step for the medical device community.
[noise] towards designing safer and more biocompatible implants, which can reduce patient complications the.
And the importance of this paper is hard to overstate nature Biomedical engineering is a well recognized and respected journal in its field and the nature journals are among the most demanding in terms of the review process define.
And the finding.
<unk> is paper and more links to a change it spans from the inception of our Motiva implants over a decade ago and the technology, we purposely design and to them to the consistently positive real world outcomes seen by surgeons and patients who use them.
It is not by accident that our implants consistently show.
And excellent outcomes and the work by Doctor language team and others are adding to a body of evidence that is increasingly hard to ignore.
The rigorous science and clinical data behind Motiva sets us apart from the competition and their strong sales results show that this message is resonating more and more.
Things are diligence and with women all over and a world.
On Motiva EMEA, our minimally invasive breast enhancement procedure, we announced on April 27th the completion of our 100 patient Motiva Mia IRB approved study and Costa Rica, we continued to perform cases that reaffirm our belief that this.
With Soc will transform breast aesthetics.
As a reminder, motiva Mia has the potential to make breast enhancement appealing to many women, who previously had not considered breast aesthetics and the positive feedback from surgeons from different regions, who have used the technology supports our view that EMEA will expand our total.
Addressable market as a reminder, our initial estimate on the global total addressable market for me here is $1.9 million procedures per year, which is larger than the current total market.
Regulatory clearance in Europe for the tools that are part of the Motiva Mia system remains on track and should allow for a planned launch.
Launched in 2022.
Motiva, Florida, our novel tissue Expander has begun limited commercial sales with.
With a first of its kind non magnetic port flora allows for MRI imaging during the time and expander is used after mastectomy.
Laura has the potential to also improve clinical outcomes.
Changing the way women are treated for their cancer by being on magnetic flora opens up a new paradigm for radiation oncology planning and we have several projects and studies underway to help define how floor I can improve cancer treatment. During this critical stage and a woman's journey to recovery.
Florida.
Bi is 1 part of our long term strategy to make breast reconstruction and not only safer, but also to create a new standard of what we call aesthetic breast recon with the goal to provide similar outcomes for breast reconstruction and aesthetic patients the clinical benefits that come from offering better alternatives is an important part of a woman's health mission.
And many countries around the world less and 10% of women have breast reconstruction after a mastectomy and there is a real opportunity to move this number meaningfully higher.
Our ergonomics 2 rollout continues and several select geographies <unk> 2 platform builds upon our flagship ergonomics.
And and offers enhanced mechanical properties advanced chemistry, and improve their economics, all of which we believe will result in even greater patient satisfaction and justify a price premium.
Our clinical and commercial efforts and China are ongoing and we continue to make progress and the regulatory.
Process, our plan is to launch mattila and this market and 2022.
Our regulatory timelines for U S approval also remain unchanged and August of this year the aesthetic cohort will pass it to year, Mark we continue to enroll patients and the remaining reconstruction cohort of the trial and as a reminder, we have fully completed the revision.
Immix and brush and cohort.
Lastly, I want to highlight several recent additions to the team at establishment labs in May we announced that <unk> joined as head of global operations. He's also overseeing our digital transformation initiatives.
<unk> experience in transforming and scaling business processes.
And because at such companies as Servicemaster sales force Amazon HP and others will be invaluable as we continue to expand our revenue base.
In June we announced that <unk> joined as our general Counsel and corporate Secretary. She came to us from Zimmer Biomet and I can tell you that her.
Her contributions and insights have already been significant and the short time she has been here.
We also announced in June the hire of Heather Brennan as our head of U S. Commercial operations. She joins us from MTF, where she worked for the past 13 years. Most recently as a general manager of their plastic and reconstructive surgery Division.
And Heather is very well respected in our industry and among the plastic surgeon community. She is already deep into planning our strategy as we prepare to enter the U S market.
Of course, as we announced earlier this month. This is Renee Guy at his last earnings call with establishment labs, she is leaving us to pursue another opportunity.
Both are to her home and California.
We have appointed rashly on Hawaii, our current head of strategy and Investor Relations as interim CFO.
Raj joined US in February from Jefferies, and his background and experience make him a natural choice to support our continued growth.
He has a deep understanding of our business and <unk>.
Unit equal passion to transform our industry by focusing on women's health and wellness.
And I have enjoyed working with him the past few months.
And appreciate him taking on this important role and our company.
I will now turn the call over to Renee to cover our financial results.
Thank you Juan Jose.
Shares and market momentum in our business carried into the second quarter, we saw strong growth again and sales to a new record level and our operating expenses and cash are being managed effectively.
Total revenue for the quarter was $32 million.
Direct sales were approximately 44% of this total while distributor.
Sales, which can fluctuate based on changes and inventory levels and the timing of Reorders made up the balance.
From a regional perspective sales and Europe comprised approximately 45% of global sales Asia Pacific and Middle East was 30% and Latin America made up the balance per.
Brazil, which is our largest single market.
Globally accounted for 7.7 percentage of total quarterly sales.
Our reported gross profit for the second quarter was 21, and a half million dollars or 67, 1 percentage of revenue compared to $7.2 million or <unk> $69..1 per cent of revenue for the same period and 2020.
<unk> change and gross margin was the result of regional mix returning to more normalized levels as well as increased production volumes. Our gross profit this quarter improved from 66, 2% reported and the first quarter of 2021.
Average selling prices.
And the second quarter were up slightly from the first quarter of 2021.
As we have seen and the last several quarters, there will be fluctuations and gross margin. We continue to believe that the best way to gauge our progress on this is on an aggregate basis over time and.
And we are comfortable with gross margins and the mid 60%.
<unk> range over the near term.
SG&A expense for the second quarter increased approximately $7.3 million.
To $21.8 million compared to $14.4 million and the second quarter of 2020.
The increase in SG&A and the second quarter results.
Central and normalization of business practices following the significant disruption from the global pandemic and the year ago period.
Our R&D expense for the second quarter increased approximately $2 million from the same period in the year ago to $4.3 million R&D.
R&D expense also returned to more nor.
<unk> levels, this quarter and will fluctuate quarter to quarter based on the timing of clinical trial and other expenses.
Total operating expenses for the second quarter were $26.1 million and increase of $9.3 million from the year ago period.
The increase this period was again due to primarily.
Really to the normalization of spending relative to a year ago.
Net loss from operations for the second quarter was $5.3 million compared to net loss of $10.5 million and the year ago period.
Our cash position remained strong at $76.8 million as of June 30th.
Compared to $84.5 million on December 31st our net cash burn this quarter was only 1 point and $1 million.
As Juan Jose noted earlier, we are raising our annual sales guidance for 2020, 1 to a range of $122 million to $126 million from the previous.
This range of $118 million to $122 million, the new range represents annual growth of 44% to 49%.
And refining our outlook, we took several factors into consideration there is considerable momentum and our business and we are taking share globally.
Back to this will continue however, the third quarter could see more pronounced seasonality this year as surgeons and P.
And looking for the last year.
In general and especially during the current pandemic, we feel and it's best to be conservative and our outlook.
As we look down the rest of the P&L, we continue to expect to see spending levels increase as we prioritize investments and a significant number of development and commercialization programs we have underway.
Pairing for entry into new markets, and and advancing our product pipeline with new technologies to drive future growth remains a top.
We have already.
However, while operating expenses tied to these initiatives will increase we expect the efficiency programs, we implemented over the past year will become more permanent part of our business practices the increased efficiency as well as our strong revenue growth should result, and our cash use continuing.
Prior to trend down from pre pandemic levels.
Even as we increased strategic investments.
Overall, we believe our company isn't and a very strong competitive and financial position.
Before I turn the call back over to Juan Jose for concluding remarks, I'd like to say that my recent decision to leave establishment.
<unk>.
It was a difficult 1 as seen in our results. The company has and a very good financial shape and our outlook remains very bright and I firmly believe establishment labs will succeed and its mission to transform the lives of women around the world.
However, as with many people coming out of the pandemic I simply decided.
And to make a change and to accept a position and closer to my home.
My time here has been great and I want to thank Juan Jose and the board for the opportunity to be a part of this amazing story over the past 4 years.
Thank you Renee.
The record revenue, we generated and the second quarter and recent developments and our industry.
Show again that <unk> isn't the right path to be the leading company in breast aesthetics and reconstruction and we are preparing for the next chapter and this growth story fueled by our commitment to women's health.
During the second quarter, we announced a groundbreaking on their new Suhler Young innovation Center and Costa Rica.
This new facility.
He will house expanded research and development labs, and new state of the Art Media Center and World Class surgeon education and training facilities.
The facility will also more than double our manufacturing capacity to over $1.9 million implants, a year, which is enough to satisfy more than half the current world market.
I'm pleased tools announced that after his previously announced leave Salvador data returned earlier this month into the position of head of special projects. The first of which will be to oversee the construction and validation of the new facility.
I want to close by again thanking our outgoing CFO renege Iota.
And there has been with us through our IPO and through a time of significant expansion of our company.
But more than that she also is a good friend to me and everyone. At establishment Labs, you will be missed Renee and we wish you well as you embark on the next chapter of your life.
I will now turn the call over to the operator for.
For your questions.
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1 moment, please while we poll for questions.
Our first question today is from Matt Taylor of UBS. Please proceed with your question.
Hi, good morning, and.
Thanks for taking the question.
I wanted to just ask 1 on on market dynamics.
And you had a nice quarter you're in so many countries and I was wondering if you could just give us some more color on on how things are doing and some of those different geographies, maybe you could characterize you know.
Some of the ones that are still.
And from the seeing some pockets of.
Disruption and how that could improve through the year and then.
And also would love some color on whether you think youre gaining share.
Yes, Thank you Matt and good.
Good morning.
All right.
And you see good recovery and.
Q2, and we do believe we are taking market share globally. We saw we saw good growth taking place in Europe and Asia Pacific.
Latin America was down sequentially, but it will not surprise to Brazil, usually has a very strong first quarter and then second.
Sooner is down usually from that and there was some small impact from FX, but.
Overall, we're super happy about this quarter. It shows that there is momentum to the business, we understand what's going on globally with regards to the pandemic and some of the challenges that it closes but we continue.
Second quarter perform well and we're very happy with that.
And the team is is is doing all around the world.
Okay.
Okay great.
And then you talked about some more pronounced seasonality.
And you just talked about.
Any color that you have on the cadence that we should expect for Q3 versus.
Continued before and thats going to be different than we would see normally.
Yes.
And we've always talked about statics.
Being a business and which you do have seasonality and the third quarter and.
That is in normal conditions, the past couple of years.
And our rate of growth. The addition of new geographies and.
And the pandemic it has been hard to compare but normally you would see seasonality and and Q3 and our guidance contemplates debt debt scenario.
45% approximately.
<unk> of our business comes from Europe.
And are.
These doctors and their patients are going to take a vacation to share for sure. So that's our that's part of that but.
That is normal and our business. So we don't see it as a negative we see it is actually a reflection that things are getting to.
And between normalized condition and European market.
Furthermore, I think.
We are you are seeing the effects of all the work that we've been doing over the last few years with regards to our science and innovation, we're launching new products as we speak into new lines like breast reconstruction continues.
More and to work with.
With me.
So you know, we're nothing but super excited about the second half of this year.
Yeah.
Yeah, Okay, and then maybe just 1 last 1 on EMEA a lot of investors are excited about that could you just give us more details and updated thoughts about how that initial launch.
And good progress and when we should start to expect.
A ramp and the CE mark countries from GAAP product.
Yes of course, and we are continuing to prepare very carefully for 4 just launch we want to make sure and we have said this in the past that we do things correctly. This is and.
Clearly new category within breast aesthetics.
We have.
Slide for the CE Mark for the tools that are necessary for Motiva EMEA and that is the motiva injector and the balloon that are necessary for that minimally invasive approach. So we expect approvals.
<unk> for that to take place before the end of the year. So we can begin our educational activities in Europe and.
And after that then you know and.
In 2022, what you'll see is working through.
A list of send.
Centers in which we think we will be able to show how we can attract new patients.
And that would normally and not go for these type of breast augmentation procedures and and that is.
And the most interesting part about about me as not only the fact that it's a price premium over normal breast augmentation, but the fact that you are bringing new patients. So our launch is going.
And directed specifically at showing that we can get different a different group of patients interested in breast aesthetics.
Great. Thanks, a lot for the thoughts and thanks for taking my questions.
Thank you.
The next question is from Josh Jennings of Cowen and company.
<unk> proceed with your question.
Hi, good morning, Thanks, and thanks for taking the questions and congratulations on the first half of.
For the year.
And the recovery.
Hoping Juan Jose to just get a sense of how impactful you think.
The recent Langer publication.
Company, Biocompatibility, Motiva and the earlier and your share report.
And how impactful they have been to your.
Direct and distributor sales efforts and in terms of driving.
Inversion of of new surgeon customers and how long do you think that the tail is from those 2 reports and then.
My follow up quick second question would just be I mean, historically you have transitioned from.
Some markets from from distributors over to the direct sales effort and.
And are there any territories, where should we be expecting more movement.
In.
The next 12 months to 24 months.
Thanks for taking the questions.
Thank you Josh.
Guarding the Langer paper.
It is the strongest possible objective scientific evidence why our implants performed better and we're very glad that this took place and <unk>.
Especially in the paper.
So like nature and.
It does.
Confirm once again everything that we've seen in in the market with over 10 years, and now $1.6 million implants out there over the last.
A few years and and and to US. It is it is.
Once again, a confirmation, but there are skeptical surgeons out there and we can't wait for the conditions of the pandemic to improve so that we can go and engage with them directly.
And same thing with share sheer just happened very recently.
It has an impact.
Or like it is the first scientific committee worldwide debt.
Creates and direct causal relationship between textured breast implants and <unk>.
This man made cancer KOL day, LCL, so to us it is do.
Do you see things will be part of our.
Because the strategy to capture new market share, but it's too early.
And we think that over the next few years, we're going to gain market share from all the things that we're doing including this strongest approved with the language paper and definitely with the results of the share Committee.
So when you think about our growth it comes from so many different places.
Safety over time is 1 of those and these 2 things definitely confirm that.
But.
We are going to continue growing with the new initiatives like minimally invasive and breast reconstruction.
Sure.
So at this time, we're not really looking at moving any markets from distributor to.
On to direct nor do we think we need to do so.
Great. Thanks for those updates.
The next question.
And is from Chris Cooley of Stephens. Please proceed with your question.
Good morning, and thank you for taking the questions and congratulations on the record quarter and it's very impressive.
Just just 2 for me if I may 1st Juan Jose if you could speak to us a little bit about as you approach the European market with flora and Orange.
<unk> and more specifically the reconstructive market in Europe on the floor what day.
And you need to do tactically thats different versus your approach the company who has taken on.
On the oxide and just curious to hear a little bit about the incremental investment and might be required.
And if there's additional data just just.
Help us think a little bit about that ramp and what it entails.
And then secondly for my follow up I'm, just curious if you could comment as well just from a macro perspective.
Clearly, we're seeing a rebound here and interest and breast aesthetics are coming out of the COVID-19 pandemic.
Surgeons.
We're extremely busy right now I'm curious how much of this you think is a bit of pent up demand and we look at the growth rates and the broader market right now relative to just a step function improvement.
And just the overall interest and the procedure I'm, just trying to kind of tease out.
And what you think is.
We'll as we go into 2020.2 if we have a step up and your organic growth rates that we've seen historically.
And if you see some type of per version and the second half of next year. Thank you.
Yeah.
Chris and I'm you know.
And just due to answer both of those questions and I'll start with Florida.
We are.
So happy that we can finally.
On become a.
A key player and the category of breast reconstruction and the reason we took so long to enter that category is because we wanted to do so in a way that we can transform.
You know the state of the art and breast recon and we are doing so with Florida, Florida has so many different features that are going.
Going to make a difference in breast reconstruction.
So of course, you know the non magnetic nature of this device that is the fact that as RFID enabled.
The probes.
Prior Cherry surface that creates you know health care capsule, which is a huge thing and breast reconstruction remember that up to half of you know of the women that received a tissue expander, we will have a.
Capsular contracture so this.
This is important and beyond that the possibilities with radiation oncology and the things that we can improve there. So there are so many things that we can do now the good thing is we always took a scientific approach to breast aesthetics. So this is not new to us we have a very strong team.
And clinical and Med affairs.
And our sales force is used to handling scientific messaging also we have on <unk> edge medical education platform and we've been using that already during your early experience part of all.
The launch of our Motiva, Florida, so to us when we think about.
Mental spend of course, there are going to be new new people involved specifically in breast reconstruction, but our team is very strong and caters to that type of a product. So I think it is nothing new to the company and we're growing very fast and we're adding capabilities across.
The board now and when it comes to you know to pent up demand and how we see the future.
You know the way we are growing it's hard to respond that specifically, but I can tell you you know we can't wait for the pandemic to be over.
We don't see the end of the pandemic as a period, where we will see.
Section in and growth, we actually see it as a great time for us to be able to meet again in person with surge and especially those surgeons debt in the past have been skeptical about motiva and same thing with our medical education, and we will continue to do online medical education.
But definitely some of these surgeons will require.
And person medical education, and those are things that we can get done once the situation improves.
Thank you.
Yeah.
The next question is from Anthony Petrone of Jefferies. Please proceed with your question.
Thanks, and first good luck Renee as you as you go into your new endeavors and good luck to the team as you transition and.
My questions will be on first on China, and and pricing overall, so J G. I'm wondering if you could just recap the market opportunity around China. It was previously marked at 150 to 200 million.
Within the global market book, but at premium pricing. So just want to get a recap of that calculus and then.
As you look at implant pricing sort of globally. We now have the nature report published sheer was out there earlier this year and there's been obviously a lot of data behind those 2 publications on.
The lymphoma incidents and so I'm wondering is that impacted at all the actual procedure pricing on the surge and and and by extension implant pricing.
Yes, Thank you Anthony and.
For us, it's always been about showing and noncommodity product and and commodity market can make a difference and and we've been winning market share over the last few years by pricing our products. According to the science and innovation that we bring.
Surgeons and patients so for us.
Ergonomics too just to give you. An example, and has it proprietary uhm smooth silk surface and at the same time improve chemical and mechanical properties no more ergonomics more patient comfort. So many different things. So when we think about the Langer paper is 1 of so many different components.
That reinforce our premium pricing.
So as we go into me of course, we think that the value that we are creating should be price. Accordingly. So we will continue to do that and when you look at China, China is a premium price country. It's you know is not known to any book you know to everybody, but you know it's about 100000 procedures.
A year and those hundred thousand and procedures are done with you know products that are not local to the Chinese market and are priced.
At the highest asp's worldwide for any of their manufacturers. So you know we can't wait for for us to gain approval and China. So that we can get ahead and bring our products that.
Are seen as as as luxury products already and China Uhm before the pandemic began over 25% of the patients that we saw and South Korea, we're paying to be able to get on T by implants and depth market. So we certainly do see it as a as a good indication of what we would be doing.
And China and just overall you know our our our strategy is to create healthy growth you see it with the gross margins and we continued show and I think those will improve over time as we bring new products and we go into markets like U S and China.
Thank you.
Thank you.
And the next question is from <unk> hold on a Goldman Sachs. Please proceed with your question.
Thanks, and good morning. This is go for I mean, first 1 and emphasize anthonys comments for Renee and congrats and and good luck with everything going forward Uhm I'm, hoping 1 Jose that you can talk about the search process, replacing Renee and and maybe the points of emphasis on how strategically you're thinking differently than you did.
You know the last time you went through this process.
Yeah of course and.
Good morning, Phil I think you know last time, we did this it was pre I P. O. You know we were you know getting set up and there were so many things that had to be done so.
And they did a phenomenal job and creating a very strong team that could you know take us from just being a private company and in the region of the world to actually becoming a global company with all the you know the respect of compliance rules across the board. This time around you know we have the opportunity.
And you need to thinking about the future you know the company that we will be in 2025 and I think the board is you know is is trying to take this as a as a great opportunity to you know get.
Get the person that uhm can linus with Uhm would that view and definitely you know when we talk about the future. We talk very clearly our aim is to become the dominant and.
And you know player in this industry you know, we're bringing new products that are you know, creating new categories like minimally invasive transforming breast reconstruction into this aesthetic breast week on concept and you know the way I see this is by having to CFO that is a strategic partner to to that for you. So.
You know, we'll take our time or you know, making sure that we look at all the different opportunities and you know when it's time, we'll let you guys know.
That's great. Thanks for all of that the second 1 you know I appreciate that conservatism and forward numbers, but updated guidance does contemplate it at least some slowing and the second half from first hand, and if you look again to normalize kind of 2019 numbers I know you called on vacations, probably more so and 3 too but.
And maybe comment on how COVID-19 variance or vaccine rates may still be limiting procedure problems and and what sort of contemplated and and to have guidance on the COVID-19 front. Thanks very much.
Yeah, No I think that's that's a that's a fair comment you know we are seeing excellent and momentum and our business and you know when we think about the second half of this year. You know, we're always gonna be conservative we're always going to take into consideration you know the difference and.
<unk> and you know just as you know we see the possibility of their variance, making a you know and.
Mass and certain regions of the World would we haven't seen and last year and a half is that you know because of the regional spread that we have and our revenue then you know when the situation gets tougher and Latin America tends to get better and Europe, and and and Asia and the other way around and so you know we're very we're very I would say happy with the way the.
<unk> team has performed over last a year and a half during the pandemic and we think that you know it's going to it's going to get well over time as a vaccination campaigns improve the situation will improve we saw it and Europe already and the first half of this year and we think that's gonna be the case, but we're mindful of what's going on out there and.
I think that's that's what the guidance says and you know there is a scenario and which you know we do even better. So I don't think you know we're trying to be too conservative but at the same time, we're mindful of situations.
Great. Thanks for all the comments 1 a day.
The next question is from Murray <unk> of B T. I G. Please proceed with your question.
Thank you good morning, and thank you for taking the questions and congrats on a great corner and.
I just want to ask 1 on F. D. A uhm you you've mentioned that the timelines are on track there and I'm just curious if you've had any further discussions with the agency and know there have been potential for thinking about a acceleration of and point. So I just wanted to hear what the later on those discussions.
Yes. Thank you Marie and you know 1 of the most important things is that you know just next month all of our patients and our aesthetic cohorts will have passed the 2 year Mark. So that is a significant milestone for us and you know just as a reminder to everyone.
The F D. A president for approval of Silicon gel filled breast implants. It's 3 years of clinical data. So you know we continue to explore those options with our 2 years data now that you know we're gonna get to that milestone. So I think would that data on hand, we can have more meaningful.
Patients with the F D a about that.
Okay, that's great, let's day Uhm, let's day updated on that as well and then I guess you know 1 last 1 for Renee R or certainly sorry to see you go there and and wishing you a lot of luck with your next year I'll I'll take 1 last question and here for you Uhm I thought the Casper and this quarter was impressively low very nice.
And with that wanted to hear you know what sort of got you there and and what we can expect for cash burn going forward you certainly made a lot of progress on that and my tech.
Thank you Marie I appreciate it and and also the kind words from from everyone else on the line. It's been lovely working with all of you. So yeah, Casper and and you know we're committed to it and and we're seeing the results and.
And he can teach us from the first half of the year. You know we will continue to invest in the business. So Casper and will go up from where we are this corner and but it's been really nice and see how we're managing the balance sheet, leveraging everything and yet performing that you know as we've mentioned about COVID-19 and and activities coming back.
And to play and we will continue to see Casper and increase from here, but again, we stay committed to ensuring that overall casper and for the year and down from Prepandemic levels.
Alright, very good thanks again.
Thank you for joining us on today's call and we look forward to providing or next quarterly update and November. Thank you very much.
This concludes today's conference and you may disconnect remark at this time. Thank you for your participation.
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