Q2 2021 Vericel Corp Earnings Call
Excuse me. This is the operator today's conference will begin in 5 minutes your lines will be placed back on and Mr. Cold. Thank you for your patience.
[music].
[music], ladies and gentlemen, and thank you for standing by and welcome to be ourselves second quarter and 2021 conference call at this time.
All participants are in a listen only mode. I would also like to remind you that this call is being recorded for replay and well now turn the conference over to Eric the parents and their sales head of financial planning and analysis and Investor Relations.
Thank you operator, and good morning, everyone. Welcome to have ourselves second quarter 2021 conference call to discuss our financial results and business highlights.
Before we begin let me remind you that on today's call and you'll be making forward looking statements covered under the private Securities Litigation Reform Act of 1995.
These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and describe more fully and our filings with the SEC, which are available on our website.
In addition, all forward looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.
Please note that a copy of our second quarter financial results press release is available and the Investor Relations section of our website.
We also have a short presentation with highlights from today's call that can be viewed directly on the webcast or accessed on our website and.
I'm joined on this call by <unk>, President and Chief Executive Officer, Nick Colangelo, and our Chief Financial Officer, Joe Mara.
I will now turn the call over to Nick.
Thank you Eric and good morning, everyone. The company continued to execute extremely well and the second quarter as we delivered another quarter of strong financial and commercial results from.
From a financial perspective, we reported total revenue of $39.5 million for the second quarter and increase of 97% compared to the second quarter of 2020, and 51% compared to the second quarter of 2019.
We also generated positive adjusted EBITDA and operating cash flow for the fourth consecutive quarter.
Based on these results, we're raising our full year total revenue guidance to $168 million to $171 million and adjusted EBITDA margin guidance to 23% to 25% Joe will provide further details regarding our updated 2021 financial guidance and a few moments.
From a commercial perspective, we continued to deliver strong results with respect to the key underlying growth drivers for both BC and episodes.
Casey biopsies, which grew more than 50% and the first half of 2021 compared to the same period and 2020.
Achieved record quarterly and monthly highs in the second quarter.
We also had a record quarterly high and the number of surgeons, taking basi biopsies with strong performances across both our legacy and expansion territories.
Importantly, the 2020 expansion territories led the country in terms of new biopsy surge and growth and overall, new biopsy surgeons added and the first half for the year.
Based on the efforts of our expanded sales force as well as the strong surgeon engagement, resulting from our highly effective virtual and in person marketing programs, where we are.
Well positioned to meet our target of growing the number of surgeons, taking macy biopsies by more than 20% this year.
We believe that the strong growth and biopsy surgeons, which is a primary growth driver not only for this year, but for the years ahead reflects the strength of the underlying <unk> business fundamentals.
And positions us to continue to drive sustainable penetration into the <unk> addressable market.
Turning to our burn care franchise. In addition to generating record quarterly episode revenue of $12.2 million. We also achieved record quarterly highs and the number of episodes biopsies and the number of burn centers grafting patients and the second quarter.
We believe that the recent changes to our episode sales leadership and customer facing sales and clinical support roles.
Driven the increase and our burn center customer base, the higher utilization of episodes at the patient level and ultimately the substantial increase and episode volume.
Importantly, the significant increase and episode grafts per patient and has also led to an increase and our estimated total addressable market or Tam for episode or.
Our previous episodes Tam of more than $100 million was developed several years ago and was based on the historical number of episodes grafts per patient used at that time.
The actual graph utilization trends over the past year as described on slide 5 and our accompanying earnings call presentation have increased the total addressable market for episodes and more than $200 million.
Based on our strong results and the first half of 2021, we believe that we're well positioned to continue driving sustained penetration into this increased Tam and strong episode growth moving forward.
Turning to Nexobrid I'll begin by noting a few important points first based on episodes outperformance. This year, we now expect that our burn care franchise revenue for 2021 will significantly exceed our initial revenue expectations for this year, even with the delayed <unk> launch.
We also believe that with additional time for field force training disease State awareness and continued burn center training and the use of Nexobrid through the next expanded access protocol that will be and even better positioned to drive nexobrid uptake upon approval.
And finally, we were pleased to see positive top line results that met recently reported for the Nexobrid Phase III pediatric study, which met all of its primary endpoints with highly statistically significant results reinforcing the strong clinical profile of the product.
In terms of the Nexobrid BLA Verso will now lead the BLA resubmission process and partner with medimmune to leverage their best experience with Nexobrid, our clinical regulatory and operations teams have a strong track record of regulatory success that we believe positions us well to drive the resubmission process, while it is <unk>.
Premature to provide a specific timeline for the BLA resubmission and we're actively preparing for a type a meeting with the FDA and will provide a timeline update at the appropriate time.
And we remain very enthusiastic about adding nexobrid to our burn care franchise and look forward to bringing this innovative product to the market as expeditiously as possible and.
I'll now turn the call over to Joe to provide more details on our second quarter financial performance and our updated 2021 and financial guidance.
Thanks, Nick starting with the income statement total net revenue for the second quarter increased 97% to $39.5 million compared to $20 million and the second quarter of 2020 and included $26.5 million and Macy revenue and $12.2 million of Epistyle revenue compared to $15.1 million.
And for $9 million of Macy's and Epistyle revenue, respectively, and the second quarter of 2020.
Total revenue for the quarter also included approximately zero point $8 million of revenue related to the procurement of Nexobrid by BARDA for emergency response preparedness.
Macys revenue and grew 76% compared to the second quarter of 2020, and Epistyle revenue grew 148% compared to the second quarter of 2020.
Compared to the second quarter of 2019, mainly revenue grew 27% and episodic revenue grew 128%, reflecting the strong underlying growth of both franchises compared to a pre COVID-19 baseline.
Gross profit for the quarter and was $26.9 million or <unk> 68 percentage of net revenue compared to $11.4 million or 57 percentage of net revenue for the second quarter of 2020, which was more than double the gross profit and the prior year.
Total operating expenses for the quarter for $36 million compared to $19.7 million the same period and 2020.
The increase in operating expenses was primarily driven by higher noncash stock compensation expenses related to our higher share price as well as incremental spend across all areas and the business when compared to the constrained spend in 2020 due to COVID-19 related factors.
Net loss for the quarter was $3.8 million or <unk> <unk> per share compared to a net loss of $8.3 million or <unk> 18 per share and the second quarter of 2020.
Non-GAAP adjusted EBITDA for the quarter was $7.8 million or 20% of net revenue compared to a loss and $3.5 million and our second quarter of 2020.
Finally, we generated approximately $5 million and operating cash flow and at quarter and as of the end of Q2, the company had approximately $116 million and cash and investments compared to $100 million as of December 31, 2020, and no debt.
Transitioning to our updated financial guidance for 2021.
We are increasing our full year revenue guidance and now expect total revenue of 168 to 171 million for approximately 35% to 38% growth.
This compares with our previous full year revenue guidance of 165 to 168 million or 33% to 35% growth.
The revenue guidance increase is driven by episodic, which we now expect to have full year growth and a low 40% range compared to our previous guidance of growth and the high 20% range.
We are maintaining our previous macy guidance and expect full year growth and the mid 30% range.
This guidance for Macys reflects a higher growth rate and the second half of 2021 versus the first half of the year when compared to the same periods and 2019, driven by the significant growth and both surgeons, taking biopsies and overall biopsy and the first half of this year.
In terms of quarterly phasing.
We're expecting the typical Q3 cadence compared to Q2.
And that the factors, which drive the strong sequential step up in Q4 are in place.
Overall, our guidance assumes that approximately 60% of our full year revenue would be and the second half of 2021, which is consistent with prior years.
And this guidance for Macy's and assumes that biopsy conversion rates and timing or Cowen and <unk> of that conversion is generally in line with historical patterns and that COVID-19 dynamics do not materially change those patterns versus prior years.
Additionally, we expect to recognize approximately 0.8 to zero point $9 million and revenue per quarter, and Q3, and Q4 related to the BARDA stockpile procurement.
Moving down the P&L, we continue to expect gross margin to be 70% to 71% for the full year and operating expenses to be approximately $115 million for the full year.
And finally based on and increased revenue expectations, we are increasing our non-GAAP adjusted EBITDA and margin guidance for the full year, the 23% to 25% compared to the prior guidance of 25 to 23, 5%.
Importantly.
This updated adjusted EBITDA guidance for the full year with more than double our adjusted EBITDA of approximately $19 million and 2020.
Demonstrating and continued strengthening of the overall financial profile of the company.
Our financial guidance also assumes that the COVID-19 dynamics do not worsen materially, including the impact of the Delta Varian and the second half per year.
This concludes our prepared remarks, we will now open up the call to your questions.
Ladies and gentlemen, if you have a question at this time. Please press the star and then the number 1 key on your Touchtone telephone if for your question has been answered or you wish to remove yourself from the queue. Please press the pound key.
Yeah first question is from the line of Ryan Zimmerman with BT and EE.
Good morning, and thanks for taking the questions.
To start with <unk> for a moment here.
To perform very well and.
And I'm just wondering Nick if you could elaborate a little bit on the dynamics within that yourself in terms of market dynamics and the incidence of burns for.
And as the higher grafts per patient that youre seeing and kind of.
Give us your thoughts around your expectations for those 2 dynamics and the interplay going forward.
Yes, Thanks, Ryan and good morning, so as we've talked about.
We made changes recently to our sales force leadership and the customer facing roles in terms of sales reps and clinical support specialists and.
We continue to believe that that has had a very significant impact in terms of the number of burn centers that were engaged with where we now have greater coverage.
And then obviously as our reps and clinical support specialists continue to educate surgeons on the optimal use of episode that's led to an increase in the grafts per patient and.
And obviously led to the increase in episodic volume. So that remains it's kind of a theme we've been talking about all year and I think the performance over the past 3 or 4 quarters has demonstrated the impact of those sales force changes in terms of market dynamics I know, there's a lot of commentary out there.
Other around sort of reopening and and greater incidents of burns and and so on and I would say for our patient population, which as you know are really the most critically and severe.
Severely burned patients.
I don't really feel like there's really any reopening dynamics, that's driving it may contribute a little but certainly not at the same level as our sales force effectiveness.
Net patient population, so we had talked about.
Even earlier this year that.
In Q4, and Q1 cumulatively it was the highest biopsy and we had seen and that was obviously before any reopening dynamics. So I really think if we use more towards the sales force effectiveness than any market dynamics.
Got it that's very helpful. And then maybe just 1 on guidance.
Thinking about the past 2 quarters for ourselves beat expectations on the top line by.
For take 8%.
So and so you'll be at Macy or episodes are a combination of the 2 and yet.
<unk> increased by roughly about 2% and each of those kind of past 2 quarters. So maybe for for both of you Nick and Joe kind of help us understand and your guidance philosophy and kind of what may or may not be constraining your decision to take.
How does that guide.
Higher than you are right now.
Well right and I think I'll start and Joe can chime in as well, but we've kind of had a.
Consistent guidance approach for several years now.
And are we kind of model out a bunch of scenarios and.
We try never to get out over our skis and and yes, we've kind of.
Updated the guidance already twice this year based on outperformance and moving.
A prudent approach, especially given theres always as we talk about episodes and given this sort of low smaller patient population. As you know there are challenges forecasting and episodes. So we really never want to get too far out ahead on that and then.
And then with Macy I think we've been we upped the guidance in the first quarter to mid 30% growth I think thats, a pretty healthy growth growth rate and and we are.
We're just comfortable where it is right now, especially.
And as you've had some dynamics out there around.
Reopening and patient behavior and things like that so really no reason to kind of get.
Get too aggressive at this point for the year.
Yeah and this is.
Joe Ryan Thanks for the question and just to add and if you go back a little bit and time, we started the year kind of above a 30% growth rate. When you think about the total company on guidance and then again <unk>, which last year were talking about kind of high single digits. If you look at and progression there youre talking kind of mid teens to high <unk> to low <unk>.
So and certainly as we've seen episodes and continue to perform that certainly factored in as we think about guidance and then really from a Macy's perspective.
As Nick talked about we kind of started the year above 30% in line with that total growth rate and we continue to see the underlying drivers. So we're certainly thoughtful on that.
And certainly a full year aspect to think about as well as kind of a quarter to quarter aspect.
Understood I appreciate the color thanks for taking the questions and congrats on okay.
Thanks, Ryan and thank you.
Your next question is from the line of Danielle and policy with SBB Leerink.
Hey, good morning, guys. Thanks, so much for for taking the question.
Quick question on and excuse me, the reopening dynamics and any lingering COVID-19.
<unk> I mean are you seeing the referral funnel is it back to a 100 per center, how can you characterize that.
Recovery here at this point and time.
Yes, sure Danielle <unk>.
Number 1 I think a couple of things we track our sort of whether it's general market commentary or market research, we do with some of our top surgeons and looking at their surgical volumes and where that.
As compared to pre Covid levels, and I'd say, that's still probably 5% to 10% down versus the pre COVID-19 time frame clinic visits were lagging that a little bit but seem to have seem to be catching up a little bit more now since December so those dynamics.
Quite back to pre COVID-19 levels, but.
And are catching up I would say in terms of the recent commentary around the delta variant or that.
Sort of situation, we really haven't seen any impact at this point in terms of.
No widespread kind of facilities restricting surgeries and so on and I think 1 thing we do think about there is that.
For any surgical procedure patients will have a pretty up COVID-19 test cases.
Tenders surge or spike.
You'll have patients that will have to reschedule, if they test positive and so.
And keeping our eye on that and then from a reopening dynamic lots of commentary around patients physicians, taking vacations and things like that and I think it just.
Generally leads to a little.
Less linear or a little choppy or sort of a month to month for kind of dynamic, but overall again, we kind of take a step back and look at the <unk>.
Significant increase and surgeons, taking biopsies the record number of biopsies that were receiving and we feel really good about the underlying growth drivers for the business.
Understood. That's helpful. And then just 1 quick follow up on that that growth and biopsy and surgeons I think you've you said, 20% growth correct me, if I'm wrong there but.
And how are those new surgeons that are starting to biopsy ramping relative to sort of past years and surgeons would come on on line. Thanks, So much yes.
So it's kind of early days, when we just get new biopsy surgeons.
In terms of how they're what they're implant behavior will be but I think we'd say consistent the.
Consistent from year to year that the patterns for.
For new Surgeons are the same as we've seen and in prior years. So we expect that to remain the case.
Thank you.
Okay. Thanks Daniel.
Your next question is from the line of Chris Cooley with Stephens.
Good morning, and thanks for taking the questions and congrats on a great quarter.
Just 2 for me if I may I, just wanted to follow back up on the episode a little bit here. When you think about the step up and Tam.
And then the revised guidance, if I'm doing the math right here, it really kind of applies that.
And now on average you are still in early days in terms of stepping up the number of grafts per patient just wanted to 1 and see if I could.
Kind of confirm that and when we think about our realized each case is different but and.
In terms of that step up you're still cite let's say sub 50% in terms of the step up and the number of grafts for patient when you look at the increase and the Tam relative to the implied annual growth guidance and just trying to think about where we were and that.
Adoption curve.
Yes so.
Chris I'll start and.
Nick 1 stat and Canada.
Kind of take a step back on the <unk> guidance right kind of more near term and obviously, we've had some really strong quarters of late kind of run rates and kind of $9 million plus over the last few quarters.
But if you look back historically prior to those quarters and you're talking more about kind of a $6 million to $7 million run rate right. So I think the business is really kind of shifted a bit and as we think about guidance I think we're mindful of that and in a sense that we are certainly at a higher run rate and we think the execution on the sales and the field force is <unk>.
Pruned as Nick has talked about but we are mindful of its difficult to predict and as we think and the back half of the year.
And kind of prior run rates.
Not quite at the last quarter, and obviously as past quarter was much higher.
As you think about that relative to the Tam I would say I think what you are talking about it as kind of that 90 to that 120 average grasp for patient and I believe but if you take a step back I.
I think what we said a couple of years ago or for years ago is we think the Tam is at that call. It $100 million plus number and really what that means is and now what we're saying is we think that's $200 million plus and I think the key difference. There is what we are saying is on average we are seeing higher utilization or a higher number of grafts per patient.
Stork like that number was around 90 per patient now its actually closer to about 120. So I think we've taken a look at that trend over the last few quarters, and we think it's a bigger addressable market and there's certainly some rounding there and average price of 3000, and that's changed a bit as well, but certainly we think it's 200 million plus so as we kind of think about where.
<unk> now we still think there's a fair amount of opportunity as we think about that Tam. So certainly that Tam has increased a bit and again theres a bit of a rounding there I think which is part and the answer to your question, but as we think about guidance. We've continued to take that up based on kind of what we're seeing and the underlying trends and the performance to date.
That's really helpful. And then just as a quick follow up for me the passing of the Baton here on the next for bread.
Resubmission could you just maybe.
I guess, Nick and broad strokes kind of paint kind of what's transpired there and what specifically you think you can bring to the table here that might.
Expedite.
And the process and any challenges you see post.
And the prior notification from the agency. Thanks, so much.
Yeah. Thanks, Chris So as I mentioned in my prepared remarks, we have a clinical regulatory and operations team with a great deal of experience and a great deal of success.
And the regulatory front not just.
During their bear sell 10 year with respect to the Macy BLA.
Episode label expansion and probably a couple dozen.
Prior approval supplements principally related to CMC matters for for Macy and episodes over the past several years. So it starts with the leadership like helping our COO was.
Ahead of <unk>.
North America, and regulatory affairs for the Sanofi Genzyme business unit, so highly experienced leadership and then.
The members of his team our EPS in that sort of realm of experience as well, whether it's on the CMC side clinical side et cetera. So I think we just bring a great deal of experience and a track record of working well with the FDA and.
And then we're.
And a great position to leverage the best experience that nexobrid break for medical and brings.
Given 20 years of history with experts and we feel good about.
The path forward, obviously, we still have great.
Deal of confidence and the clinical data with <unk> and look forward to bringing it to the market and I would say for us, it's probably a little bit less about how.
First we can do it and a little bit more about making sure we put a quality package together.
And that will ultimately lead to approval for.
From the FDA.
Understood. Thank you so much.
Okay. Thanks, Chris Thank you.
Your next question is from the line of Jeffrey Cohen with Ladenburg Thalmann.
Nick and Joe how are you.
Good Jeff good morning, good thanks.
So I'm hopeful for.
For Marin.
You can share still follow through from Chris's comments on the the.
For Resubmission and any effect on your R&D that you would kind of call out beyond your opex number for 2020.1.
Yes, I don't think we don't really see that having a material impact on the operating expense line.
Okay got it and then.
Secondly, can you give us a little further flavor on Medici and as far as Q2.
Being pretty strong borrower shoes and pull throughs.
Do you think there was as effective people waiting on the biopsy side and then the pull through will be and plan side. How do you see the current was pulling out on the other and.
And kind of what you need to show and Covid into that scenario for us. Please.
Well, yes, I'll start just on the biopsy side.
And we continue to see strength and in not only biopsy surge and growth, which is we've always yield.
<unk> been stating that that's kind of the key primary growth driver right now and Thats really what is driving the growth and biopsies. The average biopsies per surgeon, which is another key driver is kind of consistent with where we were in 2019, and we expect that to increase.
And the second half of the year. So we think all those dynamics are set up.
And really well for not just the second half of this year, but into 2022 and beyond so that's number 1 and in terms of the pull through on the implants as Joe mentioned in his prepared comments, our assumptions for the back half of the year and I think it is important to recognize that.
Our guidance suggests kind of that 40% first half 60%.
And second half of the year.
Revenue for Basi, which is.
Which has been consistent since 2017 other than last year, where it skewed a little more heavily into the second half of the year. So.
That's the dynamic that we would expect to see absent any changes that as you mentioned any COVID-19 related factors might have on sort of timing of conversion and so on.
Okay. So no material flow through percentage, you say, you're factoring and versus where you've been thinking over the past number of years.
Bill.
Got it okay, and I would say, it's consistent as we've talked about in the prepared remarks really consistent with kind of historical patterns and what we've seen and other years.
Okay perfect stronger at all this quarter. Thanks.
Thank you Jeff.
Your next question is from the line of Sam brought off ski with truest.
Hi, Thanks for taking the questions just to start off on the Sony and he touched on it in the prepared remarks.
Curious to hear a little bit more about the account dynamics and surgeon wins coming from.
From the new sales force.
And E D.
Deeper you can go into the Navy and the number of our incentives here and now.
And if these new reps and are helping to.
And to drive and you kind of line.
And there.
Yes, I think.
And.
Sam.
The way I would say it is we've talked in the past about we are definitely seeing activity and burn centers that I think we mentioned it on and on our last call that either never had used episodes or had used episode.
And the number of years and so there's no doubt that our sales representatives are having an impact in terms of broadening the customer base.
And you also have to keep in mind that sort of at the tail. There's some burn centers that may not see episode patients routinely and so theres a little bit of churn on the sort of tail end of things, but I think we absolutely.
Our scene and impact from our new reps in terms of broadening the customer base.
Within those centers I think it is kind of as you would.
Spec and more they are present, the more often and they see patients who are admitted and educational discussions with our our surgeons about appropriate patients appropriate treatment plants et cetera, and we do think Thats also having an impact in terms of the number of grafts per patient that we've seen over the past several.
Quarters.
Great and helpful.
That's helpful and then just.
And you start to think about the sales force getting a little more mature and maybe it's a little early here, but.
Thinking about <unk>.
And sustainable and then and growth rate for sure.
And maintaining that 20% surge in growth there and then.
And into 'twenty 2.
Nimble assumption going forward. Thank you.
Yes. So this is Joe so we haven't obviously given guidance on 'twenty 2.
As we talked about we think we're in a strong position.
Exceed that 20% target and we've talked about in terms of number of surgeons on maintenance. This year I think as we look forward. We still believe that will be a material growth driver. So what that percentage looks like I think we will see but I think that as we think about the amazing growth drivers, that's 1 of them and the biopsies per surgery and that conversion rate and hopefully over the long.
Term are also growth drivers so that will certainly continue to be important.
And what to see kind of where and what that looks like next year, but we think that will still be pretty pretty robust and a 22 for sure.
Okay. Your next question is from the line of Kevin <unk> with Oppenheimer.
Hey, guys good morning.
And I want to follow up on the prior question with regard to how to think about.
Dana ability and growth and maybe from your perspective.
Yes.
And we should think about.
And the.
Yields relative volume.
<unk>.
Potential Macy's samples from the Serbian share youre, bringing on.
And now.
Great to see the high growth rate.
Are there.
A number of high volume and sports medicine surgeons that are sort of humming.
And with some of these more recent.
And.
And given the success you've had over and out extended period of time, and what market and maybe you can provide and update as well as to.
How you would characterize the potential volume and for a quote from some of the general orthopedic Surgeons, which I know your cost line as well and finally I appreciate at this level.
And the amount and potential Macy's volume as Paul for OSA.
The same number of surgeons being at 3 or 4 years ago.
Yes, Thanks, Kevin and good to talk to you. This morning, So I would say that we still believe it's kind of early days in terms of adding surgeons and all.
Follow on to Joe's response that even in 2019, when we had our 3000 and initial.
Targets, we're adding 25% for biopsy and surgeons in 2019 versus 2018, when we're 3 years into launch at that point, obviously, we expanded our target universe to 5000 and surgeons when we added the reps and we ended 2020 with 500, so less and third we said.
We'll grow 20 plus percent. So you can do the math and call it $18.50, or so so you're still.
Barely more than a third penetrated into the surgeon base. So we think there are.
Several years ahead of strong growth in terms of adding surgeons and Theres No reason to think we won't see the same dynamic that we saw.
Based on our initial target surgeons. So that's number 1 in terms of sort of the potential for those surgeons.
And we're calling on high.
High volume cartilage repair surgeons and so from my perspective at this point and as we are penetrating this expanded surgeon base.
There is no difference really and the potential for these surges and the numbers are really still on a per surgeon base basis quite low and they see a very large number of patients with cartilage injuries and so we don't put any sort of.
I guess governors on what we think any of our target surgeons can do.
Great and then maybe just a follow up question.
And the Tam for after sales.
I appreciate for higher revenue.
Per page to higher graft volume, but can you just comment and a little bit more granularity.
Whats driving that and your assumption is that a level medical education.
Surgeons are using <unk>.
Current Wei Wang.
So and all of that go and you inherited this product many years ago.
Is it.
And now that you brought in and out more centers and Youre seeing newmar.
Numerical even more patients who are the the.
Optimal use is rock solid and spots severe patients and just kind.
And what I understand I guess, if there is opportunity to expand the Tam I'm just trying to understand how much of the data for.
And the adoption and the product differently and virus.
Yes.
<unk> sales.
Great job, Okay sure.
Assets with more broadly available and so you are getting more competitive.
Kind of optimal patient.
Yes, so as I mentioned, we're certainly seeing and expansion of the customer base, and then done and individual patient basis I think.
And you referenced and a very important point that a lot of it has to do with the medical education from our reps and our clinical support specialists and.
The certainly there is.
Our medical.
Fares team as well and where for instance at a meeting earlier this year 1 of our largest customers presented data on the use of episodes and posteriorly surfaces. So.
And additional use for some centers, who may have felt comfortable with episode alone anterior surfaces.
Might have not used it is routinely you might have used autographs on post area surfaces. So there's that kind of educational initiatives.
For initiatives that we believe are having an impact and then just.
Given the size and severity of these burns.
And we've seen as we've implemented and sort of an extra graft program where.
If during the manufacturing process, we have extra graphs, we ship them and they get used quite often which might tell you that the initial estimates for the number of grass needed might be a little low.
And that has a role in episode volume as well so it really is about.
Our clinical support folks and sales reps engage and earlier in the process, putting the other treatment plans and educating the surgeons on optimal use of episode and that we think 7 and the biggest impact.
Thanks for the question.
Okay. Thanks, Kevin.
Your final question comes from the line of Arthur <unk> with HC Wainwright.
Good morning and alone.
And for all RK, Thanks for taking my question.
Just had a follow up on the Nexobrid BLA resubmission.
And they missed.
And just wondering have you guys scheduled a meeting with FDA and.
And.
Also between your communication with regulators.
And how you're feeling about for the irregular to perform the site inspection timely up to do the resubmission. Thank.
Thank you.
Yes, so so number 1.
We certainly as I mentioned on my in my prepared remarks are actively planning for a type a meeting with the FDA. So thats a meeting that.
You request within 3 months after a regulator and FDA regulatory action.
And once that's requested the FDA is 14 days to respond and the beating is typically scheduled within 30 days. So that's kind of the timeframe within which we are operating so obviously we are.
Looking to do that as soon as possible and a type b meeting for a little different than for instance, a pre BLA meeting.
That you have to submit a meeting package along with the meeting request so theres more front end.
Work to be done and a type a meeting versus for instance, a type C. Pre BLA meeting where it gets scheduled 90 days out so.
Requested early but then you have to submit a package 30 days ahead of that so it is just kind of a difference and the timing.
So once a pack and package and meeting request are submitted the meet and gets scheduled and pretty short order. So.
So again, that's the timeframe we're working within.
And beyond that we're not going to comment on when the meeting is scheduled and so on but we'll certainly update.
Investors and analysts and the appropriate time.
In terms of the inspections.
That's not a discussion that is.
We've been engaged with at this point.
But as we mentioned before you certainly could resubmit and and.
And the inspections, just need to occur prior to and approvals.
Thank you and thank you for the color and congratulations on the strong quarter.
Okay. Thank you very much.
At this time there are no further questions.
Okay, well I'll just close by saying thank you to everyone for joining us this morning and for your continued interest and bear so.
As we mentioned today, obviously the company executed extremely well in the first half of 2021, and we remain focused on continuing to deliver on our long term strategy to bring our products to even more patients and drive significant growth and profitability and the years ahead. So thanks again and have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may all disconnect.