Q2 2021 Aziyo Biologics Inc Earnings Call
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Yeah.
Ladies and gentlemen, thank you for standing by and welcome to the ACO Biologics Q2, 2021 earnings Conference call.
At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
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I would now like the hand, the conference over to your speaker for today.
The sample you may begin.
Yeah.
Thank you and thank you all for participating in today's call joining me of Ron Lloyd Chief Executive Officer, and Matt Ferguson, Chief Financial Officer.
Earlier today of the Eau released financial results for the second quarter ended June 32021, a copy of the press release is available on the company's website.
Before we begin I'd like to remind you that management will make statements. During this call that include forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.
Any statements contained in this call that do not relate to matters of historical fact or relate to expectations or predictions of future events results or performance are forward looking statements.
All forward looking statements, including without limitation.
Those relating to our operating trends and future financial performance the impact of COVID-19 on our business and prospects for recovery expense management expectations for hiring growth in our organization market opportunity guidance for revenue gross margin and operating expenses, the commercial expansion and product pipeline.
Element expected future product launches and milestones unexpected results of performance of our partnerships and commercial products, including patient outcomes are based upon our current estimates and various assumptions.
These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements of.
Accordingly, you should not place undue reliance on these statements for a list and description of the risks and uncertainties associated with our business. Please refer to the risk factors section of our public filings with the SEC, including our annual report on form 10-K for the year ended December 31, 2020 as updated by our quarterly report on form 10-Q for the quarterly per.
And the June 32021.
This conference call contains time sensitive information and is accurate only as of the live broadcast today August 19.2021.
The Z O biologics disclaims any intention or obligation except as required by law to update or revise any financial projections of forward looking statements, whether because of new information future events or otherwise.
Also during the presentation, we refer to gross margin, excluding intangible asset amortization, which is the non-GAAP financial measure.
A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure is available on the company's earnings release for the second fiscal quarter ended June 32021, which is the acceptable on the SEC website and posted on the Investor Relations page of the deals website at Www Dot the Z O Dot com.
And with that I will turn the call over to Ron Lloyd.
Thanks, Lee good adds.
The new to everyone and thank you for joining us.
The zero delivered strong results again in the second quarter of 2021.
Net sales increased substantially compared with the year ago quarter as well as pre COVID-19 levels.
Continue to hit our internal milestones and the development of our next generation Tegra of envelope.
On our 2 main clinical trials for Kangaroo continue the role according to our plans.
We've also made meaningful progress in our ortho biologics soft tissue reconstruction and contract manufacturing businesses.
I'll share more details on all of these areas in a few minutes.
But first I'd like to provide an update on the actions underway with regard to the recent recall of the single Garner a lot of our fiber cell product.
As many of you know from our recent communications, we were notified the Lake Mary the several patients who had surgery that included our fiber cell product.
The experienced post surgical infections, including some patients that tested positive for tuberculosis.
Our team of immediately took action to investigate the matter.
This led to our voluntary recall of a suspected single donor of lot of this product.
We worked with our distributor to account for all hospitals that receive this law.
All of unused product in the slide has now been secured and quarantine.
Under the direction of the CDC samples of the return units have been analyzed by the.
U S government lab and have tested positive for micro bacterium tuberculosis.
Based on currently known information we have no reason to believe the other donor of lots of fiber so are affected.
We remain committed to providing products that enable physicians to deliver the best possible care for their patients.
While this is an extremely unfortunate events.
We are thorough review of our procedures for screening donors and producing 5 or so.
We've not identified any deviation from our established protocols, which are based on industry standards and government requirements.
Following the recall the FDA also completed an inspection of our manufacturing facility and quality control records. They.
And made no form for 83 observations.
Importantly, our culture of the Zia was built on the principle of continuous improvement in the safety efficacy and quality of our products on the wellbeing of our patients is our highest priority.
We've already made adjustments in our donor screening criteria and our goal is the broad detection of disease beyond existing industry standards and regulatory standards.
We believe this experience can be a catalyst for further advancing the state of the art for all products in this category.
Regarding the current suspension of sales of fiber cell by our distribution partner there.
Of not indicated any decisions as yet on the resumption other sales of fiber cell.
Now turning briefly to our second quarter financial highlights.
Total revenue was $12.2 million, a 42% increase over the second quarter of 2020.
And the 26% increase over the second quarter of 2019.
Core product revenue was $10 million, representing a 35 per cent increase year over year end of 53% increase over the second quarter of 2019.
Excluding sales of fiber. So we saw the total revenue growth, 4% over the first quarter of 2021, and our core products revenue grew 6% sequentially.
As a reminder of core product platforms of drove 3 primary markets.
Plenty of electronic devices, such as pacemakers defibrillators.
Bone repair on orthopedics and spine procedures and soft tissue reconstruction.
Additionally, we fulfilled tissue processing contracts through our Richmond, California manufacturing facility.
The highly leverage able component of our business.
Core product growth in the quarter was primarily attributable to an increase the awareness and further validation of the remodeling benefits of our regenerative medicine products.
We believe that our products are truly unique and we're pleased to see the continued traction of our products, reaching new patients.
Turning now to some of the recent highlights on our business and how we see this trending in the current quarter and through the remainder of the year.
Starting with the Kangaroo, our unique biological envelope for stabilizing implantable electronic devices.
Throughout the second quarter of 2021.
We made further commercial and product development advancements as well as the progress on 2 clinical trials underway.
We continue to add accounts the premiere of breakthrough designation that we received the last December.
The partnership with Premier and get a network of more than 4000 hospitals is enabling us to significantly expand our market opportunity in the United States.
Additionally, we were delighted to execute of partnership agreement in Q2 with another integrated delivery network Providence Health system.
This partnership with Providence should allow us to further expand our market share and we look forward to working with him in the coming quarters.
We've also made progress expanding our field sales organization and ended the quarter with 31 sales professionals in this part of the business.
We're pleased to see the traction our existing sales reps have made and further penetrating the market and driving growth and awareness.
For the second half of 2021 we're focused on continuing to increase the productivity of our reps.
Leveraging the partnership with Boston scientific and bio tronic to further expand sales.
We expect the higher additional reps starting in 2022 as we approach the planned launch of our next generation Kangaroo envelope.
On that note.
We're also excited to see the continued advancement of this new product.
Most recently, we achieved the next milestone on our path the FDA submission with the recent completion of manufacturing validation.
We remain on track to reach FDA submission in Q1 of 2022.
As a reminder of the next generation Kangaroo envelope will be enhanced by adding the antibiotics for sampling and minocycline for the envelope.
Following FDA submission, we expect to receive FDA clearance and launch the product in the second half of 2022.
The biological product with antibiotics has the potential to create substantial long term growth for the deal.
As an update on the clinical front, both the heel study and the de Novo studies are progressing nicely with continued enrollment.
We look forward to the clinical data for Kangaroo and we're confident the results will further allow us to demonstrate the unique clinical benefits derived from of biological envelope.
Now turning for orthopedic and spine your per business.
As a reminder, our product platform in this market consists of fiber so via bone and us to grow of it.
Despite the fiber cell recall and subsequent suspension of the purchases by our U S distributor.
We're very pleased to see the continued momentum among our other viable bone matrix partners.
This product platform continues to be an important component of our business with differentiated products and a highly efficient commercial model.
The last 2 areas of the portfolio I'd like to comment on our soft tissue reconstruction business and our contract manufacturing.
And soft tissue area, we continue to make progress in our simple derm business.
Working primarily with our independent distributors were able to bring on several new accounts during the second quarter of 2021.
We also recently signed up 3 new regional distributors and look forward to these new partners further increasing our penetration of this market in the second half of the year and beyond.
The second quarter also saw the publication of the first peer reviewed journal article related the simpler for them.
We see this publication in the June issue of plastic and reconstructive surgery as an essential first step in building the body of evidence to support simpler terms more widespread adoption.
I think it's important to reiterate the value of the diversity that exists in our core product portfolio and we firmly believe this portfolio provides a stable foundation to build from.
We're especially appreciative of the diversity when we encountered temporary hurdles with 1 product as was seen in the case of fiber so in the second quarter.
Lastly, we continue to see steady contribution from our contract manufacturing business sales were $2.2 million in the second quarter of this year.
Significantly higher the levels, we saw for most of last year.
As discussed on prior calls we believe we have good visibility in this part of our business and expect it to grow in the second half of 'twenty 'twenty 1.
Yeah.
As we look forward I'm as confident as ever in the opportunity that we have in each of our product portfolios to the.
The liver differentiated regenerative medicine products that improve outcomes and implantable device related surgeries.
We're making meaningful progress with our commercial organization and sales channel partnerships, the penetrate and expand high growth markets while.
While advancing our robust pipeline and generating clinical data.
And with that I'll turn the call over to Matt to go through our financial results in greater detail.
Thanks, Ron.
Mentioned net sales for the 3 months ended June 30th 2021 for $12.2 million of 42% increase from $8.6 million from the same period of the prior year.
This included a 35% increase in sales of core products.
81% growth in our non core products year over year.
We estimate the second quarter revenue loss attributable to the fiber to cell recall, including reimbursement for return product and the subsequent suspension of purchases by the distributor to.
The approximately $1.1 million.
Gross margin for the second quarter of 2021, with 46% as compared to 44 per cent and the corresponding prior year period.
The improvement in gross margin was primarily related to increased efficiency associated with higher production volumes compared to the year ago quarter.
As well as other operational improvements.
These gains were offset by the impact of costs recorded related to the fiber cell recall and the lower margin contribution of net sales from non core products.
We also look at gross margin, excluding the impact of noncash amortization of intangible assets and on that adjusted basis Q2, gross margin would've been 53% versus 54 per cent in the year ago quarter.
Total operating expenses for the second quarter of 2021 were $10.2 million of 35 per cent increase from the second quarter of 2020.
The main contributors to the increase for growth in commercial spending associated with higher net sales.
Spencers associated with operating as a public company and development cost associated with our next generation Kangaroo envelope of project.
Net loss for the quarter was $2.4 million as compared to a net loss of $5.2 million from the second quarter of 2020.
The current year. The second quarter included 1 time gains totaling $3.6 million primarily related to the forgiveness of the of P. P. P alone.
Our loss per share in the second quarter of 2021 was 23.
Compared to a loss of $7.99 per share in the year ago quarter, which was prior to the conversion of the company's preferred stock into common stock in association with the company for Q4.2020 initial public offering.
As of June 30th 2021, we had a cash balance of $28.4 million with an additional $5.1 million available for borrowing under our working capital on line of credit, resulting in total liquidity of $33.5 million.
Now turning briefly to the outlook for our business.
We don't yet have sufficient visibility to reinstate guidance for the full year, but we can provide a range of expected revenue for the third quarter.
We expect net sales in the third quarter, a pea in the to be in the range of $11 million to $12 million.
This represents a year over year change ranging from negative 7% deposits of 2%.
Excluding fiber cell sales, which were assuming will not resume in the third quarter. This would represent robust growth of 14% to 24% over the third quarter of 2020.
This outlook also assumes the recent resurgence of COVID-19 cases in the United States, including impacts from Delta and other variance does not result in a significant reduction in surgical procedure volumes in August and September.
We have not seen such a slowdown so far this quarter.
And are cautiously optimistic that we'll continue to be the case.
Now at this point, Ron and I would like to open the call for your questions.
Thank you.
Ladies and gentlemen, as a reminder to ask the question you will need to press Star then 1 on your telephone.
Withdraw your question press the pound key.
Again, Thats star 1 to ask the question. Please standby, while we compile the Q&A roster.
The first question comes from the line of Matthew O'brien with Piper Sandler Your line is open.
Thanks, Thanks for taking the questions.
You know Ron or Matt can you just talk a little bit about the remediation process from here with the agency as Youre trying to get fiber cell back on the market sounds like the inspection went well you've identified the 1 lot youre not expecting any sales in Q3 of is it possible that you could start selling.
In Q4, or maybe even early next year and then can you maybe Matt just frame up.
You know potential litigation exposure. If you can at this point and then any kind of insurance coverage that may offset any any.
Or outflows that may happen as a result of the Indian litigation.
Sure, Matt Let me start and try to address the that you had quite a number of questions built into there. So let me see if we can start and address them. So your first question was around fiber cell and the ability to resume commercial sales of that product again, just to reiterate this was a single door a lot of issue.
We again recall of this loss, we've looked at all of our procedures and protocols.
We've seen that we've ever no deviation and anything that we have done relative to these protocols, which again are based on regulatory and industry standards.
The FDA as you mentioned inspect our facility so on.
No issues issued no for mid threes.
So from an overall regulatory perspective, theres, nothing really that stops us from selling fiber cell as it stands today.
In addition, we've gone on and made some adjustments into our donor screening for example, excluding donors that spent significant amount of time in other countries. There could have higher rates of T D.
And so from our perspective.
Right now of fiber so you know could be available commercially.
We do obviously sell the product through our partnership with Medtronic and Medtronic I made the decision to cease sales of this product because we were going through the recall process.
So as of this time.
Not giving us an indication on the decision to resume sales.
But there's nothing stopping us from a regulatory standpoint of.
Of commercializing 5 herself.
And so let me turn it over to Matt the go a little bit more through the your questions as it relates to the coverage.
Yeah, Matt.
So I think you asked about potential exposure from a litigation perspective, and it is true we've had.
Several claims filed associated with this matter but.
It's really very very early in the process still and so.
Ron mentioned we.
We've been through our own processes and an end.
<unk> done a thorough review on our end and we haven't identified any deviation from normal processes, either our normal processes or are those generally accepted throughout the industry. So from that perspective.
We felt like that of the.
I guess the strong point in our favor when it comes to any claims that might be made against us.
But it really it's just too early to put numbers on on what the estimated exposure is in our view.
Expect for companies like us in this industry, we have insurance debt.
Yes.
Designed to help the company like ours to deal with situations like this.
And.
I'm confident that we'll work through the situation from a financial point of view, but it's just a little early to put any numbers on it we haven't established any kind of of reserve in our Q2 financials related to this matter.
Thanks, and then and then Ron have you had conversations I'm sure you have with Medtronic and just the <unk>.
Basically waiting for them at this point in the day, giving you any kind of indication when they may make a decision or did they do you think they may of interest just walk away just given you know the the.
The the debt you know what what are the current here.
Ron I think you may be on mute stone, Yeah, obviously, Matt we felt the Medtronic weekly as we work for this recall process.
And so again our focus the first initially is on the recall on.
Securing the product also working through with the C. D C of Medtronic, ensuring patients that received the product we're getting the appropriate medical care.
That's where our focus in the energy has been and again.
The conversations with them they have not indicated the timeline here and so I'd hate to speculate as to when that decisions can be made.
I would like to say, though as you know we also sell other viable bone products through our other partnerships and we're pleased to see the continued momentum.
Of this business through our other partnerships and.
In addition, we're also looking at adding additional partnerships and those conversations are going well as we look to add some additional relationships and partnerships for our viable bone products.
Got it and then just last 1 for me is just on.
On the Kangaroo side of things I think Matt you said the core business was up 6% sequentially I don't know and I believe that any clues the impact of fiber cell on the cordless I'm, assuming it would be up more if you included 5 or so that you know how how are things going from a kangaroo perspective, you've got a lot of sales reps now.
Al.
Premier you've got Providence.
Can you just talk a little bit about the the momentum that youre seeing there across the various channels of selling that product. Thanks.
Sure. So let me let me address that so I know, we don't break out our sales and details of it really sort of core products, but we have shared in previous calls kind of what was the leading product category as we think about the performance for the quarter and when you look at our Q2 performance actually the cash.
From a product when we look at our sequential growth versus Q1 was our leading product category in terms of our zero growth and so we're excited about that and net growth I think is really coming from 2 main factors. The first is we've been able to add new accounts. This has come through mainly through our premier of agreement.
That we signed last December as you recall, we received breakthrough designation based on the CAGR of technology and so we've been active in adding additional premier accounts and we're excited for Q2, it actually sign another integrated network with Providence Health system. So we think again as we continue to add accounts, that's going to continue to drive the kangaroo of business.
And then the second factor here is that our messaging as it relates to the Kangaroo and the remodeling benefits of having of biological envelope is really resonating more with customers.
That's leading to initial and expanded use of kangaroo.
As you know, we just finished the HRS meeting.
And at that meeting very pleased to see the progress in terms of our conversations with doctors and the ability now to the gravitate towards the remodeling benefits and the patients that will benefit from this and we think that collectively what the additional expansion of accounts will continue to derive kangaroo of growth as we look at the second half of this year.
Great. Thank you.
Thank you.
Our next question comes from a lot of Josh Jennings with Cowen Your line is open.
The answer to your question on that.
Just to follow up on that.
No.
The industry.
The debt.
We've been doing this now.
1 of the next steps with the manufacturing process of here.
Yes.
And on the full clearance on the skills.
Yeah.
Yeah, So the F D a.
Did there for cause inspection based on the recall as you would imagine again, we're pleased with the the inspection results again no form for many threes.
As you know from our perspective, a very thorough review and we're pleased again the again as we also noted that there was no deviations for any of our processes.
As it relates to the screening of production of 5 herself. So again from a regulatory day.
The endpoint you know we feel very good.
And the processes that we have based on regulatory requirements and industry standards.
But as we've also mentioned during the call debt, we want to continue to go beyond that so again, we're going to continue to make adjustments.
As it relates to the donor screening and potentially look at testing for additional pathogens as it relates to these products and again I think our goal through continuous improvement is to set a new standard for the industry as it relates to this category of products.
It's great to hear that in the cloud from how much interest.
On the product.
Have a nice momentum.
The amount of debt.
The 5 or so.
Can you talk a little bit more about the Madison.
Numbers, you can give us in terms of the growth of express.
And Keith you were closer to that.
The fact that instead of miles on them. So.
So.
Uh huh.
Got it.
Yeah, So we don't necessarily breakout again any specific product area.
As we mentioned we are pleased with the continued growth.
Within our viable bone matrix product category of and through our partnerships we.
We continue to see that building as we go in the second half of the year.
But I think it's important to remember from a company standpoint that we are a diversified weekend bet. The company again advancing outcomes in patients received the implantable medical devices and I think it's important.
To take of spec setback here of remember the.
The benefit of our diversity the diversity of served US well if you think back during the Covid pandemic.
Even the like the.
Pact on surgical procedures are we actually have exhibited growth from a company perspective due to our diversity.
And so again, we have the opportunity here as you think about going forward is the build off the benefit of a diversified portfolio. So we anticipate the drive growth continued growth within Kangaroo again, as we mentioned with our other viable bone products for those partnerships again through simple derman of contract manufacturing.
So we're really excited about the the opportunity here for the second half of the year again built off this diversity, we have from a company perspective.
Great and then 1 last question on.
The simple term.
And the talent.
So he knows the early launch for from the safety warning for some of those competitors.
And on price.
And then any update on when you.
Lastly for me.
Uh huh.
On the schedule.
We expect out of that for.
For the scientists information on each of them.
For the specific improvement.
And what the.
The outcome to the.
Thanks for taking the question.
Sure. So yeah. We're we're excited about the continued momentum that we're building here with simple term.
The second quarter, we actually received our first publication on the product was published in June. This looked at a series of patients' worth about more than 100 implants of our simple derm product versus the market leader in this category.
And from the study we showed that some of the term of safe and effective. So it's great to have our first peer to peer article out in the public domain again up against the market leader again, showing excellent safety and efficacy in already from the study, which again just happened in June we're already seeing the benefits of being able to now add some additional accounts.
Based on this publication.
Also able to leverage the health of dress contract that we were awarded back in beginning of March.
So that's also helped us build momentum and then we sell the product predominant through a distributor network. We added 3 more regional distributors for simple business from Q2.
So I think collectively having additional.
Distributors the publication and then again access into more accounts through contracting will help us further expand the business.
As it relates to the FDA in the workshop.
We've yet to hear a day for that workshop and getting the F. D. A has been a little bit of preoccupied here still with the COVID-19 activities.
But we're anxious for them to bring forth the host that workshops, they'll give the chance to the talk about the opportunity of a.
The human dermis of tissue for breast reconstruction. So at this point, we're still waiting for that workshop the rescheduled.
That's true.
Thank you.
Our next question comes from the line of David Red Dot with true your line is open.
Hey, guys. Thanks for taking the questions now I appreciate some of the of the guidance you gave around Q3 and in the commentary on how the guide does not assume theres going to be a significant impact of surgical procedures in the August or September.
But could you provide I guess or discuss some commentary on whether or not there's been an impact in the in the month of July from the recent resurgence in.
Any reason.
The fourth quarter that we shouldn't be thinking about kind of similar historical trends that we've seen previous out of out of them.
Not sure if maybe the the recall of fiber cell had impacted our heads and supported for fourth quarter growth sequentially.
Is there any color here would be helpful.
Hi, David This is Matt.
Try to speak to that.
So.
Yeah.
We've seen the business hold pretty steady even as the Delta increase.
The increased concerns about COVID-19 generally around the country and I think it speaks to the nature of the procedures that.
That our products are used in and.
No of course always see some fluctuation month to month, but we generally saw.
Procedure trends and sales trends hold pretty steady if we went through July and just a few days into August here, but but so far in August as well so.
We're hoping that continues to be the case, even in the face of increasing concerns that are obviously out there about the variance.
We have heard some anecdotal comments about more elective procedures being curtailed a little bit and in some geographies, but by and large debt that really has not affected us so far.
I think the other part of your question had to do with fiber cell and the expected contribution of that if we went through the year I mean, there's no.
There's no doubt that that was the driver of growth for us in the first quarter.
<unk> and then into the second quarter until sales.
Sales were suspended and we're still hopeful that they will resume we don't think that that will happen in Q3, but.
We'll see what happens after that.
And.
That's really the reason why we limited our guidance to 2 the third quarter just because of the.
The lack of visibility around that 1 event.
As Ron talked about I think there are other dials that we can turn on other members of gross debt that will be important for us from that always has been important for us both in our our ortho biologics business on a viable bone products.
In addition to all of the other product lines.
As you already heard on.
This past quarter Kangaroo really led the pack in terms of driving growth.
From from a sequential quarterly basis, if you were to exclude the.
The impact of fiber itself and we feel good about the business overall.
We definitely see ourselves continuing on the growth trajectory.
Except for the <unk>.
It caught the temporary setback of the suspension of fiber cell sales.
And.
We're focused on on growth from here.
Okay. That's that's helpful. Thank you I guess on on margins I mean, the expanded year over year on the quarter here and maybe more from a high level.
And you know now that the 5 ourselves kind of out of the business maybe for for the second half of the year I guess could you could you touch on and off from from a high level of really how you're thinking about that impacting the gross and operating margins and whether or not that's impacted the ability for the company either to.
Invest in the business going forward or do you any type of tuck in M&A, just just interested on how does the recall here of the pause impacts kind of the for expectations of the company that previously had thank you.
Yeah, Yeah, so in terms of gross margins.
As I mentioned in the prepared remarks that the call.
Do expect that.
Gross margins will continue to improve as we move through the year. So we were at about 46% on a GAAP basis and.
Q2, and you know I see that going up.
These 2 or 3 points by the fourth quarter of this here and there for them to grow.
After that as well certainly I think the things that are driving the growth so far.
We'll continue to do so.
We are really focusing much more intently on the.
The build scheduling and the.
The product mix, it and just making sure that we're managing our inventory appropriately and not <unk>.
The <unk>.
Excess and obsolete charges more so than than is necessary.
And then we've also looked at some technology that debt is helping out some of that from the early stages, but but it's helpful. And I think there are some other opportunity from that area as well.
From.
From an operating expense point of view.
We'll we'll keep things pretty steady in most areas of the business I'd say over the next couple of quarters, but we will have some additional cost dealing with the recall and the kind.
Kind of legal and administrative costs associated with that it's tough to put a number on those but we're.
Kind of planning on roughly on an extra million dollars or so in the third quarter and.
I don't see that continuing broadly are on for all the time, but.
Sort of what we would expect in the near term.
Okay. Thanks for taking the question.
Yeah.
Thank you.
Thank you.
Yeah.
Our next question comes from the line of Brandon Folkes from Cantor Fitzgerald. Your line is open.
Hi, Thanks for taking my question.
Maybe firstly just on the 5 yourself fitting the Medtronic decides not to bring the product back to market can you just talk about your options of thinking in terms of speaking of new partner with going with the line.
And then secondly, you talked about potential additional partnership any kind of on the environment, you're seeing kind of thing. Thank you very much.
Okay.
Sure Brandon Yeah, I mean, as we think about that business. It's a portfolio of products all built off of the viable bone matrix platform.
So we currently have a number of partnerships in place across a variety of products of which the Medtronic and fiber. So it was 1 of our partners, obviously with the size and scope of Medtronic.
The large partnership and so of Medtronic makes the decision not to resume we would look to the backfill that through of signing additional partners and again, given the size and scope of Medtronic, who will take us probably a couple of partners to think about in terms of magnitude the.
The backfill that level of volume.
But again, we're as I mentioned, we're already in discussions with some partnerships for additional business and we'll continue to do so we have the opportunity to bring on additional products off that platform to sign these new partnerships and that's what we'll pursue going forward in the future.
Yeah.
Thank you.
I'm not showing any further questions on the Q.
I would now like to turn the call back over to Ron for closing remarks.
Great. Thank you yeah, just in closing of the Z O team remains focused on and excited about the range of opportunities that we have and I have the greatest confidence in our future.
So with that I want to thank you for your continued interest in New Zealand and have a great day.
Take care everybody.
This concludes today's conference call. Thank you for your participation you may now disconnect.
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