Q2 2021 Motus GI Holdings Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the modus GI Holdings incorporated second quarter, 2021 financial and operational update.
At this time all participants are in a listen only mode. There will be a presentation by the modus management team followed by a question and answer session.
I must advise you all that the conference today is being recorded.
I'd like to turn over the call to Garth Russell of Lifesize Advisors. Please go ahead, Sir Thank you operator, and thank you everyone for joining us for the motives July 2nd quarter 2021 update call today, representing the company are Tim Moran, Chief Executive Officer, and Andrew Taylor, Chief Financial Officer, and Mark Pomeranz.
President and Chief operating officer, and modus job.
Before turning the call over to management for their opening remarks, I would like to take a minute to remind you that this conference call and webcast will contain certain forward looking statements about the company.
These statements are subject to certain risks and uncertainties that could cause actual results to differ.
Please note that these forward looking statements reflect our opinions only as of the date of this call. We will not undertake any obligation to revise or publicly release. The results of any revisions to these forward looking statements in light of new information or future guidance.
Factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward looking statements are discussed in greater detail in our most recent filing on Form 10-K, and other periodic reports on Form 10-Q, and 8-K filed with the SEC.
I'd now like to turn the call over to Tim Moran.
Tim the floor is yours.
Thanks, Carl and good afternoon, everyone. Thank you for joining our call today.
I'm excited to share an update on our business through the second quarter of 2021.
I'll start by providing an overview of our commercial progress which continues to build each quarter.
I will then discuss each of our four value creation drivers, which include new product innovation.
Reimbursement.
Clinical data generation and strategic partnerships.
I'll, then ask Andrew to provide an overview of our financial performance for the quarter.
And at the end of our prepared remarks, we will open the call to take your questions.
I'm pleased to share that our commercial team continues to build positive momentum in the U S market as we convert more of our targeted hospitals into active pure view customers.
In the second quarter, we delivered revenue growth of 95% compared to the first quarter of 2021.
Notably this represents our fourth consecutive quarter of incremental revenue and procedure growth.
As a reminder, this momentum is being accomplished through a very lean commercial team that has remained laser focused on securing the support and commitment from prominent key opinion leaders at targeted U S hospitals.
Our growth reflects an ongoing recovery from the impact that COVID-19 had on our initial commercial launch for most of the last year.
As I've mentioned previously since the beginning of 2021 we have seen an increasingly stable environment among U S hospitals, including procedure volumes and access to Gi unit.
A big driver behind this quarter's success is our team's unyielding determination and perseverance as we create this exciting market.
In addition to initiating several important evaluations during the second quarter. We also closed a new customer agreement with Sinai Hospital, which is part of the life Bridge health system.
As the largest community hospital in Maryland, we are pleased to see them fully adopt the pure vu system, including the outright purchase of our capital equipment.
So I know, it's another example of our ability to showcase the value of the pure Vu system as we offer a comprehensive solution that addresses poor visualization during colonoscopy and upper Gi procedures.
Enhanced visualization can provide improved patient outcomes faster time to diagnosis and reduced length of stay.
Each of these critical benefits resonate well with the priorities of hospitals physicians and administrators.
We now have five major hospitals signed a 12 month committed volume agreements, which require minimum quarterly purchases of peer of your sleeves and return for the use of our capital equipment.
We are actively negotiating additional such agreements, which we anticipate will close over the next two quarters.
The value of these initial volume commitments typically ranges between 60 to $120000 of recurring disposable revenues annually.
As it relates to outright capital purchases. We are also currently negotiating additional deals that we expect can close in the second half of 2021.
While we are encouraged to see some positive movement on capital spending we believe our volume commitment agreements offer customers the flexibility needed to obtain the pure vu system immediately with the option to purchase their workstation once capital funding is released.
In addition, these volume commitment agreements offer several key long term benefits to motors G. I.
First they provide us with reasonably predictable recurring sleeve revenue as each quarter.
Next they typically provide for higher gross margins on our disposable sleeve.
Third from a marketing perspective, we believe these engagements to help us further cultivate awareness market acceptance customer relationships and utilization of our proprietary pure vu system. Among some of the leading hospitals and renown G is in the U S.
And finally these agreements have mutually agreed upon minimums that we expect to be achieved and potentially exceeded as we continue to train additional physicians and establish utilization protocols at these sites to.
To date, all committed customers have met or exceeded their quarterly requirements.
The sequential improvement we have reported each quarter gives us confidence that our focused commercial strategy is taking hold and we are setting the company up for significant long term success.
To support and maintain continued growth, we anticipate adding additional sales resources in the back half of 2021.
We began this effort in Q2 with the hire of a seasoned sales director who is now responsible for growing pure view revenues in the New York City Tri State area.
While we will remain diligent about spending we expect additional sales resources will have positive near term return on investment.
Now I'd like to shift gears to our four value creation drivers.
First let's discuss where we are with new product innovation.
In mid June we commenced our controlled market launch of the pure view upper Gi solution.
Our initial focus is on performing targeted evaluations that allow us to demonstrate clinical utility while also gaining real world procedural experience.
This is an exciting new market opportunity that further enhances the overall utility of the pure vu system in the Gi lab.
As a reminder, the upper G. I sleeve works off the same peer view capital equipment as our existing colonoscopy product and the procedures are performed by the same target physicians at the same target hospitals.
This new product is a natural extension of our existing commercial strategy.
We are in the initial stages of gaining valuable procedural learnings and feedback from key positions, which we believe will allow us to best position peer view for us in this new indication.
The early feedback has indicated that a key benefit that peer view provides during upper Gi procedures is our ability to enable constant visualization without disrupting the working channel of the Gastroscope.
Today without peer view the working channel is the only method for a physician to access the bleed source and moving between suction and irrigation and mechanical tools can be time consuming and burdensome.
We plan to continue to execute our controlled market launch during Q3, and we'll update you on our broader launch plans later this year.
I would also like to take this opportunity to announce a pending launch of our third generation of the pure Vu system, which is called pure view Evs.
This system has been underdevelopment for the last 12 months and we anticipate applying for five 10-K approval to the FDA by the end of this calendar year.
The peer view Evs system will provide enhancement to overall ease of use particularly related to rapid system setup, which we expect will take less than 90 seconds.
We've enhanced the sleeve design to offer even greater control and navigation for the physician and the system will support both upper and lower Gi capabilities.
Another key strategic benefit of the next generation system is we expect our overall cost of goods to be substantially lower.
This gives us even greater flexibility as we plan for our entrance into more price sensitive markets and segments, such as outpatient and international expansion.
With that said we plan to provide additional details about the E V S system during future calls and events.
I am pleased with our team's continued commitment to enhancing our offering and driving innovation as we leverage our first mover advantage.
Now, let's move to an update on reimbursement.
As discussed previously we have a multi pronged strategy to secure reimbursement of the pure vu system procedure by both private and public payers.
Over time, if we can secure reimbursement it would help to further accelerate our commercial expansion.
As you will recall in March 2021 we submitted a request for an ICD 10 code at the centers for Medicare and Medicaid services meeting.
On August 2nd 'twenty, 'twenty, one CMS granted the pure Vu system, a permanent ICD 10 code, which will commence on October one 2021.
Unfortunately, the purely system was not selected as part of the new technology add on payment for inpatient procedures.
You remember this was a fast tracked opportunity, which would have been a nice to have but as we previously stated gaining add on payment for peer view for hospital inpatient procedures was not a necessity as we believe we do not face reimbursement headwinds in the inpatient environment.
We will continue to execute our holistic reimbursement strategy and we'll keep you updated on our progress each quarter.
Moving to our third value creation driver the generation of new clinical data.
In June we announced the publication of an article presenting data from the reduced study in the peer reviewed journal B M C gastroenterology.
The important findings presented in the article in which we have continued to emphasize since data from the reduced study was first announced is the pure vu system, 97% clinical success rate.
We believe this overwhelming outcome clearly supports our claim that the pure vu system improved bowel preparation quality in hospitalized patients undergoing colonoscopy.
As we continue to drive commercial sales in hospitals. It is publications like this that help us educate the market on the potential for the pure vu system to enhance patient care, while also lowering costs for hospitals and payers if.
If you're interested in reading this peer reviewed article it can be found on our website motives G I dotcom.
Also during the second quarter, we announced the peer reviewed publication of new data from our company sponsored cost effectiveness and resource allocation analysis of the pure vu system on the outcomes of cost quality of life and avoidance of colorectal cancers as compared to the current standard of care for outpatient colonoscopy.
Skippy.
This data was published in the journal titled cost effectiveness and resource allocation.
We believe they're important and compelling findings outlined in this article that showed the use of the pure Vu system has the potential to generate lifetime savings compared to the current standard of care for outpatient colorectal cancer screening.
As a side note. We believe this new data can potentially be helpful. In our efforts to gain outpatient reimbursement for the pure Vu system.
In terms of active clinical studies, our investigator initiated study at the Cleveland Clinic continues to enroll patients. This.
This study is evaluating the clinical and economic benefit of using the pure vu system in patients with emergent lower Gi bleeding.
This study is designed to enroll at least 20 patients patients will not undergo standard bowel preparation as the physician will utilize just to tap water animas in conjunction with pure view, allowing for faster time to diagnosis compared to the current 24 to 36 hours typically required to complete.
Traditional bowel prep.
The outcomes we receive from this study could begin to challenge the current standard of care for critical lower Gi bleed patients.
In June we also announced that we have begun enrolling in outpatient study in Europe.
This study is evaluating the clinical outcomes in outpatients, who have had a history of poor bowel prep.
The study protocol uses peer view in combination with a low volume bowel prep and limited diet restrictions.
If successful this study could lead the way for our pure Vu system to change the management of patients who struggled to get an adequately prep the colon due to their age or medical condition.
The study will enroll approximately 44 patients across two sites in both the Netherlands and Germany.
The primary endpoint for this study is improvement of the bowel preparation from baseline to post procedure as assessed by the Boston bowel preparation scale.
Study will also look at key clinical endpoints related to the quality of the exam, including the detection of critical pathology in the colon.
Let me now turn to potential strategic partnerships.
We continue to advance our dialog with several potential strategic partners. Our focus is finding pathways to accelerate and expand our commercial efforts in the U S and in targeted regions outside the U S.
We are also discussing opportunities for enhancing our technology development with the aim of being able to unlock value for our shareholders.
As we continue to drive greater utilization of pure view in the U S market, we believe strategic options that fit our criteria and our actionable may become available for consideration.
Additionally, we are seeing new interest by strategics following our announcement of the launch of pure view for upper Gi procedures.
In summary, we believe we're making important commercial progress and have deployed a highly disciplined and focused approach to build the market and capitalize on the four value creation drivers each of which have the potential to greatly enhance the momentum and trajectory of our business in 2021 and beyond.
Finally, before turning the call over to Andrew I want to briefly mentioned on today's call. How excited we are to have Sanya Nelson joined our board of directors and as our chair of the audit Committee.
Donny is currently the Chief financial officer of an bricks and brings more than 25 years of financial and operational leadership expertise to our board.
We're fortunate to have her join us and pleased to have an additional accomplished executive joined the board of Motors G. I.
Andrew I will now turn the call over to you.
Thank you Jim and thank you everyone for joining us today.
We reported revenue for the second quarter 2021 of approximately $100000 as compared to $1000 for the same period last year.
As Tim mentioned this quarter also represented an almost doubling of reported revenues compared to the first quarter 2021.
For the three months ended June 32021, we reported a net loss of approximately $4.7 million or 10 cents per basic and diluted share compared to a net loss of $4.4 million or 15 cents per basic and diluted share for the same period last year.
During the second quarter net cash used in operating activities and for the purchase of fixed assets was $3.2 million as compared to $4.3 million for the same period of 2020 a.
A reduction of approximately 26% year over year.
At June 32021, we've reported $26.4 million in cash and cash equivalents. This balance included $8 million from our 2019 term loan with.
With Silicon Valley Bank.
In July 2021, we refinanced this loan and increased our credit facility by 50% up to $12 million through the execution of a new loan agreement with Cree of capital.
There are no financial or liquidity covenants associated with this credit facility.
Additional material terms related to this transaction can be found in the company's 8-K filed with the Securities and Exchange Commission.
Our current cash balance allows us to continue executing on our value creation drivers and is expected to meet our overall anticipated cash needs through 2022.
And with that I'll now turn the call back over to Tim.
Thanks, Andrew.
In closing we remain committed to continuing to build a strong foundation of loyal peer view supporters and capitalize on our first mover advantage as we build this large market.
We will continue to closely monitor the impact of the Covid variance on U S hospitals, but to date, we are encouraged by the rebound in Gi procedural volume in the U S as well as our access to hospitals and physicians, we intend to work with our customers to ensure access to our technology and expect to continue to ramp procedure volume.
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Now I'll ask the operator to open the call for your questions.
Thank you and ladies and gentlemen at this time it will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue you.
You May press the Star key followed by the number two if you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up the handset before pressing the star keys, one moment, please while we poll for questions.
Thank you. Our first question comes from Matthew O'brien with Piper Sandler. Please state your question.
Hi, everyone. This is.
Some run on for Matt. Thank you for taking the question.
I want to start off on the upper G. I based on the feedback you're hearing from physicians in your pilot cases, I think you had mentioned 20 to 25 sites previously do you expect a relatively rapid uptake of the product once you launch, especially in those five major.
Hospitals that are assigned to the customer agreements.
And then can we expect.
Any meaningful revenue contribution.
Possibly a layer.
Or should we be thinking of it as a Q1 'twenty 'twenty two event with a.
Robust acceleration throughout the year.
Great. Thank you. Thank you for your question I appreciate that so just let me clarify one point so from an upper GI perspective, as you mentioned correctly where were in our controlled market release were targeting 20 to 30 procedures in this time period to get feedback.
So procedural learnings real world feedback. So just wanted to clarify we do not have upper Gi and twenty-five sites today. However.
However, we do expect to complete that work over the next month or two.
And I think we'll be in a better position during the Q3 call to provide more detail in terms of how we see the broader launch plans going and you know timing of revenues and things like that I think it's premature right now it's it's really important that we continue to get these learnings under our belt, but what I will say is.
There's a lot of enthusiasm about this product the unmet need in terms of visualization. During these very critical upper Gi bleed procedures.
Something that physicians have really been clamoring for and some of the early feedback that we've seen.
Is pure view is providing them constant.
Constant visualization, so through our irrigation in our suction port.
Theyre getting constant visualization at the site of the bleed without us obstructing the working channel of the Gastroscope. So as I mentioned in my prepared remarks. The reason that so important is today they have to work through that working channel for everything so if they wanted to connective suction pump or an irrigation pump. They obviously can't then be using and Mccann.
Tool to break up a large clot, so they're constantly going back between different modalities through that that working channel with the use of peer review it opens up the channel for their tools and let them work consistently so we're excited but it's early and as I said, we will continue to provide more detail and most likely at the next quarterly update.
Okay.
Thank you for the clarification on that.
Your minimum sleep purchase agreement.
I think you had mentioned first year utilization was going to be roughly seven to 10 procedures per month in each of these accounts is that still the case or have you seen faster uptake.
So and that we're still you know we're still comfortable with that as an very early prediction of these accounts when they first get up and running and.
And for that as we typically have one or two key positions that have trialed. The product have supported us through the value analysis Committee approval and are active on day. One however, the focus of our sales organization and particularly over the last two quarters now that we've been back out with access to our accounts has been.
Driving new training and bringing more physicians on at these sites that have approved and are now purchasing a peer view. So I think you know seven to 10 is a good number to start but we absolutely expect these accounts to do well more than that over time and our earliest sites. What I will say is the sites that are.
Got converted in the first part of the year, we're starting to see that number tick up a you know each month and each quarter as we train more docs. So absolutely the way we're looking at it so driving you know, bringing on obviously new customers, but also driving deeper into our accounts if you will.
Okay got it and lastly, looking at gross margin. So the street, how do you model that roughly 21% for Q2, which you guys have handily be up 58% is that a run rate we should based off the the remainder of the year and how do you see that even.
All being as you.
You eventually launch the upper G. I saw that you and your next generation tier abuses them at higher volumes.
Sure. So what I'll say on that I don't want to get into specific gross margin guidance, but yes, you said the 58% this quarter.
There's still and I'll deem it you know there's still noise that comes into the to the gross margin number when you're in the process of doing you know a lot of evaluations as well because of the way.
GAAP rules have us account for evaluation product, but what I will tell you is I think what you see here. This quarter is actually still lower than where we expect to be over time, you know at the steady state in terms of our current Cogs and then certainly as we move forward to the next generation.
Does that help.
Yeah that does.
Thank you.
Thank you.
Thank you. Our next question comes from Jeffrey Cohen with Ladenburg Thalmann. Please state your question.
Well hard to imagine Mark how are you.
Hey, Jeff how are you.
I'm doing fine just a true from there and I think firstly could you talk us through a little bit about the commercial organization now so.
Is the focus of geography, and then walk us through how.
How that may advance or with the comeback.
A few quarters.
Sure Yeah, Jeff what I'll say is first of all you know coming into this quarter, we have three sales directors.
That is.
As the size that we've been running with since we resize. The organization you know in March and April of 'twenty 'twenty due to Covid.
They're currently.
You know as you would expect in some of the larger Metro areas, California, Texas. The Midwest and then we just brought on as I said in the prepared remarks. This quarter. We brought on a new director, that's covering kind of the northeast Greater New York City Tri State area.
So we've been going with the lean team and this team has done a.
Terrific job to date, but if if we just think back to the strategy that we kind of talked about upon the original launch of peer view, we talked about the first year being all about building the foundation getting validation from large sites getting kols onboard clinical data that supports our efficacy in an outcome that obviously gets that.
As we've discussed with Covid. So 2021 has really become the year to kind of finalize that work, but I think now we you know as we look at the opportunity as we get into the end of this year. You know, we believe that we start to lean into the commercial organization. So you know as I said, we're gonna we're gonna be very cautious obviously this COVID-19.
And you know is a very dynamic situation, even just in the last I would say four weeks or so you know I think most people saw the comments that were made in Texas, which is obviously concerning to here, but we believe that you know we're getting we're getting to that point of where we can start to really scale them to this opportunity I don't want to put specific numbers on it Jeff but.
You will see us add a.
A few people to the team before this year is out.
Got it.
Okay, Perfect and then secondly for us talk a little bit about I missed the actual number you are speaking about the the outpatient in Europe study and Tusa I understand was in Germany, how many patients or is that.
Or will it be and also could you talk about.
There is as far as other centers involved in the study or other studies in general Thank you.
Oh sure Yeah. So let me the answer on the European study, it's a $40. It's expected to be at 44 patient study and that will be between two centers one center in the Netherlands, one in Germany, I'll I'll ask Mark if he wants to provide any additional color on that study Mark I'll hand, it to you.
Yeah I think.
You hit it correctly, Tim was the 44 patients.
Is that a powered study against historical controls.
There's a population that has a history of inadequate.
We expect to get some nice statistics I mean, you've always loved when you get in those patient population.
Okay, and when might we expect that.
Yeah.
We're targeting completion of enrollment by the end of this year.
Okay, perfect I suppose for us thanks for taking the questions. Okay. Yeah. Thanks, Jeff.
Our next question comes from Steve Lichtman with Oppenheimer <unk> Company. Please state your question.
Thank you hi, guys.
You mentioned.
We are getting up to five minimum sleep purchases one capital purchase I know last quarter, you had a number of potential accounts that you were looking to do one of those two things.
Can you talk about how many accounts are evaluating them and then also currently and also during the quarter did you have.
Some that we're evaluating but decided not to go on either one of those paths or.
Oh yeah.
Yeah sure Steve We've you know listen as I said, we've taken a very focused approach.
I think we've talked about that I think we've been smart about how we have been utilizing the lean team that we have but what I'm encouraged to see as we we went a bit deeper this quarter. So we were able to get.
Several of these accounts committed.
As we mentioned in the prepared remarks to our quarterly volumes, we were able to get some capital movement with with Sinai. We have a handful I would say you know call. It between four and eight accounts that have either finished their evaluation and are now just pending a final approval from vac.
To move forward and or in an evaluation actively and then I would say we have kind of low double digits that are in the pipeline pending approval for evaluation that will occur. Obviously this year. So you know with the team the size that we have you know very very pleased with the number of accounts that they've been able to kind of move.
Through get completed and then you know get new ones started but as we look at the commercial organization as I said to the last question clearly the funnel and the opportunity far outweighs the size of the people that we have so I think that's why we start to think now about okay. You know scaling into this opportunity is gonna be.
Horton as we get into the end of this year and into the start of next year, particularly is as we talk about the launch of the next generation system, which you know I had mentioned today for the first time, the Evs system, which we think will be even more easily adopted due to some of the enhancements that we're putting into that system and we expect that to be in early 'twenty two.
<unk> ER launch if everything goes well with regulatory so that kind of all you know it comes together nicely I think for scaling the the commercial organization.
Great. Thanks, Tim and then just a second question.
On the strategic partnerships you mentioned, you've been talking about that for a couple quarters now I'm. Just wondering if you could characterize that a little bit more has there been movement such that.
We could see something in the near to medium term, obviously I don't expect any.
But or is it still sort of a wait and see is as you guys progress commercially in them and go from there just trying to get a better sense of.
What what kind of work is done kind of going on on that front generally.
Yeah. So it's a good question right and it's it's a hard one to provide too much detail with it. So I. Appreciate you you know kind of asking for just the high level I would deem these conversations as.
Very active and they continue to progress with several I think they they range from you know discussions around broad global relationships, which obviously could be interesting.
Two very specific geographic relationships, which you know also it might be a nice way for us to accelerate into.
Particularly you know O U S markets.
In a in a timeline that maybe you know quicker than we could do on our own.
Part of it though Steve is yes. The Covid setback you know obviously didn't allow us to get that first kind of year validation work done as I alluded to earlier. So I think now that we've we're showing this progress I mean I would put Q2 is like the cleanest quarter. We've had in terms of you know no holdups with with Covid related issues and the team.
It did well and it got a lot accomplished so I think we continue to do that and as we get towards the end of the year into the early part of 'twenty. Two I think that's probably a time line, where some things could become actionable whether or not they're right for us for the value you know that that they can generate for our shareholders. You know that of course always remains to be seen but that's that's.
The best I can give you in terms of you know my outlook on it.
Got it I appreciate the color Tim Thanks sure of course.
Thanks, Steve.
Thank you and just remind us ask a question press star one on your phone.
Our next question comes from E. Chen with H C. Wainwright. Please state your question.
Hi, This is Bob Allen dialing in for Aitken just few questions. So firstly a gen. Three is pretty intriguing. So I was wondering if you could kind of stay some differences between gen three versus gen. Two.
Sure, but a lot of nice to speak with you. So what I can say right now is you.
We've had this as part of our product development roadmap. So this is something that we've you know even when we launched our first gen. But we knew that over time there'd be we continue to iterate and drive the innovation listened to our customers get their feedback and continue to advance the platform as I mentioned earlier really.
The significant focus that we've done here has been around just continuing to make it easier and easier to use and I think that allows for broader adoption across the kind of Gi specialty so ease of use in terms of setting the device up I mentioned earlier, we expect that now to be down a sub 90.
Seconds to get set up in and utilize you know be able to alert load our sleeve onto a scope that has what can be refrigerated dirty scopes I'll say the physician starts the case realizes that the patient isn't clean they want to use peer view they could theoretically take that scope out lowered peer view and go right back in and use peer view and complete the case so some.
Really nice advancements as it relates to usability for the end user the physician and the staff, but also you know we set our sights out as we thought about eventual market entrants into you know very critical segments like outpatient or places outside of the U S where price sensitivity will become more important to have a.
The development that would reduce our Cogs. So we believe that this will do both and as I said earlier, we will provide you know further detailed updates as we get you know closer towards the end of this year.
Okay. That's really helpful and just some general question. So how many fishy physicians I've been trying to use fuel oil so far.
So we've we weave what I'll tell you, it's probably the more important.
Question. If if you will is the the growth of physicians that were having at our closed accounts. So we've been tracking that and what we've seen from the beginning of this year right. So in more of a stable sales environment and you know with access and ability to be in the in the accounts we've seen the team really.
Double the number of users that we had from January till the end of this past quarter. So we don't want to continue to you know give an update each quarter on every physician that we train them, but what we are seeing and I think is most important is that we're getting more and more traction in these signed accounts, which is going to over time translate into.
You know higher disposable recurring revenue each quarter for these for these sites.
Okay, that's pretty understandable yeah. So on our final question from me. So how do you expect the R&D costs you did one during the remainder of the year.
Let me just clarify did you ask about R&D cost.
Yes.
Okay sure I'll I'll, let Andrew take that question Blah blah.
Sure Jim Thanks.
Thanks for the question.
In general our P&L and our cash burn expectations for now the third and fourth quarter. So for the remainder of the are expected to be pretty stable you know certain activities that we have in place that we budgeted for them for our growth.
And the R&D and clinical area, but it'll be a pretty I'd say insignificant, maybe a few percentage points higher than what you're seeing in the first couple of quarters of the year.
Okay. Thanks, so much.
Thank you thanks for your questions.
Thank you there are no further questions at this time I'll turn it back to Mr. Tim Moran for closing remarks. Thank you.
Thank you Diego thanks, everyone for joining the call today, we will we will look forward to speaking to everybody next quarter and hope everybody stays safe and know that we are we are very focused on this commercial execution and very pleased with the with the performance that we're seeing and and hopeful that the <unk> co.
That situation.
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Thank you. This concludes today's conference all parties may disconnect have a great evening.