Q3 2021 Silk Road Medical Inc Earnings Call
Good day, and thank you for standing by welcome.
Medical 2021 third quarter.
At this time all participants are in a listen only mode.
After the Speakers' remarks, there will be a question and answer session. Please be advised that today's conference is being recorded I would now.
I'd like to hand, the conference over to your first speaker today, maybe used to bike Investor Relations. Please go ahead.
Thank you and thank you all for joining today's call. Joining me are Erica Rogers, Chief Executive Officer, and Lucas Buchanan, Chief Financial Officer, and Chief Operating Officer earlier today <unk> Medical released financial results for the three months ended September 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 relate to expectations or predictions of future events.
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 physician training and adoption growth in our organization and reimbursement market opportunity commercial and international.
Expansion label expansion and product pipeline development 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 accordingly.
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 quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August six 2021.
This conference call contains time sensitive information and is accurate only as of the live broadcast today November nine 2021 Silk road medical disclaims any intention or obligation except as required by law to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.
That I will turn the call over to Erica Rogers Chief Executive Officer.
Thank you Marisa good afternoon, and thank you all for joining us.
I would like to start by acknowledging the immense efforts of the silk road team and our physician partners as we continue driving adoption of key car forward against the headwinds of the COVID-19 pandemic.
Third quarter was a difficult period for the U S Hospital system, and specifically for elective inpatient procedures like T car.
As we signaled in mid September the COVID-19, Delta variant drove capacity constraints staffing shortages and overall disruption and a significant percentage of hospitals across our sales regions.
Despite these challenges we recognized $24 $7 million in revenue for the quarter, reflecting 23% year over year growth.
The pandemic and its consequences have created a more complex environment and a greater impact to our business than we had expected back in July.
Which carried over from Q3 into Q4.
As a result of these dynamics, we are revising our 2021 revenue guidance to a range of $99 million to $102 million.
Lucas will discuss our full results and provide more commentary on our financial outlook shortly.
As we look at our business we.
We are confident that the headwinds we have been facing are overwhelmingly pandemic related and in our view transient.
In regions, where vaccination rates are high and hospitals have capacity patients are presenting and we are executing on our strategy.
In fact, despite COVID-19 hospitalization soaring during the recent Delta wave. The total number of physicians performing a T car in Q3 was in line with Q2.
Even in the hardest hit areas of the country trained physicians continued to perform T car, albeit fewer procedures.
Our regional utilization data also allows us to analyze the relationship between T car procedures and Covid hospitalizations across specific parts of the country.
This analysis shows a stark contrast between the rate of procedures in less impacted versus harder hit regions. During the third quarter for example.
In southern and mid Western regions, both heavily impacted by the Delta variant procedures per physician sell roughly 13% in Q3 versus Q2.
In the northeast mid Atlantic and western regions areas with higher vaccination rates and fewer hospitalizations.
Procedures per physician grew roughly 10%.
In totality. This analysis offers an encouraging view of the performance of our business and the prospects for future growth as the pandemic wanes.
On our last call, we said that our business was back on offense and today, we remain just as excited about our underlying opportunity for growth and penetration over the coming year. As we did three months ago. We are hopeful for a future in which COVID-19 is endemic and managed without this.
Severe spikes in hospitalizations that we've seen over the last 18 months.
As of now and as we have throughout the pandemic, we are investing confidently in the people and programs that will drive our growth in 2022 and beyond we remain as committed as ever to establishing <unk> as the new standard of care and carotid artery disease with that.
Our number one strategic priority for 2021 is U S commercial execution.
Today, we are pleased to announce that we are on track to exceed our goal of training at least 200, new physicians by the end of the year. We are also on track to exceed our territory expansion target of at least 50 sales territories by the end of the year.
Importantly, as measured by time from training procedures per physician continues to grow overall and across each utilization quartile. Despite continued growth in the denominator of trained physicians.
This remains true even against the pandemic dampening effects on Corrado diagnoses and procedures and the overall health care system.
We are actively building relationships across physicians and hospitals to bring to fruition. The long term value of CCAR a value unshaken by Covid and we are reducing the risk of stroke and its devastating impact for patients every single day.
We remain well positioned to increase our procedural share versus <unk> given.
Expansion of our field team initiatives to drive physicians up the adoption curve physician training programs and the continually growing base of clinical evidence for T car.
Moving on to our second strategic priority for the year preparing for standard surgical risk expansion.
At the 2021 vascular annual meeting in August and independent propensity matched analysis and over 20000 standard surgical risk patients illustrated equivalent risk, a perioperative stroke death, or <unk>, plus ipsilateral stroke through one year in <unk> versus <unk>.
Car with cranial nerve injury risk significantly reduced with T car.
Conclusions of the study were clearly outlines key car should be expanded for use in standard surgical risk patients.
The study affirms what we already understand itself road safely preventing stroke delivering benefits from a less invasive approach is possible across a broad range of patient anatomies and disease morphologies.
<unk> clinical and patient satisfaction benefits paired with its proven efficiencies over CA give us confidence in driving adoption and advancing our impact on the lives of patients at risk for stroke due to carotid artery disease over the long term.
Importantly, we are making progress towards receiving FDA approval to expand indications for <unk> into the standard surgical risk patient population.
In October the FDA requested that we provide them with additional data we have since submitted that additional information as an amendment and we believe that we are still on track to receive an FDA decision by the second quarter of 2022.
Our teams and the physician community remain enthusiastic about the opportunity for standard surgical risk label expansion, bringing T car to a level playing field with CA and we continue to prepare for commercial launch.
This includes planning for our post market study engaging with CMS on reimbursement coverage supply chain preparation and augmenting our training and marketing programs and materials.
Regarding our additional long term growth drivers.
We continue to make progress on objectives to introduce new and improved T car products expand into international markets, and innovate, new Trans Colorado therapies, and neurovascular and carotid disease States.
Cardiac disease States excuse me.
For example, we are active in site initiation processes for our neuro protection in Trans carotid Embolectomy me or night, one feasibility study.
Our R&D head count programs and capabilities continue to grow.
We remain committed to extending and deepening our significant lead in developing the T car market in the U S with numerous product and clinical initiatives.
While working to unlock the five $1 billion Tam associated with exporting CCAR globally.
We expect to provide further updates on many of these initiatives on our future earnings calls.
In closing.
We were surprised by the speed and the severity with which the Delta variant impacted the U S Hospital system in Q3.
And we acknowledge that our second half revenue results will reflect the challenges in our operating environment.
We are encouraged by the fundamentals of our business as the environment begins to clear.
As we sit here today, we are seeing early signs of improvement, which we continue to closely monitor we also intend to remain transparent regarding the ongoing pandemic and its impact to our expectations.
We are incredibly proud of silk road's response to the challenges posed by Covid and our excitement for the opportunity to re accelerate into 2022 remains unhindered most.
Most importantly, our dedication to the long term value of T car for patients and hospitals alike remains stronger than ever.
With that I will now turn the call over to Lucas Buchanan, our Chief Financial Officer, and Chief operating Officer.
Thank you Erica revenue for the three months ended September 32021 was $24 7 million or 23% increase from $20 1 million in the same period of the prior year.
The number of <unk> procedures in the quarter was just shy of 3400 <unk>.
20% increase from the same period of the prior year.
Year over year growth was driven by increased adoption of <unk> across an expanded base of hospital accounts trained physicians and active sales territories.
Despite the more constrained environment due to the Delta variant impact in the third quarter of 2021 as compared to the same period of 2020.
Gross margin for the third quarter of 2021 was 75% compared to 73% in the third quarter of the prior year.
Gross margin in the prior year period included unfavorable production variances as a result of temporarily idle manufacturing operations and lower than anticipated demand due to COVID-19.
Total operating expenses for the third quarter of 2021 were $31 9 million or 33% increase from $23 9 million in the third quarter of 2020.
R&D expenses for the third quarter of 2021 were $6 9 million compared to $4 7 million in the third quarter of 2020.
The increase in R&D expenses was driven by growth in personnel and investment in new and ongoing R&D programs.
Sales general and administrative expenses for the third quarter of 2021 or $25 million compared to $19 2 million in the third quarter of 2020.
The increase was due to the continued expansion of our sales team and commercial efforts and general corporate and other costs associated with operating as a public company.
Net loss for the third quarter was $13 9 million equating to a loss of <unk> 40 per share as compared to a net loss of $10 3 million or a loss of <unk> 31 per share for the same period of the prior year.
We ended the quarter with $122 $8 million of cash cash equivalents and short term investments.
As Eric mentioned, our updated revenue expectations for 2021 are in the range of <unk> $99 million to $102 million.
Although U S. Covid hospitalizations have been steadily declining since early September with Delta wave is proceeding more slowly than the late 2020 to early 'twenty one winter wave.
Today, we are encouraged that COVID-19, hospitalizations and the rate of community spread is quite low and some of the regions of the country that were the hardest hit in Q3.
But there are still almost 47000 patients hospitalized with COVID-19 across the country with.
With hospitalizations still rising in 12 states.
Cases still rising in 23 states.
Alta continues to move.
Staffing issues remain as frontline workers seek higher paying jobs and feelings of burnout persist.
These phenomena in turn drive competition, among physicians and therapies for scarce or time and staffed inpatient beds.
All of these factors inform our revised guidance and it goes without saying there is continued uncertainty around the future course of the pandemic and patient behavior.
All said, we are holding our own and continuing to expand our presence in this environment.
As a reminder, our 2021 revenue guidance does not assume any contribution from our standard surgical risk label expansion.
At this point I'd like to turn the call back to Erica for closing comments. Thank you Lucas.
We're very pleased with our strong year to date performance. Despite the headwinds associated with the Delta variance and we are confident that silk road remains well positioned for strong growth into 2022 and beyond.
Our teams remain dedicated to meaningfully impacting both stroke prevention and acute stroke treatment and we know that our impact will continue to grow as the pandemic disruption subsides.
And speaking of our team I want to highlight our recent in person National sales meeting, which we held in September after multiple delays.
This year's meeting carried more meaning than prior years with our people, bringing an unparalleled enthusiasm to our three day event. Following a very long period of pandemic driven separation. It was not only an opportunity to organize and emphasize our goals around physician adoption. It was also an opportunity.
To unify a team fighting for a better standard of care the energy and sense of purpose was palpable across the organization and emphasized that human capital is silk road's strongest asset.
In addition, just two weeks ago, our teams honored world stroke day, taking pride in the efforts of silk road, and improving awareness and more importantly, preventing stroke and it's horrible ramifications for patients and their families.
We are confident in the continued growth and development of our commercial team as we recognize the enormous market potential for T car and the associated career opportunities for those who seek to make a difference.
As we move towards the end of 2021, we are encouraged by early signs of recovery from Delta variant and more importantly, silk road's long term value proposition.
We continue in our persistence to improve patient outcomes and remain committed to new therapies across new indications in the years ahead.
With that we will now open it up to questions joining me and Lucas Buchanan today for the question and answer portion of the call.
He is our chief commercial officer.
Andy Davis.
Operator.
As a reminder to ask a question you will need to press star one on your telephone to be during a question question Pam.
Our first question comes from the line of Robbie Marcus from Jpmorgan.
Yeah.
Hi, This is actually Lili on for Robbie Thanks for taking the question.
I know, it's still early but I was hoping you could share. Some early thoughts on 2022 do you think where the street is sitting right now at $145 million is a reasonable place to be right now for next year any color you could share there would be helpful. Thanks.
Hi, Larry I'll take that one we're not providing 2022 guidance today I think the the takeaway is we continue as we have throughout the pandemic to invest in the key inputs of our business, namely.
Opening new hospital accounts training physicians and expanding our sales team and that all <unk>.
<unk> future growth and so we provided some color on our on our progress on those fronts that we think set us up well for the future.
Got it that's fair.
And just a quick follow up on standard risk is there any way you can quantify to what extent you've been treating the integration risk patients right now before formally getting it on label.
15% to 25% of procedures.
Thanks.
Hi, Larry I'll take that one.
We have not provided any quantification I think this question is probably borne out of the fact that there were a fair number of patients presented in some data at the vascular annual meeting back in August and I think the way to explain that is that the definition. The authors used for standard surgical risk was slightly.
Different than other definitions of standard risk and namely in the age cut off which provided a big area of overlap in patients and so the best way to think about it really is that there is no sort of black and white in the eyes of a physician on standard surgical risk.
Versus high risk there are degrees of risk in the in the interpretation of physicians.
Clearly the company sticks to our approved and labeled indication, which is high surgical risk.
Got it that's helpful. Thanks again.
Our next question comes from July of Rick Wise from Stifel.
Hi, good afternoon to you both.
Erica vector.
Hard not to start with Covid again.
You said very specifically you are seeing early signs of improvement.
I want to make sure I really understood exactly what youre, saying.
You are saying.
We started the fourth quarter.
Last week for the last few weeks.
And.
You gave us a beautiful breakdown by region.
And tears and everything but.
Is it retail the board how.
How do we think about that statement.
Reflecting on the new guidance.
For the fourth quarter, especially.
Yeah, Let me, let me take part of that for you Rick and thanks for joining US today, So I mean really simply put.
<unk> is right in the crosshairs of the Delta variant and we saw.
Real impact in certain regions that are less vaccinated that led to obviously higher hospitalizations I do want to remind everyone that we are a U S only business.
It is in patient right and majority elective when you think about the mix of of asymptomatic versus symptomatic and so we were right in those cross hairs of the hardest hit areas of the Delta variant, which turned out to be the south and the Midwest as we said in our prepared remarks.
As it relates to the quarter.
I think it's safe to say that the recovery from Delta variant has been slower than what we saw in the winter wave the sort of bounce back that we saw coming out of the first quarter.
It has not been like that with the Delta variant and as we said in our prepared remarks, it even spilled over into October into this quarter now sitting here today in November we like what we're seeing in the past really.
You.
A few parts of the early part of November.
But I think it's safe to say that delta extended into October.
Yes makes sense.
I didn't know what Lucas you wanted to say something.
Go ahead, yes, I can I can add a little color I mean again kind of as Covid hospitalizations go so does CCAR procedures for better or for worse, depending on whether the hospitalizations are going up or going down and so with that the monthly procedure volume has improved.
Proved.
From.
September over August and October over September and as Erik I mentioned November is trending well so it kind of matches that curve so to say.
Gotcha.
Turning back to the topic of label expansion.
I mean, it's encouraging obviously.
FDA asked you were able to submit that sounds great but.
Unless I'm misremembering.
Erika I think your prior public statements were.
You were hoping for in late 'twenty, one early 'twenty, two and if I heard you correctly, you are saying Q2, 'twenty one is that understandable conservatism given everything that's happening in the world.
Is it that the request for data is still slow things down.
How do we think about that.
My memory is correct here.
Yeah, No I mean, it's simple we're still we are still within the timing expectation that we set forth.
We're sitting here on November 9th obviously.
We're running out of.
At a days in the quarter, but the realm of options is still what we stated in the beginning.
Okay. So no change there great.
Okay, and maybe last for me.
And maybe this is more for Lucas or whoever.
The.
Unusually high.
SG&A spend this quarter.
I think it's the highest dollar number I've seen $25 million or so.
Up sequentially, a few million dollars and you sort of said it right upfront.
It's in the press release, you are investing in multiple ways expansion teams commercial efforts et cetera.
Maybe you can help us understand.
Where that unusual spend is getting ready for standard risk.
International Preparedness is this.
Opening new hospital help us understand and where do we go from here.
Yes.
I think thats quite simple as well Rick.
Really comes down to primarily the U S commercial effort in investing in the expansion.
In territories, which we've said all along that our goal for this year was to be in excess of 50 territories and Eric had mentioned, we expect to exceed that on our way to roughly 75 by the end of next year, which is really the coverage model that we think.
Really covers the bulk of the market in terms of the hospitals and docs that we want to train and market to them and drive their adoption curve. So some of it is timing with respect to.
It's not a linear growth pattern in terms of the commercial head count.
In Q4 was a little heavier than prior quarters, and I think again the key key takeaway here is we continue to invest confidently.
Because the fundamentals of the business.
Our strong when you when you strip out the Covid impacts.
Yes.
And <unk>.
Truly congratulations on a very solid quarter and I know, it's a challenging time, but so it's great to see it. Thank you.
Thank you Rick.
Our next question comes from the line of Adam <unk> from Piper Sandler.
Hey, guys. Appreciate you taking the questions here and congrats on the progress.
Wanted to start on standard surgical risk and maybe just ask for.
I'm kind of.
New updates or line of thinking around reimbursement and then post market approval study I think you've touched on both of those briefly in the prepared remarks, but.
I'm wondering if the expectation is that reimbursement will come in tandem with FDA approval. Our subsequent too and then was wondering if you can kind of flush out.
Approvals are labelled label expansions, which is they typically are accompanied with a post market requirement Postmarket study requirement and so we're planning as such which means that we're doing the work of figuring out what a protocol might look like what what the site's might look like who the pis might be all of those.
Kinds of things just getting in the ready position.
Got it that's helpful. Erica Thanks for that and then for the follow up just switching over to the international.
Go to market initiatives that.
You are in progress with.
Just any anything more that you can share on China, and Japan, the progress that you're making.
In those geographies and potential timelines and curious if there's updates on things like reimbursement our infrastructure.
And I guess, the big question I'm really just trying to better understand as if we should think about 2023 is a reasonable base case for international revenue contribution if it's 24 et cetera. So if you could help Orient us there that would be great. Thanks, so much.
Yes, yes, we continue to make progress in the quarter on both China and Japan right now, it's really all about the regulatory effort, which does dovetail with the coverage and reimbursement efforts in those countries as well so they're not really ultra distinct processes all of it.
As in motion right now and we did make good progress in the quarter I think we also talked about on our last call that we've been engaging with potential commercial partners, which is to say that.
We're likely to partner with somebody already in those geographies versus kind of propping up our own direct organization in either of those two countries and those conversations have also moved forward in.
In the quarter.
As it relates to timing of commercialization.
And we just haven't given any specifics there yet I know that's not a super satisfactory answer, but when we have more meat on the bones on precise regulatory.
Outcomes I think at that point, we can begin to talk about timing.
Okay understood understates for taking my questions.
Yeah.
Yeah.
Our next question comes from the line of senior policies.
Larry.
Hi, good afternoon Guy. Thanks, so much for taking the question.
One follow up question on that on that data filing for undergrad, Erica if you could give any color on sort of what the new data update might have been that you filed or how to think about is this an entirely new data set is it just incremental data or another cut of the data that you already filed and then I have one follow up.
On the quarterly results.
Sure Danielle hi, thanks, so much for joining us.
So.
Typical of PMA is there's been a lot of back and forth with the FDA kind of all along even prior to.
The submission itself and since the submission and so we got a question from FDA and upon clarifying what that question meant.
We basically did a kind of subset analysis of existing data is the way to think about it.
Okay got it that's helpful and then as it relates to the corner I don't know if you guys.
Even track it this way [laughter] excuse me even track it this way, but the Covid is there a way to quantify you gave some numbers that were very helpful that like growth in regions that weren't significantly impacted by corvette, but can you quantify like a dollar value from COVID-19 and if not maybe even some color on sort of where we are in the mall for all funnel if you have visibility.
And to that.
Sort of cancel how many procedures that are not.
Asymptomatic have been cancelled anything to get some color on sort of what the impact was would be super helpful.
Thank you guys.
Yeah, Let me, let me take the first half of that and I'll I'll pass it over to Andy for the second half.
The one thing Erica mentioned is that.
Disproportionate share of our procedures and therefore revenue comes from states and regions, where cardiovascular disease.
Risk factors are high and disease burden is high which also correlates with.
Area of the country that are that are less vaccinated and have higher hospitalization rates. So that's part of it again.
We did an analysis year to date.
Looking regression analysis looking at.
Coveted hospitalizations as the input nationally and Teacart procedures as the output. It's incredibly statistically significant explains most of the variation and procedures and so again that gives us confidence coupled with the data from from less hit regions and the fundamentals there that.
This is <unk>.
At least transient with the current aspects of the pandemic, we'll see we'll see what the future holds obviously, we are all hopeful for an endemic.
Management and new.
New Antivirals and more vaccination and kids getting vaccinated and all those things into 2022, but we're also.
Less and less the business of predicting worked over it goes both sort of turn it over to empty for the other half of the question.
Sure I'll address the funnel impact on the patient pipeline and we remain very optimistic that patient behavior is continuing to improve as the COVID-19 built a variant lifts, they're going back to the doctors are being diagnosed are being put into the queue to be treated so we've seen.
Dramatic dramatic increase in that behaviour, which is good and that's in the recent weeks.
More importantly, as the Delta variant really hit us throughout the August September October timeframe, we do to our best ability track patients that were in the queue or procedures are being cancelled and or.
Delayed so we're working very closely with our physicians too.
To find those patients and get them back into the queue to be treated so we monitor and measure that very closely. So we feel like we're gonna be able to capture a fair amount of those patients.
We're on the sidelines.
The hospitalizations and capacity really impacted our ability to treat them. So we feel we feel optimistic the fundamentals are still intact.
And I'm bullish on on.
The days ahead.
Thanks for the color.
Thanks Danielle.
Our next question comes from the line until English from CD.
Good afternoon, and can you hear me okay.
Yes, we can hi, Joanne thanks for joining us.
Hi, Thank you for taking the question I'm curious on your last question have.
Have you started to think about how the backlog is building so that when the.
The physicians and the patients sort of feel more comfortable getting back into the operating room. They can do so.
Yeah, I think I think there is a two part of the answer to that Joanne I mean, as Andrew just said.
The business of healthcare is starting to return again this.
This is the second go round of of recovery. This year as you know, but it is starting to return patients are back in the funnel in these hard hit regions that we've been describing.
So that's.
A very positive trend here I think the other thing that we have to talk about out loud is this a staffing shortage issue, which we mentioned in our prepared remarks. It is very real.
<unk> and his team are experiencing this everyday to the extent that we're doing procedures on the weekends because they can't get them scheduled during the week and so what that has created is this competitive environment for O R space and people and staffed beds regular hospital beds.
And ICU beds alike.
And so all of these elective type procedures, even the urgent elective which is the category that we're in.
Are fighting for resources quite frankly in some of these very hard hit areas and in fact.
There is an anecdote that we just heard the other day that the National Guard has been called into the Pacific Northwest to help staff hospitals.
So it is still quite challenging from a staffing perspective.
Yeah.
I'm, sorry, I'm sorry go ahead.
Go ahead.
I was just going to add I was going to add that it is a really interesting conundrum, because we had many many days and months, where there weren't enough beds to treat patients now there are enough beds, but not enough people to support the patient flow. So it's one problem.
Fixed and another problem.
Rears, its ugly head, but we're working through it.
Thank you I was just looking for if there was a way to quantify the backlog that's building.
And that may not be and I was just curious about that.
Well in prior periods Joanne the backlog cleared quite quickly but in prior periods, we weren't dealing with as much of a staffing issue right.
It's a little bit harder to say as we sit here today obviously.
The the wave itself is receding slightly more slowly and there's there's different variables.
Play but.
Again in prior times, the backlog clear quite quickly because these patients.
Are at risk for stroke and once the decision has been made to treat that's not that's not made lightly as we've always talked about so they do want to get these patients.
Treated as soon as they can there is some yield loss to patients that don't come back for whatever reason, but as Andy said the teams working hard to help make sure that.
Doing everything we can to bring patients back.
Ah clarification helpful. Thank you.
My second question really has to do with.
The timing of some of the other efforts that you've failed.
Outside of Tikal should we be looking for announcements like in the coming quarters or at least maybe in 2022.
Yeah, I think some of the things that we talked about in the prepared remarks. For example, the night one study the neuro protection in Trans carotid Embolectomy study, we're making good progress on site initiations and getting those.
It's ready to enroll.
So we're hopeful that there'll be some.
Further discussion about that trial in future earnings calls coming up.
Terrific. Thank you so much for taking my question.
Thanks Joanne.
That concludes the Q&A session I will now turn the call over to Erika Rogers for closing remarks.
Thank you all for your time and attention today.
Today's conference call has now concluded. Thank you you may know disconnected.
[music].
[music].
[music].