Q3 2021 Avinger Inc Earnings Call
Okay.
Greetings and welcome to Avengers, 2021 third quarter Conference call.
At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.
Please press star one if you wish to enter the queue to ask your question.
This conference is being recorded.
It is now my pleasure to introduce Matt Kreps, managing director at Darrow Associates Investor Relations. Mr. Kreps, you may begin.
Thank you Paul and thank you all for joining and participating in today's call.
I'd like to welcome you to <unk> third quarter 2021 conference call joining us today are <unk> CEO, Jeff Solecki, Chief Financial Officer, Mark Weinstein.
Earlier today <unk> released financial results for the third quarter ended September 32021.
Copy of the release is posted on you haven't your website under Investor Relations.
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 1095.
Any statements contained in this call that are not statements of historical fact should be deemed to be forward looking statements.
All forward looking statements, including without limitation, our future financial expectations 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, you should not place undue reliance on these statements for a list and description of the risks and uncertainties associated with our business. Please see our Form 10-K, and 10-Q filings with the Securities and Exchange Commission.
<unk> 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.
And with that I'd like to now turn the call over to Jeff.
Thank you Matt Good afternoon, and thank you all for joining us on this veterans day, we wish our best and give our thanks to any military veterans listening to our call. This afternoon.
During the third quarter, we took important steps to advance our strategic initiatives in several key areas early in the quarter, we announced the submission of a five 10-K application to expand the clinical indication for Penn tariffs to including instant restenosis claim based upon the positive clinical data generated in our insight.
<unk> clinical trial.
In August we filed a five 10-K submission for our next generation Lightbox three imaging console.
Throughout the quarter, we made significant advancements in the development of two new catheter line extensions for our peripheral product portfolio.
As we explore opportunities to extend our technology platform into new therapeutic areas. We've also initiated a formal development program for the first ever image guided CTO crossing catheter for the treatment of coronary artery disease, which we believe could be a transformational opportunity for our company.
While we're pleased with the progress we made in these important strategic areas. The third quarter was challenging as hospitals across the country reduced access and limited procedures due to a surge in COVID-19 cases related to the Delta variant the impact of these restrictions along with hospital staffing shortages was particularly strong in hospital accounts in the.
Southern U S. A key market area for us.
Even with these challenges we were able to deliver modest revenue growth in the third quarter compared to the prior year quarter. Our revenue decline from the second quarter of this year, which had minimal impact from COVID-19 restrictions.
There was some positive notes in the third quarter, including the opening of eight new luma vascular accounts underscoring the appeal of our value proposition to new users.
We've seen this pattern before as the market pulled back in response to the original surge of COVID-19 infection. In 2020, followed by a recovery in case volumes that propelled us to rapid growth and record results in subsequent quarters.
While we continue to feel the effect of the Covid related restrictions and hospital staffing shortages in the fourth quarter. We believe these limitations will be transient in that case activity at hospitals will increase as the situation improves in the coming quarters.
<unk> Terrace, Nextgen pentair, as SVP, and CTO crossing devices, including Tigereye fulfill an important need in the market and there is clear demand for our highly differentiated products.
Launching three new innovative devices over the past three years has enabled us to make inroads into new accounts and secure a greater share of cases at existing user sites, even during the pandemic driven challenges for hospital access.
We believe our two newest five 10-K filings will build upon that success and provide the opportunity to accelerate adoption of our technologies in the future.
In July we announced the filing of a five 10-K submission to expand our U S label for Kent tariffs to include the treatment of instant restenosis or ISR.
With 200000 stents deployed in the lower extremity arteries annually and a high propensity for restenosis over a two to three year timeframe.
<unk> represents a large and underserved market that will continue to grow as more stents are placed each year.
We believe Penn terrorists provides a significant and exciting competitive advantage in ISR, combining the ability to visualize and direct treatment, while avoiding the stent struts advantages other devices simply cannot offer for these challenging cases.
Our five 10-K submission for the treatment of ISR and supported by positive clinical data from the insight trial, which was designed to evaluate the safety and effectiveness of pen therapy for treating in stent restenosis and the lower extremity arteries.
Insight is a multicenter prospective single arm trial that was conducted at 17 institutions with 97 subjects enrolled.
In October Dr. John George a leading interventional cardiologist and Endovascular medicine specialist at the University of Pennsylvania Health system presented clinical data from the insight study at the vascular interventional advances or Veeva com principle in Las Vegas.
Key outcomes presented from the trial included 82% luminal gain which is the increase in the channel for blood flow following the procedure.
93% of patients were free from target lesion, revascularization or <unk>, which is an indication of restenosis at six months post procedure and 89% of patients were free from TL or at 12 months. Both results are significantly better than those achieved by laser atherectomy in the X sight.
<unk> trial Dr.
Dr. George made particular note of the extremely high 12 months freedom from TMR delivered by Pam Terrace in the insight study and the stability of this endpoint between six and 12 months, indicating a long lasting and durable outcome.
97% of subjects were free of device related major adverse events at 30 days, indicating the safety of the procedure.
And there were no amputations at six and 12 months post procedure.
<unk> ankle brachial index or Abi at six months with 0.96 or 39% improvement from our baseline of <unk> six nine pre procedure.
And there was a 71% improvement in Rutherford class a measurement of disease severity at six months with 77% of subjects at Rutherford class zero or one.
We are very pleased with this data and excited about what our proprietary system can offer to patients suffering from ISR if approved for the expanded clinical indication.
Our second five 10-K submission announced in the third quarter is for our next generation Lightbox III imaging console, which we believe represents a major leap forward for our platform. We filed this five 10-K in August and hope to receive U S. Pre marketing clearance by the end of this year and.
In addition, we've taken the steps required to receive CE, marking for the Lightbox III. So that we can market the new console in Europe and other CE Mark countries, we expect to receive CE, marking this quarter and pending approval plan to conduct our first cases with the Lightbox III in Germany prior to the end of the year.
The lightbox breeds dramatically reduced size and weight provides for increased portability and seamless integration into the Cath lab environment.
The Lightbox III is designed to fit into a case similar in size to a carry on suitcase and weighs less than 20 pounds, a 90% reduction compared to our current console.
The new Lightbox III also has improved economics, reducing cost by as much as 50%.
In addition to the size and cost improvements the lightbox three incorporates enhanced capabilities, including an advanced solid state laser a more powerful computing platform and a redesigned software system with highly intuitive user interface, which is designed to streamline workflows for practitioners and support increased utilization of.
Our image guided devices.
We expect this new platform to accelerate the speed and efficiency of new account acquisition as well as provide the opportunity to support new catheter capabilities in the future for both potential peripheral and coronary applications.
In addition to these recent 500 10-K filings, we are making excellent progress on the development of two additional new catheter line extensions for our peripheral product portfolio.
As we demonstrated with our <unk> SV in Tigereye launches the introduction of new products to expand our addressable market and bring new capabilities to our platform has a galvanizing effect on growing our business.
Our first new product in development as a line extension of our Tigereye CTO crossing catheter for the treatment of fully blocked arteries.
This new device has a spinning out or chip for tough capstone calcium and advanced shaft design push ability and torque response in a challenging environment and a three <unk> system to facilitate consistent image interpretation across our platform.
Our second new catheter product in development as an extension of the <unk> family of image guided atherectomy devices designed to provide a more streamlined approach for physicians when treating P E D.
This new product is seven French sheath combative compatible and is designed to expand our capabilities for the treatment of larger vessels three to seven millimeters in diameter.
It utilizes a proprietary design for blackout position without the need for a balloon and is designed to operate at higher rotational speeds and challenging plaque. This new pentair as line extension also adds rotational control for efficient Guidewire management and the modified plaque management system for tissue packing and removal.
We're excited about these two new devices, which have the potential to expand our product line to a wider group of physicians and streamline procedural efficiency, we expect to complete development for both devices over the next few months and file for regulatory clearance in the U S and CE Mark countries in the first half of 2022.
All goes according to plan this will provide the opportunity for us to receive pre marketing clearance and launch both devices into the U S and international markets next year.
While we've continued to make important advances in our peripheral portfolio expanding our technology to new markets is critical to our long term growth opportunities. Our first foray into the coronary artery disease market in our initial area of focus is to extend our proprietary image guided platform to crossing CTO.
In the coronary arteries on a less invasive percutaneous basis.
We believe this could be a transformational opportunity for adventure that would significantly increase the addressable market for our products and change the standard of care in a clinically challenging and largely underserved market.
It's estimated that approximately 50000 CTO PCI procedures are performed in the U S. Each year.
While the number of hospital centers performing these procedures are growing CTO PCI crossing continues to be a highly complex and challenging procedure, requiring specialized and demanding technique with a steep learning curve the use of multiple devices and significant time under fluoroscopy, which results in high X Ray radio.
Asian exposure and contrast burden.
In addition, an estimated 200000 plus highly invasive coronary artery bypass grafting or cabbage surgeries are performed in the U S annually with estimates of up to 30% of these procedures related to the treatment of coronary CTO of <unk>.
This creates a sizable and growing market that we believe is right for expansion with proprietary new tools that would make a percutaneous approach more accessible and reduce the need for extended time under fluoroscopy radiation.
Hi, reimbursement of 10% to $16000 per procedure is already in place for CTO P. C. I in the U S. In addition, we anticipate that our OTT guided catheters with their high resolution imaging and anticipated diagnostic and measurement capabilities would qualify for existing OTT.
Diagnostic imaging reimbursement in the coronary arteries.
We believe that an image guided catheter designed for crossing efficiency and the need for fewer support devices combined with an attractive reimbursement scenario provides the opportunity for a highly positive clinical and economic value proposition.
Augmented augmented by the learning with our CTO crossing catheters and peripheral arteries. We've made good progress on our initial development efforts for the first image guided CTO crossing device for the treatment of coronary artery disease.
Our development efforts are focused on catheter designed that combine real time oce T guidance with precise control and stability to allow physicians to safely and efficiently cross cto's, while avoiding damage to the vessel wall.
We are designing our first coronary CTO catheter and a low profile four French size to provide for accessibility and maneuverability and small coronary vessels similar to our peripheral catheters. Our coronary devices are expected to incorporate a precise measurement capability ideally suited for physicians to properly size.
Balloons stents prior to placement, which is critical for optimal outcomes, we anticipate the U S regulatory pathway for this new device to be a five 10-K submission supported by data from an IDE clinical study.
We expect to complete product design for our first coronary device in 2022 with the goal of conducting a clinical study in 2023 to support our regulatory submission.
As we reflect on our experienced this year and look to the future. We saw significant growth in the first half of the year as case volumes returned to normal following the initial waves of COVID-19 infection in 2020 and widespread vaccination is being made available throughout the U S.
With the recent resurgence resurgence of COVID-19, our business was impacted negatively.
As market conditions improve and our new products and clinical indications come online, we expect to return to more accelerated pace of growth.
We have the best product catalog in our history and have grown revenue for our Pam Terrace family of atherectomy catheters by greater than 250% over the past three years.
Pentair SSD are small vessel catheter has been a major growth driver for the company extending our reach to the treatment of below the knee or be teekay lesion.
Tigereye has reinvigorated our image guided CTO franchise and expanded our share of the approximately $100 million peripheral CTO market. We've now sold tigereye to more than 50 sites with the addition of Tigereye, our combined CTO sales have grown by 67% in the first nine.
10 months of this year compared to the same period in 2020.
We've made tremendous strides in developing our portfolio of <unk> and are excited about the potential of our new product development efforts, including the exciting opportunity to expand our platform to coronary applications in the future.
As we drive growth across our primary product lines add upside opportunities from our Lightbox III, an ISR indication and develop new products to expand our addressable market, we provide new growth opportunities for the company and most importantly, empower physicians to provide the best possible care for their patients with the most advanced.
<unk> devices on the market.
At this point I'd like to ask Mark to cover our financials and I'll return for Q&A Mark.
Thank you Jeff.
Total revenue for the third quarter of 2021 was $2 4 million, a 3% increase from the year ago quarter.
Third quarter revenues reflect the impact of hospital access limitations, primarily due to a surge in COVID-19 cases in a number of large markets that <unk> serves particularly in markets located in the southern U S.
We are working closely with our sites to support procedural needs and maintain readiness to treat patients when hospitals return to more normal procedure levels.
Third quarter 2021, catheter sales increased 5% year over year as we continue to focus on increasing utilization with strong market interest in our Panther is supposed to be and new Tigereye CTO catheter.
Growing our recurring disposable revenue streams continues to be a core element of our commercial strategy.
Gross margin in the first quarter in the third quarter was 34% similar to the third quarter of last year averages contribution margin from incremental sales of disposable products is far higher than our reported gross margin providing important leverage in our operating model as we scale the business to drive more revenues.
Operating expenses for the third quarter were $5 3 million compared with $4 9 million in the year ago period.
We are continuing to make investments in expanding our product offering, including our new Lightbox and next generation catheter solutions supporting our commercial sales team and funding clinical programs, which we believe will provide avenues for growth.
As Jeff discussed previously we believe these new products are key to our future success.
Net loss attributable to common shareholders was $6 million in the third quarter compared with $5 5 million in the third quarter a year ago.
Adjusted EBITDA, which is a non-GAAP measure that excludes certain excess and obsolete inventory charges.
<unk> and amortization expenses stock compensation and other items as noted in the tables in today's press release was a loss of $4 1 million compared with a loss of $3 5 million in the year ago period.
A copy of the reconciliation from net loss to adjusted EBITDA can be found in today's press release, which is also posted on our website at www Dot <unk> dot com under the investors section.
Cash and cash equivalents totaled $23 1 million down from $26 7 million at June 30, we believe our cash position is sufficient to fund new product development, our commercial efforts and clinical plans through 2022 at this point I'd like to turn the call back to Jeff for Q&A.
Mark the third quarter saw continued positive momentum on our strategic initiatives, including the announced filings of two new five 10-K submission the significant progress on our new catheter products expected to be released commercially next year and the stabilization of our commercial efforts in the face of the COVID-19 resurgence.
We're focused on executing our strategy to build value for avid your stockholders by driving meaningful growth of our business and fulfilling our mission of radically changing the way vascular disease is treated at this point, we'd be happy to take your questions.
Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time.
Just talk about posing your question you. Please pick up your handset if listening on speaker phone to provide optimum sand quality. Please hold while we poll for questions.
And the first question today is coming from Mark Weisenberger from B Riley Securities Mark Your line is live.
Thank you good afternoon, I'm wondering if you could talk about procedure dynamics across the different geographies.
The Delta variant surged and is it possible to isolate procedures and progress in markets that were either unaffected or less affected by Covid and how did those do.
Yes, so thanks.
Thanks for the question Mark as we said in our statement and as we've heard in the reports from other companies. The markets that were hardest hit we are in the south and especially the southeast kind of the deep south where the infection rates were highest and that led to challenges in the hospital setting both due to limitations on elective procedures.
Jurors the requirement to hold hospital beds for potential COVID-19 patients and also.
Increased.
Testing and other criteria for a hospital for a patient to be admitted to the hospital even for an outpatient procedure procedure.
This was all exacerbated, especially in those markets by House hospital staffing shortages. So.
We saw.
Key markets.
In.
Louisiana.
Arkansas certain places in Texas really hit.
At a more significant level than other markets in the north it is becomes really a market by market state by state.
The shortfall in our business was primarily driven in those markets, which typically are responsible for about 50% of our business the southern markets.
We are seeing.
Those markets start to pick up we are hearing about.
And still feeling the effect of Covid in markets across the country and are hearing reports of increased levels of infection now starting to hit certain areas in the northeast and I think there is an anticipation over the winter months. So it's very hard to forecast, but there is definite.
Markets of real strength that it had been less impacted end markets that had been more impacted I'd also say that the hospital is generally more impacted by the OBL and so we're really pleased with how our business held up and how well we fared versus even other companies with large.
We will comp concentration over this past quarter given that over 80% of our business is in the hospital market.
Very helpful. And then in your prepared remarks, you talked about how in prior episodes with with Covid searches you were able to bounce back pretty strongly.
However at this time, you had talked about some of the staffing shortages not only.
Clinical but.
Some primary care and referral shortages, maybe that kind of filter through the entire chain I'm wondering how you think the the subsequent bounce back will be impacted by these kind of labor dynamics that are new relative to earlier episodes.
Yeah. It is a new I think a new dynamic that we're that we're dealing with right all of us in this industry in this market.
I am reluctant to predict how quickly that will change.
As I said, we are seeing an improvement in key markets related to available procedure time, more cath labs being open some elective procedures coming back.
But the staffing shortages I think are still a very real issue and it would be very hard for me to predict how we work how the industry works through that.
Got it Okay and I believe there were some recent OBL physician fee changes I'm wondering how you think that might expect your your hospital business going forward.
Yes. It was an interesting past few months as it relates to reimbursement so in what you're referring to for those on the call who aren't familiar as familiar as you are is the CMS CMS published the final physicians fee schedule for 2022 recently and what that included was a 15% reduction.
In for atherectomy procedures in the OBL the office based lab setting versus 2021 hospital reimbursement, we anticipate to remain very strong now the 15% reduction in the OBL was significantly better than the 22% reduction initially proposed.
However, CMS indicated that reimbursement levels will continue to decline in the OBL over a four year transition period now again, we're less impacted since over 80% of our business is in the hospital market.
We do expect however that these this reduction and the continued reduction in OBL pricing will continue to put more price pressure on devices for the OBL market and while it's obviously way too soon to say what the impact will be <unk> reimbursement in the OBL continues to decline that could keep.
More procedures in the hospital, setting, which would not be a bad thing for avon's or in the long run.
So I guess the other reimbursement moves that happened over the past couple of months as you might be aware that the AMA CPT panel.
<unk> had an item on the agenda for the September October meeting related to a comprehensive review the lower extremity Revascularization codes. This is an agenda item that had been postponed from an earlier meeting and then during the September October CPT metal panel meeting it was again postponed indefinitely. So we see.
This is an indication that there won't be significant changes to be lower extremity codes in the near future and most analysts and companies that we're tracking don't anticipate that any new codes will be established until 2024 at the earliest.
So kind of a net of this is that we expect hospital reimbursement to remain really strong obs.
OBL reimbursement has been reduced but not at as high a level that it had been potentially anticipated.
And it will be continued to be an evolving story.
Very helpful for that all of that color just final one for me I know you had plans to continue to expand the sales force and drive growth.
Wondering how the labor dynamics are impacting you there and how we should think about.
Sales force expansion into the end of the year and the early part of 'twenty two thank you.
Yeah no. Thank you for the questions Mark so given the challenges presented by the pandemic, we've stabilized our sales head count.
And are not planning on adding significantly to the group.
Through the end of the year as the market works through the current challenges and we are starting to see case volumes return to more normal levels. We will resume our efforts we anticipate obviously in 2022 to build the commercial team, but we have a we have stabilized kind of where we are and don't expect significant expansion in the near term.
Got it very helpful. Thank you.
Thank you Mark.
Thank you and the next question is coming from Nathan Weinstein from Aegis capital.
Nathan Your line is nice.
Thank you Hi, Jackson, Marc and thanks for taking my questions.
Hi, How're you doing night nice to talk to you.
Likewise, thank so much Ah okay. So one of the more exciting things about island here.
I think most would agree that the company has really proven itself to be an engine of innovation.
And the product bag really feels like it's starting to hit critical mass. So maybe you could share with us a sense of the timing and when you see a lot of these cross sell opportunities come together that could maybe drive a higher inflection in the growth rate.
Great Yeah. Thanks for the question so.
When you look at the number of milestones in the activity coming up over the next few quarters, it's pretty exciting so starting with the ISR 500, 10-K, which is not obvious as you know a new product, but it is an expanded clinical indication that we will treat as a new product launch.
When we get the allowance.
We are based on how the review process.
Going in the strength of our submission, including how strong the data is from insight. We're hopeful that we'll receive that clearance in the not too distant future and that will be exciting for us because it not only is highly differentiating but it will allow our sales force to directly promote.
Cantharis for treating in stent restenosis and the data from that study, which I outlined was so positive, especially compared to the the only other major study that had been done in the in the treatment of in stent restenosis with atherectomy excite ISR for laser atherectomy and it's really important to note.
We will be the only directional atherectomy product that has this claim in fact, the only other directional atherectomy catheter is non non imaging atherectomy catheters that are marketed by Medtronic Hawk family are actually contraindicated for ISR. So we see the ISR claim which we are hopeful.
<unk> will still happen this quarter as a way to expand utilization in existing accounts and also a way into new accounts. So that's one day.
An important step forward and we've invested quite a bit in clinical work in preparation for taking good advantage of that claim and the strong clinical data. The next milestone we have coming up is.
<unk>, marking for our new Lightbox III.
We expect to receive that pretty confidently this quarter and we're preparing to have our first cases in Germany. This quarter as well at two important kols sites and so that will provide an opportunity for us to get our first.
Real time case experience.
The Lightbox three which as you know Nathan since you followed us for a while as part of our process to prepare for R. R. U S introduction and launch so we're hopeful again that we will receive the lightbox III clearance prior to the end of the year or at least some time early in 2022 and that will allow us to initiate a limb.
<unk> launch.
In the U S likely in the first quarter of 2022, where we can get experienced train our sales force start to understand how to best transition to this new.
This new imaging console and take advantage of the many benefits it provides especially as it relates to new account acquisition and an efficiency and a case and so that should be in early 'twenty two milestone.
Coming on the heels of that we have two line extensions of our peripheral peripheral portfolio in development, we have our tigereye.
The product, which has a spinning tip and other improvements.
And and developments related to the treatment of tough caps and calcium and we have our <unk> line extension a larger vessel device.
The SFA and popliteal that we believe will have a significantly streamline procedure bye bye no longer are by not requiring a balloon for plaque acquisition.
We expect to file 500, 10-K applications and these again to underscore would be line extensions not replacements of current devices. So the whole idea here is to expand our usage base, but we expect to be.
File 500, 10-K, and CE marks for both of those products in the first half of next year.
Given our track record, we expect that that will lead the clearance first cases in Europe, and and ideally commercial launch in the second half of 2022.
And then in addition to.
The peripheral products.
<unk> shared some information today on the really what we believe is an extremely attractive opportunity to take our image guided approach to the coronary arteries in many ways I feel like all of the work we've been doing up to this point has really prepared us for this.
C a major market opportunity to cross to enable more physicians to safely and efficiently Cros.
CTO is in the coronary arteries on a percutaneous basis.
Have brought an additional resource to help us with that we are making good early progress and we expect to complete our design phase in 2022, which we are hopeful will prepare us and enable us to begin enrollment in the clinical trial in 2023 again, we think the regulatory.
<unk> route there will be a 500 10-K, but that a clinical trial will be required.
But that's a very big exciting opportunity for us the reimbursement is already very strong CTO specific reimbursement for CTO PCI crossing there is already.
<unk> diagnostic reimbursement in the coronary arteries, so a very exciting clinical and I believe economic value proposition and then in addition to the product development efforts. We are still enrolling in our image V. Teekay study that had slowed down a bit because of the new.
A resurgence of Covid infection, but we do expect to complete enrollment and have at a minimum our 30 day data release in 2022, and hopefully and I would imagine we will have at least a large cohort of six month patients prior to the end of the year. So again, bringing new data in a market that is hungry for data.
I mean, we as a small company have invested quite a bit and well designed clinical trials with meaningful clinical outcomes and data.
And then I guess the other backdrop for 'twenty two is now that insight.
As wrapped up.
We will be working with the principal investigators on publication in peer reviewed journals of those results and where theres a lot of great information that we're excited to get out to the market in a peer reviewed journal. So a lot going on we're busy here and of course all of this in the backdrop of continuing to address.
Opportunities in the commercial markets continuing to sell catheters get more and more catheters used all the time and.
And most importantly help our physicians do a great job and deliver outstanding outcomes for their patients.
That's fantastic. Thanks, so much for the helpful color on.
All of that Jeff and just one follow up if I might.
You discussed several very exciting initiatives, including the line extension products, but I just couldn't help but notice that opex overall and in particular, the R&D spend has been trending down sequentially and year over year. So just curious is that a sign that the organization is working on increasing efficiency or how do we think about the R&D side.
Yes. Thank you for the question Nathan So if we look at our R&D spending that also includes our clinical our clinical studies work as we noted the vast majority of work on the insight.
On the insight study was completed in the first and second quarter of this year and so the reduction that you saw in the third quarter was primarily due to that we are actually we actually did expand a little bit in terms of some increase spending because we have actually started this new development opportunity on the coronary program and that is and we are putting some investments in there you should.
Expect to see our on our research and development costs tick.
Tick up slightly.
Through the through the end of this year and also into next year as we continue to put more and more efforts into expanding that research and development program.
Great. Thanks, again, Jeff and Mark for taking my questions and we look forward to continued progress on the business ahead.
Thank you and there are no remaining questions in queue I will now turn the call back to Jeff Slowinski for closing remarks.
Well. Thank you for joining our call. This afternoon, we very much appreciate your interest in our company. We appreciate your support and look forward to reporting our continued progress on our yearend call. Thank you.
Thank you ladies and gentlemen, this does conclude today's conference you may disconnect at this time and have a wonderful day. Thank you for your participation.