Q3 2021 Brainsway Ltd Earnings Call
Okay.
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Yeah.
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Greetings and welcome to the Brain's way third quarter 2021 earnings Conference call. At this time, all participants are in a listen only mode.
Question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded I would now like to turn the call over to Bob yet it of Lifesize advisors. Thank you you may begin.
Thank you all and welcome brain to brain waves third quarter 2020.
'twenty one earnings conference call with US today, our brains waste President and Chief Executive Officer, Christopher von JAKO, Chief Financial Officer, Scott a aguado the format of today's call will be a discussion of third quarter results and a business update from Scott excuse me from Chris followed.
A detailed discussion of the financials from Scott.
Open up the call for your questions.
Earlier this morning, <unk> released financial results for three and nine months ended September 32021.
A copy of the press release is available on the company's Investor Relations website.
Alright.
The call over to Chris and Scott like to mind, you that this conference call, including both management's prepared remarks, and the question and answer session may contain may contain projections or forward looking statements regarding among other topics brains ways anticipated future operating.
Turning to financial performance business plans and prospects and expectations.
For its products and pipeline, which are all subject to risks and uncertainties.
Including shifting market conditions from the COVID-19 pandemic, the global supply chain crisis as well as the use of.
<unk> non-GAAP financial performance.
Additional information regarding these and other risks are available in the company's earnings release and its other filings with the SEC, including the risk factors section contained in <unk> form 20-F with those prepared remarks, it's my pleasure to turn the call.
Now over to Christopher Van JAKO CEO, Chris.
Thank you Bob welcome everyone and thank you for joining US today, we are extremely pleased with the strong momentum business. They continued during the third quarter, we expect that the current positive operating trends experienced throughout our company.
<unk> and driven by recent achievements on the commercial clinical regulatory and reimbursement fronts will lead to further growth for <unk> going forward.
I will discuss all of this in greater detail shortly but first I will provide a brief overview of our key third quarter financial results.
We generated $8 $1 million in revenue for the third quarter of 2021, which represented a substantial 34% increase over our third quarter 2020.
And is indicative of the growing demand for our deep Tms therapy in multiple indications.
We have now demonstrated year over year growth in fiber.
Any consecutive quarters, we believe the progress we've achieved during this period is sustainable.
In addition, our revenue for the first nine months of 2021 has nearly reached the total revenue achieved for all of 2020.
We continue to shape, our business practices to meet the challenges of the pandemic.
And the spread of the Delta variant during the third quarter.
Which appears to have had minimal impact on our business.
As we've discussed previously and as many of you are likely aware from the increasing significant media attention. It has received in recent months.
Mental health and addiction issues continue to rise dramatically.
Radically.
Especially as we all lived through the impacts of the pandemic.
However, it seems that the pandemic really only amplified and already growing increase in depression.
According to research recently published by Pharma co economics, there was a dramatic rise of <unk>.
Sent in major depressive disorder in the U S. During the pre pandemic period of 2010 to 2018.
During that time, the number of adults with depression grew from $15 5 billion to over 17 million adult annually.
The depression growth rate.
It was even faster among adults aged 18 to 34.
This study also estimates that depression carries an enormous economic burden, which now costs the U S $326 billion per year.
Unfortunately, this trend only seems to be growing due to the pandemic.
<unk> presented recently shared a study on the lingering effects of COVID-19.
And reported that a patient survey, 23% of those who contracted COVID-19 reported feeling anxious or depressed six months after their first COVID-19 symptoms appeared.
This is the appropriate.
Segue to a discussion of our recent FDA clearance for anxious suppression, our third FDA clearance in just the past 12 months.
The expanded FDA labeling now allows brain's way to market its deep Tms system for the treatment of not only depressive episodes, but also part of depression patients with co morbid.
The lane Xiety symptoms.
This makes brands, where the only Tms device with labeling specifically addressing anxiety in depressed patients first.
Further highlighting the competitive advantages of our products.
In the same short treatment session brainwaves deeper and broader stimulation.
<unk>, which is unique to our deep Tms system allows us to therapeutically address multiple areas of the brain, which are associated with both depression and anxiety symptoms.
Is that he is the most proud of at comorbidity to a primary diagnosis of depression in fact between.
60% to 90% of patients with depression also have moderate to severe anxiety.
Anxious depression is linked to greatest severity of depression symptoms higher risk of suicide.
<unk> response rates to treatment and higher risk of cardiovascular disease and.
In diabetes.
We have already increased our direct to patient promotion of anxious depression through our marketing and advertising campaigns and have now completed salesforce training around this new expanded indication.
This clearance was achieved after we submitted a comprehensive clinical data to the FDA.
And he has already contributed to the success achieved this quarter.
This all serves to further enhance the message of our holistic approach to mental health care.
Collectively these trends and recent achievements further support our continued efforts to increase awareness among patients.
Clinicians.
During the third quarter, we hosted five well attended Webinars, including one focused on our expanded anxious depression FDA label.
We also continued to promote education on the benefits of deep Tms therapy.
As in recent quarters Im pleased to report that our <unk>.
And website traffic again increased significantly.
Up nearly 80% in the first nine months of 2021.
As compared to the prior year period.
In the third quarter, we began an overhaul of the content of our web site, which we expect to complete by year end aimed at improving the user experience.
Organic increasing speed and building on our search engine optimization efforts to make deep Tms therapy more visible for all it needs.
We also added new chat robot aptly named H coil.
While this feature is currently in beta version, it's already yielding silicon.
Significant information on what website visitors are searching for and how we can better serve their needs.
Its also been useful in linky prospective customers with our sales team.
Thereby potentially serving as another important asset in our commercial toolbox.
As October was.
Experiencing awareness month, which also included world mental health day, and OCD OCD awareness week, we executed on a number of patient awareness initiatives.
These included posting a patient story each week via our social media channels. Each patient provided an overview of their mental health journey.
What brands, we treat them means to them and where they are today because of their experience with deep Tms therapy.
We also started initiative together additional patient testimonials that our clinics can use on their own sites to help promote their practices.
QR codes were provided for patients.
<unk> to load the App and tell their story.
Additionally, <unk> has received positive media coverage through several recently highly viewed news features including a recent appearance by Dr. Eric <unk>, Our Chief Medical Officer on CBS News during National suicide Prevention week Dr.
Dr <unk>.
<unk> discussed the alarming escalation suicide trends and current treatment options, including deep Tms therapy.
Overall, our strategic investments in digital media. This year have garnered unprecedented 60 million impressions this quarter.
Supporting our efforts to create broad awareness.
<unk> of our technology and its therapeutic benefits.
Collectively the goal of these initiatives is to reach any patient seeking an alternative to traditional medical management of their mental health.
Of course as important as our digital efforts are we all know there is no substitute for in person.
<unk> interactions.
In this regard I'm pleased to report that our sales professionals in person access to customers remain steady this quarter.
A return to live in person conferences that began in the second quarter has also continued.
We recently had is we recently had a significant presence at the <unk>.
<unk> Congress in San Antonio.
In the neuroscience Education's two in Colorado Springs.
With attendance at an additional in person conferences planned for December.
I will now turn to deep Tms for the treatment of OCD.
As a reminder, brands way is the first.
Its device to have achieved FDA clearance for this hard to treat condition and it remains the only Tms company to have received this clearance based on pivotal data conducted on his phone device.
During the third quarter, we shipped 33 add on helmets for OCD treatments increase.
Creasing the total number to 280.
Moreover, the overwhelming majority of the system shipped in Q3 <unk>.
Included in add on helmet for OCD.
<unk> to the strong revenue achieved this quarter.
We are pleased that nearly 40% of our total <unk>.
<unk> now includes OCD treatment capability.
We continue to view this progress is a testament to our customers' strong belief in the benefits of deep Tms treatment for OCD and early progress on the reimbursement front.
As a reminder, regarding the reimbursement landscape.
To date, there are approximately 40 million covered lives eligible for reimbursement on our OCD therapy.
This includes members covered by both Centene and HCS see an independent licensee of Blue Cross Blue Shield and the fourth largest healthcare plan overall in the U S.
So those two developments both in terms of customer adoption and reimbursement are indicative of the exciting traction we're seeing with this key indications.
With that I'd like to now provide a brief update on our commercialization plan for deep Tms for smoking addiction.
This.
Offering the first of its kind in the medical device space and our first addiction product is being launched at a phase rollout.
We are pursuing this strategy in order to further cultivate on our messaging.
Develop optimized business models for customers refined ideal addressable patient population.
And Bill post marketing data to develop a reimbursement strategy.
We previously completed the first phase, which was a controlled market release in a limited market release is now underway.
We can we continue to receive excellent patient feedback including.
Very encouraging anecdotal quit rates.
We also conducted a qualitative and quantitative market research study in conjunction with our space release strategy should better understand messaging and target markets for our smoking launch.
One outcome from the market research.
Seems likely to have a strong traction with smokers is the finding that two out of three completing patients that had quit remained absent for the duration of the 16 week follow up.
We believe that this is a sign of durability, which will resonate strongly with smokers.
That completing our efforts on the commercialization side, we were pleased in the third quarter to have the positive data from our pivotal multicenter clinical trial supporting the use of deep Tms therapy, as a safe and effective treatment for smoking addiction published and there we're now journal world's psychiatry.
Publishing.
These data in a peer reviewed medical journal allows us to both enrich the evidence around the treatment and also to further disseminate critical information should providers, who are seeking effective noninvasive options to help their patients.
Moving on I'd like to take this opportunity to.
Closing of Dr. Jeff <unk> to the <unk> Scientific Advisory Board.
Dr. <unk> is currently the chair of the Department of Psychiatry at the University of California, San Diego School of Medicine.
He has been on the forefront of expanding the clinical understanding of brain stimulation and his insight.
<unk> and direction will be invaluable to us as we continue to enhance our technology and grow our business.
Turning to Investor Relations, we hosted a well attended kols that for investors and analysts in the third quarter that highlighted the OCD indication.
This virtual event featured a president.
Well patients by Dr. Kimberly Kras past president of the clinical Tms Society, and a regional medical director of the Texas region for Greenberg Tms.
Dr. <unk> discussed the current treatment landscape and unmet medical need in treating patients with OCD.
In addition.
President Dr. <unk> presented deep Tms as an effective treatment for OCD.
We also presented at several health care investment conferences in the recent months and conducted multiple institutional and high net worth.
Focus virtual non deal road shows.
Finally, as always I.
<unk> to thank our valued customers, who contribute each day to battling the mental health crisis as well as to the entire <unk> team for their better stronger and Boulder dedication to our mission of advancing neuroscience to improve health and transform lives.
With that.
I would like I will now pass the call to Scott for his review of our third quarter 2021 financial results.
<unk>.
Thank you Chris.
<unk> had another strong quarter of revenue growth and as Chris mentioned, it is the fifth consecutive quarter of growth versus the prior year period.
For the.
Third quarter of 2021 revenue was $8 1 million, a 34% increase compared to third quarter 2020 revenue of $6 million.
As I have noted previously sequentially.
Third quarter revenue of 2021 grew $1 1 million or 15% over the second quarter.
That 2021.
We believe this growth demonstrates the continued value of the brain's way solution, given typical third quarter seasonality and the uncertainty of the ongoing pandemic.
For the first nine months of 2021 revenues were $21 2 million representing.
Representing a 41%.
Quarter of or $6 $2 million increase compared to revenue of $15 million for the first nine months of 2020.
As of September 32021, bringing sways installed base totaled 717, deep Tms systems, which reflects an increase of 35 net systems.
<unk> central basis.
An increase of 124 net systems or 21% as compared to the end of the third quarter of 2020.
Gross profit for the third quarter of 2021 was $6 1 million compared to $4 5 million during the prior year period.
Gross margin for the.
So it was 76% as compared to 75% in the third quarter of 2020.
Gross profit for the first nine months of 2021 was approximately $16 5 million or.
Or is 78% margin compared to $11 5 million gross profit or a 77% margin.
Arjun during the prior year period.
Margins can fluctuate slightly however, we expect margins to stay within this range in the fourth quarter.
Moving onto operating expenses for the third quarter of 2021 research and development expenses were $1 8 million as compared to $1 4 million.
In the third quarter of 2020.
Research and development expenses for the first nine months of 2021 were $4 4 million.
As compared to $4 2 million in the prior year period.
We expect our investments in R&D to increase as we continue to invest in our current indications depression.
OCD and smoking addiction.
As well as some additional future indications.
Sales and marketing expenses for the third quarter of 2021 were $4 million compared to $2 4 million for the third quarter of 2020.
This increase reflects our continued investments in the commercial activities to.
Future growth.
For the first nine months of 2021 sales and marketing expenses were 11 4 million.
As compared to $8 3 million in the prior year period.
Moving on to G&A expenses for the third quarter of 2021 were $1 5 million compared to.
<unk> 3 million for the third quarter of 2020.
And $4 3 million for the first nine months of 2021.
As compared to $3 4 million in the prior year period.
Total operating expenses were $7 4 million for the third quarter of 2021 compared to five.
Two 1 million for the same period in 2020.
Total operating expenses for the first nine months of 2021 totaled $20 million.
As compared to $15 9 million in the prior year period.
As I mentioned last quarter, the increase in operating expenses on a year over year basis is reflective.
One of cash preservation efforts to mitigate the effects of the pandemic in 2020.
Operating loss for the third quarter was $1 2 million.
Compared to an operating loss of $600000 for the same period in 2020.
Operating loss for the first nine months of 2021 totaled $3.
$5 million as compared to $4 4 million in the prior year period.
For the third quarter ended September 32021, we incurred a net loss of $1 8 million compared.
Compared to a net loss of $1 million in the third quarter of 2020.
The first nine months of 2021.
Net loss was $5 1 million as compared to a net loss of $5 million in the prior year period.
Moving on to the balance sheet, we ended the quarter with cash cash equivalents and short term deposits of $55 3 million compared.
Compared to $17 $2 million as of December 31.
'twenty.
We believe that our strong balance sheet allows us to continue our sales and marketing efforts to drive additional adoption of our multi indication deep Tms system as well as invest further in R&D.
In order to commercialize additional potential indications of our differentiated innovative.
<unk> 2000 <unk>.
We are confident that these initiatives and investments will support long term shareholder value.
This concludes our prepared remarks I will now ask the operator to please open up the call for questions operator.
Thank you we will now be conducting the question and answer session.
We would like to ask a question. Please press star one on your telephone keypad a.
A confirmation tone will indicate your line is in the question queue you.
You May press Star two if you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.
Please while we poll for your.
Question, our first questions come from the line of Steven Lichtman with Oppenheimer. Please proceed with your questions.
Thank you good morning, guys and congratulations on the quarter.
Chris you, obviously saw a clear step up in OCD helmets again here. This quarter are you seeing the pickup in areas.
Where reimbursement coverage by 15 and HTS. He is stronger or is it broader than that because of the halo effect of the positive reimbursement news earlier this year any more color on that would be would be great.
Thanks, Steve and good morning, and thank you for your comments about the quarter, Yeah, we're really excited about the quarter.
<unk> as you could possibly tell regarding OCD yeah.
I would say, it's more of a halo effect.
Most of the systems that we shipped this quarter came.
It came with the OCD helmet.
So we're very pleased and as I mentioned that.
And the comments that we prepared.
We really feel that people are getting onboard because we're getting some gain some traction with reimbursement.
Okay, great. Thanks, Chris.
I'm wondering on the next steps in the smoking addiction launch I think you were at 10.
10 centers. Initially are you moving that up now to another tranche before going full and when do you expect to move to a full launch.
Yes so.
I think we May have mentioned on the last call. We went from the 10. The first in the controlled market release, then we went up to 15 in the controlled market.
Or at least and we're now in the limited market release phase. So we actually train the entire Salesforce I think I mentioned that on the last call and then we started in this limited launch where we're taking orders and we are delivering systems to particular people and I think Scott what do we have now totally installed.
Wholesale.
<unk> 30 closer to 30, I guess at this point, including the limited yes.
<unk> strong levels, yes.
Got it great.
And I guess lastly for me and I'll jump back in queue.
The sales force.
And apologies if I missed this I think I know you were at 16 last quarter.
Were targeting I think get to 18 by year end is that still the case any any update on that.
On the sales force side.
Yes. Thanks so.
On the last call. We had 16 sales professionals were up to 17 sales professionals, we are still targeting that 18.
Four.
For the year end.
Okay, great. Thank you guys. Thanks, Steve appreciate it nice to hear from the state.
Thank you. Our next question is coming from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your questions.
Good morning, Christian Scott This is actually destiny on for Jeff how are you.
Yesterday.
How are you I was going to say it didn't sound like Jeff.
Yeah.
Little more feminine maybe but anyway I was wondering I'd like to start there was a press release regarding seizures, a couple of months ago and I was wondering if you could talk a little bit about that and what impact do you think that has on the overall TNF market.
Oh good question.
I thought this.
Perhaps may come up on the call today.
So at the outset, let me just say that Tms systems, which have been researched over many years.
Have a very favorable safety record, including the brain's way deep Tms system.
So my belief is that.
It's a mistake for the industry overall to even talk about seizure rates as if they were an issue and it's unfortunate that some in the industry feel they need to raise it.
But as long as you brought up the topic I want to be clear, whether using traditional Tms systems or the brand's ways deep Tms system seizures are in extremely rare, but are well known.
Capex associated with brain stimulation.
We regularly publish our own seizure rates and we did so last November.
<unk> our COO.
Comprehensive.
Data involved about 95000 deep Tms patients and found seizure rates to be about two in 10.
<unk> thousand when following instructions for use and this is comparable to previous published outcomes seen with other Tms studies also.
As for the specific claims about the about the us.
Uh huh.
The document that you were talking about in particular with a higher seizure rates regarding deep Tms.
<unk> H one coil.
These were based on our questionnaire that were distributed via survey Monkey, which is both I think misleadingly was misleadingly presented and Worsley analysis was based on really shoddy science spin.
Specifically the survey claims to have resulted from outcomes of 25000 Tms.
Since <unk>.
Less than 2000 of which had been treated with deep Tms.
Our publications more comprehensive again with 95000 deep Tms patients, which is a vastly larger sample size in the dataset used and that misleading survey.
And I just wanted to point out as a comparative reference.
So most popular in the presence of antipsychotic medications show significantly higher seizure rates range of between one to six out of a thousand patients not 10000 patients and finally destiny I just wanted to add I think it's worth noting that brands where systems are used at some of the.
Patients like you haptic hospitals in the country.
Johns Hopkins.
Mclean Hospital, which is the largest psychiatric teaching hospital and Harvard Medical School here in Boston, Stanford University Medical Center, UC, San Diego Health Center among others.
And this is not to.
I mentioned, the largest Tms provider in the country Greenberg, who also use this brand's way. So I don't think any of these centers would be using the brands with Etfs. It. So that they felt there was any type of safety issue.
Hopefully that addresses your question.
A question there.
Yes, that's super helpful. Thank you for all that color.
And then I'm curious.
If you could just maybe remind us.
Investors and whoever else, maybe new to the story about the importance of having a dual pronged strategy, where you not only are driving commercial expansion, but also providing or.
Psychiatrist with other indications of use could you just.
Yeah.
Expand a bit more on that and how it impacts the company in the longer term.
Yeah, that's a great question I think.
One of the things that we've seen since I joined is really the overall I would say market about our platform and why people are choosing our technology.
Technology, and I think obviously depression OCD has been big and we've seen it now, especially with reimbursement coming on smoking addiction. We're just early into and then I think with our latest.
<unk>.
<unk> clearance on anxious depression.
I think is really really important.
For not only the providers to be able to talk about anxiety within depression patients, but also to be able to talk to the patient about it and and.
And I think it really makes a real good thing for our platform.
Does that help.
Yes, definitely and then maybe just lastly for me.
I'm curious if you could talk to maybe some of the trends for Q4, not necessarily guidance or anything but more around what youre seeing in terms of seasonality versus COVID-19 versus staffing disruptions et cetera.
Yeah.
I think you know I think our trends that we had in Q3, we're extremely powerful.
<unk>, we were less I think affected by Delta variance that maybe some of the other manufacturers and people within medical devices as well.
And we see continued positive momentum in our business.
I know, it's really tough to tell I think I've mentioned this on previous earnings calls as well a lot of our secret sauce.
Sauce happens in the last several weeks of the quarter, but all feels really good right now as we're heading into the later stages of the quarter.
Got it that's really helpful. Thank you so much I'll jump back in queue.
Thanks Anthony.
Thank.
Thank you. Our next question is coming from the line of Jason Bedford with Raymond James. Please proceed with your question.
Good morning, just a few questions I guess for me.
On the OCD momentum there.
Near 40% of your installed base has how much can we assume that the other 60.
Percentage of it is just waiting for more established reimbursement coverage is that kind of the.
The speed bump here.
Yes, Jason Great question, I think I may have mentioned this in previous calls as well, but I'm glad you brought it up there are some practices, where we have our systems in psychiatric.
They don't really focus on OCD.
We've seen that.
But I think.
The latest round of assistance, we've been selling this year, especially since the since we've had the momentum about reimbursement we've seen much more people are much more of our customers taking the OCD helmet I think we.
We'll see.
Install base also start to do that at some point.
And it probably my guess it will get over 50% of our installed base at some point, maybe even closer to 60%.
Okay. That's helpful and then just on on OCD reimbursement.
<unk> got coverage for what.
Patrick Donnelly and lives.
Are there any additional reimbursement wins anticipated over the next couple of quarters.
Well, it's obviously tough to predict and I don't like giving guidance I remember when we did the call earlier in the year you know I was very hopeful.
Before the end of the year we.
40 million at least one.
Insurance coverage.
Before the end of the year, we got to is obviously I mentioned with Centene and Acs fee and then of course, we got the positive.
Coverage.
Determination, but it was a draft policy from Palmetto and Thats still has been finalized.
We have reached out to over 60 of the top insurance companies.
And the company sorry in the country.
And then of course with the Medicare Max.
Reached out to all of them and talk to them.
In fact at the end of September.
There was.
It would get a public call, which happened I think it was on September 29.
It was it really all the Medicare Max excluding Palmetto, they all got together.
And in the public call.
<unk>.
Brought on.
Six or seven experts.
Bert.
Where they were six or seven experts actually reviewed all our brains raise literature.
About OCD was really exciting to listen to the call, but in the end, it's really difficult to know whether the other macs will all pick up coverage some of them will pick up coverage or maybe a little delay so it's.
But I was really encouraged by the call that's what I would say.
Okay.
Okay. That's helpful.
On the label expansion that you received mid quarter on <unk>.
For decreasing anxiety symptoms you mentioned I think in the call.
<unk> already contributed to this.
Can you identify orders that you believe directly stem from this label and just on the timing of the marketing and the sales force training efforts.
This occur in September.
So they are training happened early in September really close after our.
So.
I think we got the clearance in August I believe at the end of August actually I remember exactly where it was but.
It definitely contributed to the quarter.
Hard to put on specifically what systems didn't but hearing from our sales force and talking to the sales force the ability to talk about anxiety depression.
You know it makes a big deal.
Yes, I can talk for hours about this really but in a nutshell I think it's pretty powerful to be able to have our customers be able to speak about anxiety within theres pressure patient since it's such a cobalt issue and the ability to use.
Patient H, one helmets in the depression treatment in the same setting not only handle the depression, but also anxiety is extremely powerful and the data was really compelling I think it was something that we've known for some time, but the ability to look at it in these controlled.
Clinical studies, where we really saw the difference between.
The placebo or sham.
Yeah.
Was just really compelling and even actually we compare it to medications as well.
But I think the differentiation really helps from a competitive sales standpoint, when we get there as well.
It's another further offering that we have.
Right I guess, what I'm getting at is I assume that this label, we will have a bigger impact in <unk> than in <unk>, just given that you'll have it for the whole quarter here.
Versus where there is a partial quarter of summer summer quarter at that.
<unk>.
Okay.
Maybe just for Scott.
And perhaps I missed it but what was direct versus recurring revenue in the quarter.
Yes, so it was about 60% direct versus 40% recurring.
Okay.
Okay.
So just back to the <unk>.
Just back to the comments about anxious depression look it's just it becomes part of our overall toolkit for our sales team to go out and continue to market right.
Yes.
Thanks, Jason.
Yeah.
Thank you. Our next question is come from the line of from <unk> with H C. Wainwright. Please proceed with your questions.
Hi, This is <unk> dialing in for Ron So Roger can you hear me okay.
Yes, Hi, Hubert how are you today.
Yes doing great great.
Congrats on your progress.
So just a couple of questions.
And with respect to OCD.
OCD as an umbrella business comprising of at least four disorders. So do you think the deep Tms system could be particularly effective against one disorder versus the other within the umbrella OCD.
Can you just expand what you mean by before.
Some worse.
This was mentioned during the call.
Oh, Okay, Okay got it.
Very good point, so yeah, there's sort of other deviations of OCD right like.
Okay.
Mike.
Body dysmorphic disorder, and things like that yeah, we're doing further.
They're studying for that.
And we plan to do further studying to see how it will impact those other different variations.
But I think obviously.
This is a big a big pool population 6 billion people will just get pure OCD in their lifetime and about $3 million of though it's about.
Half of those obviously will.
Not respond to medication and as I think I, probably mentioned in the past where depression. There are over 40 medications and then you can do a combination of medications only five medications approved for OCD.
And it's obviously a.
Our complex disorder.
Great. So the furthest out as already mentioned during the call of our body Dysmorphic disorder, holding the saga of hassling disorder, and skin picking Desoto guest preference.
Yes.
Yeah, alright, so thanks for the clarity there and then Nick.
Let's see so it appears at least Oh said he takes 14 to 17 years to diagnose so given brain waves penetrating the OCD market.
Potential marketing strategies might be required to ensure patients can obtain benefits of early treatment.
So.
So I think one of the things that we're doing from a well, let's just say first that clinicians are completely aware of this right and we're working lockstep with them and obviously the earlier diagnosis the earlier treatment, they're going to benefit quite a bit more from it.
They obviously are clearances for 18.
And we do actually have a study going on in younger adults at the moment.
It's more of a pilot study one of the large universities in the U S. So we're looking forward to getting those results over time.
No that pace.
Patients are treated off.
And all of the younger age.
But I think Youre right you know the earlier, we can get this diagnosis treat it and you've probably heard from that K well call the better.
Better outcomes, you'll have in the patients general and by the way the same thing goes for depression as well.
Okay and one lastly, maybe this is for Scott. So the gross margin continues to be impressive. So just curious to hear your thoughts on whether inflation would affect your gross margins moving forward.
If that's what mitigating strategies might be declared lessened the impact.
Yeah, It's a great question and something we've.
Label, I know, we've been thinking about and watching the economic trends.
At least for the fourth quarter most of our inventory is in and built and already ready to ship because we have parts with some longer lead times.
And then we're just working to really manage through this.
Haven't really thought about our outlook too far for 2022, yet as we sort of have enough inventory for the near term here, but you know.
If there are inflationary pressures continue it will obviously have an impact on our cost of parts and we'll have to determine how we can either pass that on or how we'll manage through it.
Okay. Thanks, Congrats again.
Thank you.
Thank you.
Thank you we have reached the end of our question and answer session period, I would like to turn the call back over to Christiane Yaacov for any closing comments.
I would like to thank all the investors analysts and other participants.
<unk> for their interest in brain's way and with that please enjoy the rest of your day.
This does conclude today's teleconference. We appreciate your participation you may disconnect. Your lines at this time and have a great day.