Q1 2022 AxoGen Inc Earnings Call
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Your conference call will begin momentarily. Thank you.
[music].
Good day, ladies and gentlemen, and welcome to the.
The accident.
Reports first quarter earnings call all lines have been placed on a listen only mode.
If you require assistance throughout the conference. Please press star zero on your telephone keypad for retail operator at this time. It is my pleasure to turn the floor over to your host Abdoulie, Sir the floor is yours.
Thank you Diana.
And good afternoon, everyone.
Turning me on today's call is Karen generate acquisitions, Chairman, Chief Executive Officer, and President, Eric If any vice president as a peripheral nerve science and clinical innovation and Pete Mariani Executive Vice President and Chief Financial Officer.
Karen will discuss the quarter and our outlook for the year, Eric will discuss the Recon study and top line result, and Pete will provide an analysis of our financial performance followed by closing remarks for Karen I had a question and answer session.
Today's call is being broadcast live via webcast, which is available on the investors section of the accident website within an hour. Following the end of the live call a replay will be available on the investors section of the company's website at Www Dot accident, Inc. Dot com.
Before we get started I would like to remind you that during this call conference call.
The company will make projections and forward looking statements regarding future events.
We encourage you to review the Companys past and future filings with the SEC, including without limitation. The Companys forms 10-K, and 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward looking statements.
These factors may include without limitation statements related to the expected impact of COVID-19 at hospital staffing on our business statements regarding our growth our financial guidance product development product potential expected clinical enrollment timing and outcomes regulatory processes and approval.
Renovation timing and expense financial performance sales growth product adoption market awareness of our products data validation, our assessment of internal controls over financial reporting our visibility AD and sponsorship all conferences and educational events global business disruption caused by Russia's invasion of you.
Crane and related sanction and other matters not within our control.
And with that I'd like to turn the call over to Karen Karen.
Sure.
Thank you Anne and good afternoon, everyone.
Thank you may be talking to you today.
Pleased with our first quarter revenue of $31 million matching last year's first quarter and an increase of 6% excluding the impact of revenue from <unk> soft tissue membrane.
We're also thrilled to have announced today that our recon study successfully achieved its primary endpoint, which is a critical milestone towards transitioning advanced nerve graft to a license biologic and further supports the expanded adoption of events.
Before providing comments on our operational results, we'd like to discuss the recon topline data readout.
This study achieved its primary endpoint of non inferiority as compared to conduit.
The safety profile in this study was consistent with previously published data.
And we remain on track to complete the work necessary to submit our BLA in the second half of 2023.
I would like to remind you that this study was the culmination of many years of effort one of the most significant undertaking in our company's history.
We are extremely pleased with today's outcome, which is consistent with the results. We have seen in our registry data collected over the last decade.
Achieving recounts topline endpoint provides clinical confirmation of the performance of advanced nerve graft.
The results of this study provide level one clinical evidence the highest quality possible.
Which significantly bolsters, our growing arsenal of data and peer reviewed papers and provides robust data to support surgeon adoption of an optimal treatment option for many patients with peripheral nerve injuries.
We believe the current standard of treatment using autograft is suboptimal and can lead to complications with a second surgical site.
Use of advanced nerve graft has an established track record and continues to gain traction with surgeons as they adopt the oxygen algorithm.
We don't have much work to be done prior to filing the actual BLA submission, which we anticipate will occur in the second half of 2023.
We're in the process of compiling the appropriate documentation on this clinical study our facilities operation quality system and much more.
All of which are required for a successful application.
I'd like to now turn the call over to Erik <unk>, our VP of peripheral nerve science and clinical innovation.
We'll go over the recon trial and topline results.
Eric has been with oxygen for 15 years and has been instrumental in the design and execution of the Recon study.
And we're happy to have him on the call today Eric.
Darrin, it's a pleasure to be here.
I'd like to begin by providing some background on advanced nerve graft in the recon study.
Oh.
Launched in 2007.
There are over 50000 advanced nerve grafts have been implanted to date.
Events had a long successful and safe track record.
Excuse me.
Launched in 2007 with over 50000 of ancillary graft implants of Andrew has had a long and successful track record on the market.
Originally it was classified and regulated as a 361 tissue product, which fell under the FDA human cells tissues and tissue based products in 2010 accident and FDA aligned on transitioning advanced from a 361 tissue to a 351 biologic as part of this transition.
Planned FDA granted <unk> enforcement discretion to allow us to continue to market and distribute advance while working towards our BLA submission.
Subsequent to our transition plan FDA released a guidance document on regulatory considerations for tissue products that included classification of peripheral nerve as a non structural biologic tissue.
In support of our BLA, we underwent this special protocol assessment to gain agreement with the FDA on the robustness of the study design and the analysis plan.
Those efforts and discussions led to the creation of the Recon study <unk>.
<unk> is a phase III pivotal clinical trial designed to compare safety and efficacy of advanced nerve graft and conduits for digital nerve injuries and the hand, the study as prospective randomized subjects and evaluated minded NSS recovery outcomes in nerve discontinuities between five millimeters in 25 millimeters in length.
Across the 12 month period.
The study was designed to look at sensory outcomes for advance with the primary endpoint being a test for non inferiority to conduits.
Additional analyses were performed to test for superiority between the groups.
The primary endpoint measure static two point discrimination outcomes. This is the ability of an individual to feel our discriminate between a single point and two points in the affected area in other words, it's a measured since sensory density in the skin the smaller the distance that can.
And be identified as two distinct points the better the sensation set.
Static viewpoint discrimination is a standard and well accepted measure for determining sensory recovery in the hand.
It defines the highest threshold of sensory recovery and normal sensation in the hand is characterized as static two point discrimination of six millimeters or less.
The study design also included in depth training for surgeons on tenants of good nerve repair we were able to leverage the accident nerve repair training algorithm developed by expert nerve surgeons and the <unk> lead investigators to ensure attention was given to the important technical considerations that lead to better nerve repair.
This included training on trimming to healthy nerve in achieving attention lists nerve repair and the appropriate surgical techniques to be used during implantation of each of the products. This training and standardization was implemented to ensure that each subject had an opportunity to achieve a good outcome.
Recon enrolled its first subjects in 2015 and the last subject completed follow up on August of 2021.
Both study groups were found to be well balanced across the demographic variables of age gender and gasoline <unk>.
A sufficient sample size to support the analysis.
As we outlined today in our press release, the Recon study met its primary endpoint the predefined analysis down that over all gasoline the advanced group met non inferiority testing.
This is an important step towards using the evidence from recon to support.
Our BLA for events.
In addition to the primary endpoint analysis, we also observed that as nerve gap links increased.
<unk> performance demonstrated statistical superiority to conduits.
And the return of static two point discrimination and gaps greater than 12 millimeters.
In addition to demonstrating superior sensory outcomes as gap links increased subjects repaired with advanced nerve graft were found to have statistically superior time to recovery in gas greater than 10 millimeters.
These patients that were achieving normal static two point discrimination update three months earlier than those in the conduit group.
This follows what we would expect given the mechanistic differences between advanced nerve graft and manufactured conduits. The biologically active laminin structure found in advance provides the organized architecture inherent to peripheral nerve and the guidance skus that can provide a direct halfway across the nerve defect.
In our preclinical evaluations of <unk> processed allografts demonstrated superior numbers of axons regenerating across the gap.
As compared to conduit. We believe this plays a key role in achieving these appearing results observed with vans.
The safety profile of the study was similar similar to previously published studies.
Nerve related pain was the most commonly reported adverse event in recon persistent and unresolved pain was observed in nine or eight 3% of the conduit group and in two subjects or one 8% of the advanced group the incidents of pain was observed across all gambling.
We're excited with these top line results and we are continuing our analysis of the additional data that includes quality of life measures pain medication usage and other outcome measures.
Within the study.
We look forward to reporting the full analysis of the Recon study results. Later this year, we're working diligently towards the required tasks and submission of the BLA and we anticipate submission of the BLA in the second half of 2023.
Thank you for the opportunity to share these exciting findings are.
Now I'd like to turn the call back over to Karen to discuss our first quarter results Karen Thanks, Eric.
We could not be more excited about the huge achievement and I want to thank all of our participating subjects clinical sites and investigators and all of our employees who have contributed to this accomplishment.
Returning to our first quarter results.
We were pleased that our revenue increased each month of the quarter and across each of our nerve repair applications of extremities extremities trauma breast pain and all that.
With Covid related hospitalizations, peaking in early early in the quarter and then declining surgical schedules gradually improved across the quarter. Despite ongoing hospital staffing challenges for example, after suspending breast reconstruction procedures for several weeks.
Most of our breast customers had restarted reconstruction procedures by the end of the quarter, providing the opportunity to begin catching up on a growing backlog of patients.
We anticipate hospital staffing issues will improve over the course of the year and are optimistic about our growth prospects.
Our commercial focus remains on driving deeper penetration into customer accounts, while also continuing to add new accounts, we continue to expand surgeon adoption of the accident nerve repair algorithm across your accounts leveraging the numerous clinical publications featuring our products and now supported by the positive topline results.
<unk> of our recon trial delete discussions with surgeons.
As of the end of the quarter, we had 288 core accounts and 926 active accounts, representing an increase of 5% and 1% versus prior year's first quarter respectively.
As a reminder, active accounts are those that have ordered at least six times in the last 12 months and may still be in the early stages of adoption.
Active accounts continue to represent about 85% of our total revenue with the top 10% contributing about 35% of revenue.
Yeah.
Core accounts represent more penetrated accounts defined as those that have had greater than $100000 in revenue in the trailing 12 months. Our core accounts continue to represent about 60% of our revenue and typically contain at least one surgeon who has adopted the accident nerve repair algorithm for a significant portion of his.
Her nerve injury patients.
Leveraging this surgeon success with our product we focus on gaining more cases with that first surgeon and gaining adoption by additional surgeons in that account.
We continue to see that our best opportunity for growth is within our core accounts by more deeply penetrating the treatment of traumatic injuries and continuing to expand into other nerve repair applications, including breast and math and the surgical treatment of pain.
We ended the quarter with 116 direct sales representatives, an increase of one during the quarter and up from 106 a year ago.
As we commented in February we expected our growth expectations can be delivered primarily through improvements in sales rep productivity. However.
However, we do anticipate adding five to 10 sales representatives. This year to increase our number of territory based on growing sales and market opportunities.
Our direct sales force continues to be supplemented by independent sales agencies that represent approximately 10% of our total revenue.
We continue to build market awareness of nerve repair with health care providers and through our direct to patient initiatives, particularly in our market development efforts for the breast and paint applications. We continue to see strong traffic at both our recent session and rethink pain website.
These educational marketing tools are aimed at increasing awareness of the potential for nerve repair procedures to improve outcomes for patients undergoing a mastectomy and reconstruction.
And those suffering from chronic neuropathic pain.
We continue to achieve our goals with our surgeon and with our surgeon education program.
Including training more than 75% of the current class at hand, and Microsurgery Fellows.
With a return in the fall to in person education programs that include hands on nerve repair training theres been significant educational interest among surgeons, resulting in strong attendance at both our fellows and our best practices programs.
We will continue these programs throughout the year.
Our Ranger and match registry has continued to enroll.
Now with over 2600 advanced nerve graft repairs enrolled in Ranger.
Data from these two clinical registries continue to play an important role in forming surgeons and their clinical decision process.
Enrollment in the comparative phase of repos are steady or actually a gardener of cap compared to standard treatment for symptomatic neuroma is ongoing and we anticipate completing enrollment in Q2 of this year with a topline data readout from the comparable base in Q3 of 2023.
The results of the proposed pilot phase were published in February and foot and ankle surgery.
<unk> from this study concluded that subject showed significant and durable improvements in pain over the 12 month follow up period, which the author stated is indicative of lack of neuroma reoccurrence.
Subject to reported opioid used for pain treatment before surgery had discontinued used by three months post surgery.
In addition, subject showed significant and clinically meaningful improvements in quality of life measures.
The authors further concluded that while the study population had neurons in the foot. The procedure has applicability for neuroma and all other areas of the body.
Also with our <unk> nerve cap, we initiated a new study for large diameter nerve caps called Reposed X L.
This pilot study focuses on a line extension of Axa Gardner of cast with diameters from five to seven millimeters. This study is currently enrolling.
Marketing our products with a solid foundation of clear high quality clinical evidence is a prairie.
And we believe that our growing collection of meaningful data publications is the most comprehensive in the area of peripheral nerve repair.
As of the end of the quarter. We now have 188 peer reviewed papers with growing numbers among all our nerve repair applications, including trauma breast oh enough and the surgical treatment of pain.
We remain committed to developing the clinical evidence to demonstrate the safety performance and utility of our nerve repair solutions to support the continued adoption of the accident and algorithm across our full portfolio of nerve repair products.
Moving onto our full year guidance.
We continue to expect our full year revenue in 2022 will be in the range of $135 to $142 million.
This revenue guidance represents 10% to 15% growth over 2021, excluding the <unk> revenue from last year.
Full year gross margin is still expected to be above 80%.
As we noted in our February call, we're being measured in our outlook for the procedure volume improvements and revenue growth in the first half of the year compared to 2021.
But we anticipate a return to more normalized growth rates in the second half of the year.
Our progress this year is meeting our initial expectations and we're confident that we've built the right organization with a solid foundation of clinical evidence that will allow us to deliver sustainable long term growth as the impacts of the pandemic abates.
We continue to view accidents as a long term growth company delivering sustainable annual revenue growth in the high teens to low 20% range.
Now I'll turn the call over to Pete for a review of financial highlights Pete.
Thank you Karen first quarter revenue was $31 million matching the first quarter of 2021, and an increase of 6% excluding $1 7 million of mobile revenue in the first quarter of 2021.
First quarter revenue was negatively impacted by the omicron barrier and related hospital staffing challenges, particularly in the first half of the quarter revenue was negatively impacted by a 4% decrease in unit volume, which was offset by changes in price and product mix.
If you exclude the impact of revive revenue in the prior year units increased by 3% and price and mix combined for a similar 3% impact.
Gross profit for the first quarter was $25 5 million compared to $25 9 million in Q1 and 21.
Gross margin was 82, 1% for the quarter compared to $83 three in the prior year.
Total operating expense in the first quarter increased 15% to $36 $8 million compared to $32 1 million in the prior year.
The increase in total operating expenses was primarily due to increased sales and project related head count.
The return of in person sales team and physician meetings and education events travel and increased professional services spending sale.
Sales and marketing expense in the first quarter increased 16% to $29 million compared to $18 million in the prior year.
The increase was primarily due to the marketing development programs compensation related and travel related expenses from increased sales activity with greater hospital access as.
As a percentage of total revenue sales and marketing expenses increased to 67% for the three months ended March 31, compared to 58% in the prior year.
Research and development expenses increased 9% to $6 $3 million.
Compared to $5 7 million in the prior year.
The increase in R&D expenses reflects increased spending and specific programs, including our efforts related to the BLA for advanced nerve graft and a next generation advanced product.
Product development expenses represented approximately 66% of total research and development spending in the first quarter of both 2022 and 2021 clinical trial expenses represented approximately 34% in both quarters.
As a percentage of total revenue research and development expenses were 20% in Q1 compared to 19% in the prior year.
General and administrative expense in the first quarter increased 15% to $9 6 million compared.
Compared to $8 4 million in the prior year.
G&A as a percent of revenue was 31% compared to 27% in the prior year and that increase was due primarily to increased professional services in the quarter and facilities related costs.
Adjusted net loss and net loss per share was $8 5 million and <unk> 20 per share in the first quarter of 'twenty, one compared to $3 1 million an eight per share last year.
Adjusted EBITDA loss in the quarter was $7 4 million.
Compared to an adjusted EBITDA loss of $1 9 million in prior year.
Reconciliation of these non-GAAP financial measures to GAAP can be found in today's earnings release and on our website.
The balance of all cash cash equivalents and investments 31 of 2022 with $73 $7 million compared to a balance of $93 million at year end.
And that change includes capital expenditures of $5 million related to the construction of our new processing facility in Dayton, Ohio, and approximately $7 6 million related to items, which typically occur in the first quarter of each year, including payment of our annual bonus sales meetings and awards.
Insurance payments.
The $74 million in cash our balance sheet is strong and we expect to end the year well positioned to continue funding our growth while maintaining an appropriate level of cash our annual guidance remains unchanged with revenue of $135 million to $142 million, which was about 10% to 15%.
Excluding the $4 1 million or a buyer revenue from 2021.
The year is progressing well and in line with our initial expectations and we anticipate to return to more normalized growth rates in the second half of the year and we continue to expect gross margins to remain above 80%.
At this point I'd like to open the line for questions.
Operator.
Thank you the floor is now open for questions. If you do have a question. Please press star one on your telephone keypad at this time, please hold while we poll for questions.
Yes.
Our first question comes from Danielle <unk>. Please state your question.
Hey, guys. This is Aaron on for Danielle Thanks for taking our questions and congrats on a great quarter and the Recon result.
I think just starting off Rod you know with the Recon results I was hoping you guys could just frame for us the potential impact this will have on revenue and <unk>.
Where do you expect this study to have the most meaningful impact, but it would be within kind of existing surgeons or.
Potentially help penetrate new surgeons and accounts.
Thanks, so much.
Sure. Thank you, yes, we are.
I'm very happy to have the results and complete the study its an exciting milestone for us So I will break out the champagne and a little bit.
In terms of the impact I think.
Hmm I'll put it that we've talked about in the past about early adopters and middle adopters.
And early adaptors are usually those surgeons, who are are willing to try things for themselves build their own databases, and and and and were certainly the early adopters of the accident algorithm and in many cases of the faculty that teacher nerve programs today.
But middle Adaptors tend to look for more confidence and security of data and that are the experts in front of them have already.
Evaluated that data and so to complete a study like this that with the rigor of our phase III study.
With the independent to the phase III study and level. One evidence I think will bring middle adopters, who have may have been sitting on the sidelines to begin to think about changing their algorithm and I do want to caution. This is not like a pharmaceutical where everybody changes what they're prescribing <unk>.
Turns and it changes all at once I still believe these middle of doctors will trial. So they'll do a few implants, the wait and see their outcomes they'll see how that progresses. In this first segment that they adopt and they'll continue to adopt in this stair step pattern.
But it will help us as we continue to drive penetration in our core are active in core accounts to bring in those not only the second and third surgeon, but many of the other surgeons in the same centers.
Okay, great. Thanks, so much and then I guess, just turning to the quarter and revenue.
If you guys could just talk sort of about the trend that you've seen them in in the quarter, how things are lucky into April .
Jamie by the different areas.
Areas like trauma breast pain, and then just how we should be thinking about the cadence for the rest of the year.
Sure.
Well I'll start and Pete will chime in as we start to talk about the rest of the year, but.
The quarter definitely had challenges.
January was very disruptive to procedures actually in all of our segments. In fact, if I look at our more elective procedures, we had a near shutdown of those procedures at points in the month of January and that's because these elective procedures like breast and oral maxillofacial.
<unk> are very both elective, but also resource intensive their inpatient procedures that long all our procedures and our and we saw a significant disruption of those now I'm happy to say that as the quarter progressed I'm, obviously, COVID-19 hospitalization went to a much much more manageable.
Levels, but hospitals are also beginning to manage their staffing challenges and we're able to open up even these inpatient procedures as well as bring back procedures like some of the trauma procedures that sort of dispersed into community in ambulatory surgery centers to try and allow some of those to even occur where hospitals didn't have the capacity or.
The capability to do it so we saw things improving each month in the quarter and each of our segments got better.
As we went through the quarter and again as we ended the quarter. The breast reconstruction sites were up and are starting to do surgery again.
Oral maxillofacial program with back to doing surgery again, and we were seeing a rebound in the surgical treatment of pain as well as trauma and Pete when I'm talking about going forward yes.
We're happy with.
The way things came out for the quarter, we had in our guidance at year end. We suggested that we thought first half growth would look like low to mid single digits in the first half and then.
A return to more normalized growth in the second half of the year.
<unk>, 6% growth here in the first quarter.
Would continue to take that same measured approach here.
Second quarter.
And we'll just.
Just.
We're off to a good start we've got lots of optimism about where the businesses.
Continue to be measured here in the near term and then a return to more normalized growth in the back half.
Okay, great. Thanks, so much for taking the questions and congrats again.
Thanks.
Okay. Our next question comes from.
Frank Please state your question.
Hi, guys. Congrats on the on the compelling data on recon and a nice quarter I hope, you're all doing well.
Just two quick ones for me.
TB.
The recon retail question I'm wondering if there is an opportunity.
With the headline data here early on in the year or two to sort of use that as part of your your marketing plan or if there's an opportunity there to oh.
Mr bolster sales for the back half of the year.
I guess, that's one and then second I'll just ask my second one now and Pete I think you gave some guidance on on the cadence of margins for the balance of the year the call accidentally dropped on me.
You can you can restate that that would be extremely helpful. Thanks guys.
Well.
So I'll start with the recon data, we're very excited about it in fact, we have a little bit later tonight. The rollout with the broader investigators were the lead investigators will be presenting the data and reviewing it with them and I think it will create some.
Positive scientific discussion that won't happen amongst the investigators and amongst their peers.
We fully expect that this will be data that will be compelling and interesting.
I can't guarantee it because it's not within our control I expect it will be discussed and presented at some of the upcoming hand conferences later this year.
Again, given the rigor and level of evidence it is truly unique in this area and so I I I know that surgeons are excited to talk about it and hopefully it will be something that'll be a major part of their agenda.
And then as the paper comes out which will certainly follow all of this then the reps will be able to provide that as additional scientific evidence in in their discussions.
So absolutely it's something we plan to talk about we plan to continue to build on but of course, we're going to do it in the rigors of good clinical evidence.
Yeah.
Yes, what I had mentioned was that.
We just reiterated our guidance that margins will continue to be above 80%.
Great. Thank you guys I appreciate it.
Yes.
Our next question comes from.
Ross Osborne please place your question.
Hi, congrats on the quarter. Thanks for taking my question.
I guess sticking with gross margin quickly.
And its obviously still above 80%, but are there any headwind or tailwind you would highlight that occurred during the quarter that maybe we should be thinking about for the balance of the year.
No look I think we've had our margins have been sort of in the low eighties.
And they've moved around a bit.
From quarter to quarter, just with changes in the pace of.
Manufacturing or processing throughput.
Just normal ups and downs of the manufacturing process, we're comfortable with.
Margins continue to be an historical ranges.
Okay, Great and then one more on the sales.
Sales and marketing side of things would you just remind us the direct to patient educational campaign, you guys have on gambling.
And then as a follow up could you share any quantitative measures on your resignation or rethink pain, maybe its website add or if you've seen any changes in traffic.
Youre started.
So first met the outreach that we have the education activities, we look at educating both consumers and surgeon so on the surgeon side.
We have always educated 75% of the hand, and microsurgery Fellows of course during the pandemic, we had to go to virtual education.
Which you know was good but it is never as good as these hands on programs in the fall of last year, we were able to return back to in person education. Both for both for <unk>, but you also have a separate program little different targeting on an on the level of information provided to attending.
In fact, I just came from one of these programs in Atlanta and Surgeons are frankly, just super excited to get back together and talk about an important topic like nerve repair.
We see very.
Good adoption.
We see very good initial trial and then progressed adoption.
From the surgeons, who attend these programs, but it really starts with an education that they're not very not promotional they're very much on the techniques and principles of nerve repair and when you go through that you step back and it's logical and clear why we have developed the algorithm and portfolio that we have is that it answers the needs.
Surgeons have as they go into these different types of nerve injuries, and so we find that a very helpful and impactful.
Process to help surgeons and think about what theyre doing be confident in what they're doing and expand them expand their work and of course, we can will help to continue to support that on the patient side much of what we try and do is actually just increase awareness patients don't think anything about nerf and they don't know that nerves are cause of either a problem or.
Or a quality of life impact that they have so what we found with breast reconstruction and we're applying some of that learning now into the surgical treatment of pain, we've been doing the breast reconstruction work with patients for about four years.
The patients were unaware that when they had a breast reconstruction that they would likely be numb and it was just something that wasn't discussed we found a real gender difference and even the way they talked about it after surgery with their surgeons and that if they had a female surgeon. It was one of the top things that they would bring up and talk about them now.
You know what's happening here why don't I feel anything and they almost never mentioned it to their male surgeons and so what we were trying to do in our education program has raised awareness before the surgery to say if sensation is important to you then ask your surgeon about it upfront and open up that dialogue and then we also provided them access to tools that.
Explain a very simple way what nerves are why it makes a difference we had ah patients tell their own story, there's little videos of patients talking about sensation and what it meant to them to be able to hug their baby and feel the baby's that's an important characteristic that women identify with and what we found and it has.
<unk> greatly increase the number of patients I hear this anecdotally I guess I don't have a good measure for this but anecdotally I hear from many surgeons, how often now patients walk into their breast reconstruction discussion and say.
Sensation is one of the things in their lives. They ask I want to understand what my sensation outcomes could be do you do.
Sensory reconstruction and if not who does and so we see anecdotally that it's become a much bigger topic I don't at my fingertips have the click throughs of the number of subjects that we get through the website, but we do have if they go on the website. There is a surgeon locator that they can click through and find a surgeon who.
Does the recent station work again rethink pain is at a much earlier stage, it's a little more complex because pain is multi factorial and we're trying to help patients identify whether they have nerve pain or something else that they need to see a pain specialist on.
I can say initially that were quite pleased with the initial traffic we're getting on the rethink pain website, and and we hope to continue to learn and expand on that and help refer those patients to a surgeon who can help them with their chronic pain problem.
Sounds great. Thanks for taking my question.
Yeah.
Okay.
One on your telephone keypad at this.
Our next question comes from Dave Parker line. Please post your question.
Thanks Congrats.
I want to congratulate Ted for coordinating the first quarter results with the top line release.
Got it.
I will now.
Okay.
[laughter].
Karen can you remind us.
I may have missed this but how many advanced grabbed some conduits.
Or treatments in total were in the the.
The recon study.
So the enrollment was 220 subjects.
Okay.
And that's the number of nerve.
Repairs that there were as well.
Yes, so we evaluated only one nerve injury per patient some patients might have had.
More than one nerve injury, but the protocol was written to address that so no patient is included in the study twice, they're only in the study one.
Got it.
When you look at the algorithms.
<unk> views the conduits.
Collagen tubes, and the like right.
Right.
He indicated specifically for certain length of gap.
Where are they most commonly used.
Yeah, great Great question. So historically conwell conduits have an indication of up to 30 millimeters and I say that there's some variation with some brands, but they're typically in the up to 30 millimeters.
That is actually still the exam question or surgeons as they come out of there.
Hum program at the furlough and move into being an attending one of the questions is what is the appropriate gap lengths for conduit and it still says up to 30 millimeters.
We have said from even the prior data that that was a.
Generous to a fault to where they were shown to be effective and that was the point of this study is to help them be able to demonstrate that a advance is and appropriate treatment for nerve repair and I think we've clearly demonstrated that with these results but to also demonstrate that there is the conduit perform.
<unk> decreases as the length increases and that's what we saw in this study as well.
Got it.
And I guess.
Clearly you wanted to hit the primary endpoint and then when you look at some of the other.
David I guess I would just love your thoughts on.
We all know they're good but.
The return of function in the 12 millimeter the time to recovery of the three months and the 10.
And the pain Delta.
Which was the most surprising to you or which do you think is the most powerful in terms of secondary observations.
Well I see those as two separate things and I'll look at my friend, Eric <unk> to see if he has any additional comments, but I guess.
We fully believes and expected that advance would be superior and these longer lengths and we were used.
Can you just you were able to demonstrate that.
I think the thing that was probably more surprising and it's just a finding that helps us solidify things that I've heard surgeons talk about they give us data was in the safety side of looking at the persistent pain.
And the difference between conduit and in advance and these are patients that.
The pain is not letting up to them.
Unresolved may very likely be some things that will result in a revision or this will be an impact on their quality of life going forward.
And this is a hard thing to study.
Something like a registry because it needs a very rigorous and consistent way of asking about the pain and following up on the pain and then a registry study is just hard to be sure that you have that so well anecdotally I've heard surgeons talking about this.
We are pleased to be able to see this type of data is something we'll dig into a little bit more because we really think it's impactful for surgeons to understand that.
And then interestingly the returning normal sensation up to three months earlier I E.
I think there's a good scientific explanation as to why it does that but we have not seen that in some of our previous results again. It takes a study of this type of rigor and structure to be able to pick up a trend like that and three months as you know that's pretty meaningful.
To be able to get back to normal sensation that much earlier.
No I agree and maybe if I could slip.
One last one in for your colleague the pain, one I mean.
I know it may be too early to answer this but is there any sort of.
Reasoner.
Obviously, we know would have to answer the first one.
Collagen is but.
Why that would be the case like initial thoughts on why that would be so.
When you look at the mechanism of how conduits support regeneration.
Let her what's on the inside it's still relies upon a vibrant matrix, forming and filling that tubular structure and that doesn't have the organization and the alignment that you're seeing something like a nerve allograft.
Active laminin scaffolding it organization inside advanced nerve graft. It provides the structure to support regeneration across versus the disorganized regeneration you see inside the tube and then disorganized regeneration, if it's incomplete or if it's.
Is sub optimal.
Disorganized regeneration resulted in essentially neuro learned romo like pain, and if that becomes symptomatic you detect that and that's.
And unfortunate and unfortunate impact on the patient's quality of life. So if you look at how these products work and that the importance of that active laminin scaffolding that makes a huge difference in how the nurse regenerate.
Disorganized regeneration of these manufactured tubes leads to then potentially leads to this greater risk of seeing the set of chronic pain.
Mike I appreciate it thank you.
Okay.
Okay that was our final question I'd like to turn the floor back over to Cameron for Barry for closing remarks.
Thank you well I believe we're off to a solid start this year and we could not be more excited about our recon achievement announced today I am proud of all of our members of T. Maxygen, who remain committed to our mission of improving nerve function of audit of life for patients with peripheral nerve injuries I want to thank everyone for joining us on today's call and we.
I look forward to speaking with you in the near future.
Thank you. This concludes today's conference call. We thank you for your participation you may disconnect. Your lines at this time and have a great day.
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