Q1 2022 PAVmed Inc Earnings Call
[music].
Good day and welcome to the Penn met Inc. First quarter business update call. Today's conference is being recorded and now at this time I'd like to turn the conference over to a J Miller. Please go ahead Sir.
Thanks, operator, good afternoon, everyone. This is Adrian Miller, Vice President of Investor Relations at patented thank you for participating in today's business update call. Joining me today on the call is Dr. Alicia Eclogue, Chairman and Chief Executive Officer Padma.
Along with Dennis Mcgrath, President and Chief Financial Officer, Pat made the press release announcing our business update and financial results will be posted shortly on patent on its website.
Please take a moment to read the disclaimer about the forward looking statements in the press release the business update press release and this conference call. Both to include forward looking statements and these forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the statements made.
Or is that could cause actual results to differ are described in the disclaimer and in our filings with the SEC.
For a list and descriptions of these and other important risks and uncertainties that may affect future operations see part one item one eight entitled risk factors in pad in its most recent annual report on Form 10-K filed with the Securities and Exchange Commission and any subsequent updates filed quarterly reports on form.
10-Q in Susquehanna.
Subsequent form 8-K filings, except as required by law <unk> disclaims any intention or obligation to publicly update or revise any forward looking statements to reflect changes in expectations or in events conditions or circumstances on which these expectations may be based or that may affect the likelihood that actual results may differ.
From those contained in the forward looking statements.
With that I'd like to turn the call over to Alicia Eclogue DUC backlog.
Hey, Thank you Adrian and good afternoon, everyone and thank you for joining our quarterly update call.
To report that <unk> and its subsidiaries are making solid progress as we continue driving our long term.
And mission to create a leading diversified medical technology company.
Before proceeding I would like to thank our long term shareholders.
Your ongoing support and commitment our combined team has grown to over 100 employees in a singularly focused on growing the pattern with enterprise, while enhancing long term shareholder value.
Our balance sheet remains strong providing us with the resources to execute this strategy give.
Given the current market volatility, we're particularly focused on deploying our capital as efficiently and effectively as possible to accomplish our strategic goals, while preserving and extending our cash runway.
I'd like to start by providing a business overview of our business and will then pass the baton over to Dennis who will provide our financial update before opening it up to questions.
First some background there and patented patent had as a diversified commercial state commercial stage medical technology company operating in the medical device diagnostics and digital health sectors. Our mission is to utilize state of the art technologies in the service of patients by providing innovative and disruptive products and solutions, which significantly improve or save lives, while enhancing health care quad.
Woody.
ANSI and cost effectiveness, our vision is to build a growing and profitable diversified medical technology leader across all the three major sectors.
The patented enterprise today consists of two majority owned subsidiary since the diagnostics compare yourself to business units carpets and that slowed down in the R&D pipeline products at various stages of development loose.
Lucid is a NASDAQ listed commercial stage cancer prevention medical diagnostics company, which markets E cigarettes, so check the first and only commercial tools for widespread early detection of esophageal precancer to prevent esophageal cancer deaths patron ita owns approximately 76% of lucid as outstanding shares.
Various health is a privately held digital health company developing the first intelligent implantable vascular access port with biologic sensors and wireless communications to improve personalized cancer care through remote patient monitoring patent owns about approximately 81% of embarrassed as outstanding shares.
Tablet operates as a central engine, which provides a broad range of shared services to its subsidiaries and business units as well as to what the R&D team.
These include General Administration finance product design and development regulatory affairs quality management clinical research manufacturing and medical Affairs.
Centralized shared services model allows each of the subsidiary.
Each of the subsidiaries and business units to be laser focused on the development and commercialization of clinical evidence for its product or products.
The model provides numerous benefits to facilitate value creation across the enterprise, including economies of scale risk mitigation through diversification of lower cost of capital and much greater growth potential operator could you give the other participants real quick.
Thank you.
During the past couple of years, especially in 2021, we have undergone a major transition focusing on expanding our internal human systems and physical infrastructure laying the foundation for commercial success as well as optimizing and rationalizing our portfolio.
We believe this transition is essentially complete the expanded infrastructure is mostly in place and we're now entirely focused on commercial expansion and execution reimbursement and revenue growth in the coming quarters and years lapped.
I'll now proceed with an update of our subsidiaries' business units and R&D pipeline, starting with lucid, which remains patlex dominant business my.
My discussion of lucid will be a distillation of my remarks, yes during yesterday's lucid call with the focus on the updated <unk> guidelines Isa card commercialization laboratory operations and reimbursement.
I would encourage you to read the transcript or listen to the recording of the lucid call for additional details and feel free to contact Adrianne contact Adrian to help with this.
So as we previously announced the American College of Gastroenterology recently updated its clinical guidance guideline on the diagnosis and management of myself to a pre cancer. The first touch updates since 2016.
For the first time, the guideline endorsed as non endoscopic biomarker screening has it alternative is acceptable as an acceptable alternative to costly and invasive endoscopy used to guard and he said check which are described in the guidelines are currently the only such not endoscopic biomarker biomarker screening test.
This is an exciting development for lucid I can't over emphasize its importance and supporting our efforts to eradicate esophageal cancer.
Our east to guard commercial commercialization effort efforts are going well, we continue to see excellent traction with robust growth in E. Cigarette testing volume, we processed 533 commercial use of <unk> tests in the first quarter of 2022 that represents a 76% sequential increase from the fourth quarter of 2021 and a nearly 500%.
Kris annually from the first quarter of 2020.
Testing volume growth was strong in both sales channels primary care physician referrals to our lucid test centers as well as test performed at Gastroenterology.
Oh forget surgical specialty practices and institutions.
We are investing in sufficient sales infrastructure to demonstrate clinical utility of generate claims.
To support our reimbursement efforts once reimbursement is more fully established we will transition to full throttle efforts to drive testing volume and revenue growth.
Our sales team continues to grow and now consists of a national VP of sales three area directors six market development managers in 17 sales reps.
As well as several sales operation staff, we are hitting our hiring targets and seek to have new reps operating effectively looking about four months apart.
Our expanding network of lucid test centers support our primary care channel by providing a facility where patients preferred freezer guard testing by primary care physicians can undergo the Isa check cell collection procedure.
Sensors had very modest fixed costs at attractive margins operating almost entirely as marginal variable cost businesses.
The Lucid Test Center program completed its first stage during the first quarter of 2022 and now cover seven Western U S. Cities. We recently launched our stage two of our Lucid Test Center program. We plan to open test centers and nine additional states. This year last month, we hired a director of clinical services with extensive operating experience with dialysis facilities to oversee the six.
Spansion.
We also do continue the pilot of our Isa Guard Telemedicine program, which we launched in December although patients in any lucid test Center city can access to telemedicine program. We're only actively pursuing a direct to consumer advertising program on a limited pilot basis in Phoenix consistent with the near term the strategy that I previously described.
The first quarter in recent months have been full of important developments in our laboratory operations, which are critical to the future success the company.
At the end of February Lucid Dx labs, a wholly owned subsidiary of lucid diagnostics.
<unk> acquired the assets necessary to operate our own CLIA certified cap accredited clinical laboratory in Orange County, California last month, we hired a new VP of laboratory operations with nearly two decades of clinical laboratory leadership experience and we plan to accelerate the transition from the current management services agreement to the lab being fully staffed by lucid employee.
Yes.
In parallel with the acquisition, we upgraded to a new revenue cycle management provider for the first and for the first time, a lucid entity will be billing directly for Isa Guard testing claims submissions have been on hold since we took over the laboratory awaiting license transfers and getting the billing the new billing partner online. So the transition from fixed monthly payments from our.
Former laboratory partner to direct billing with will result in a temporary pause and out of network receipts and recognize revenues as Denis will describe in more detail.
That was brief update on where we stand with reimbursement on the private payer side, we executed our first commercial payer agreement lucid Dx labs entered into a part participating provider agreement with met increase health plans and Nashville directly contracted multi specialty P. P O provider network with over 8 million lives covered through with clients and payers.
The effect of payment for E cigarette under this contract which is based on a list price of approximately $2500 is consistent with our goal of protecting the effective Medicare payment of just over $19 million.
In parallel we continue to collect clinical utility data demonstrating that E cigarette positively impacts medical decision, making which is necessary for us to secure direct in network coverage from regional and National Health plans.
We have also seen progress on the Medicare reimbursement front last month Medicare contractor Palmetto GBA is multi X program published a proposed foundational local coverage determination or LCD for test designed to detect upper gastrointestinal pre cancer and cancer.
We've been patiently awaiting this important next step in the process since we received our final Medicare payment determination.
Back in January of 2021.
The proposed LCD outlines criteria that mold ex expects.
Upper Gi pre cancer and cancer molecular diagnostic test to meet it is important to emphasize that the provisional LCD was published prior to the publication of the updated ACG guidelines and as such does not take into consideration the recommendation supporting nine endoscopic biomarker testing such as easily as an acceptable alternative to endoscopy for yourself.
Pre cancer screening.
Location of the proposed LCD triggers our written commentary that extends until this Saturday, we along with multiple other stakeholders will be submitting comments, suggesting important modifications to the proposed LCD multi.
<unk> also held a substantive OPE open meeting.
Yes, two days ago during which we along with stakeholders and other interested parties had the opportunity to address the proposed LCD.
In addition, we recently learned that Meridian health care solutions, the Medicare contractor, which covers lucid Dx labs and pursuit participates in the multi X program is scheduled its own. The open meeting on May 26, and a written common period that extends through June 11th we look forward to the opportunity to address the proposed LCD directly with meridian as well.
L C D will not be issued until the.
Until the Medicare contractors have had the opportunity to assess and consider these comments.
Let's now move onto a pad minutes other majority owned subsidiary various health there.
<unk> was launched a year ago as a firm.
And to the dynamic and rapidly growing digital health sector.
Medical technology sector is in the midst of a digital health Revolution, which includes smart and connected devices and an intense focus on data analytics, including artificial intelligence and machine learning.
<unk> is developing a remote cancer care platform that integrates and intelligent implantable <unk> vascular access device with physiological sensing software with symptom reporting and telehealth functions and advanced data analytics. The various technology is designed to allow oncologists to detect early signs of common cancer related complications provide long.
Or too little trends, a physiologic and clinical data offered data driven risk management tools for precision oncology and incorporate additional.
Prospects for substantial value creation through data monetization and biotherapeutic clinical trial support the.
The technology contains our biologics sensors compare are capable of generating continuous data on key physiologic parameters that are known to predict adverse outcomes in cancer patients undergoing treatment wireless communication of the patient smartphone and it's cloud based digital health care platform.
Well, it efficiently and effectively deliver actionable real time data to patients and physicians. The various business model is based on software as a subscription service that leverages existing reimbursement codes for remote patient monitoring.
First is advancing its mission on three fronts software device and data with the help of a world class technology and medical Advisory Board.
We are also working very closely with Microsoft as a member of its global partner program. Our team is actually traveling to Microsoft headquarters next week, and we look forward to further strengthening what had been a very productive relationship.
The first name is growing in anticipation to our first commercial launch in anticipation of excuse me. Our first commercial launch late this year, we've hired of Arris, Chief commercial officer with extensive experience in the oncology sector. We're also building out our data and analytics team with four new hires as we see it as we seek to establish strong in house expertise, including an artificial.
<unk> and machine learning I should note that consistent with our shared services model the data and analytics expertise will be available across the enterprise, including exciting research using genomic data analysis and future generations that we so far.
On the software development front, we're making excellent progress on the three interconnected software platforms, namely a patient smartphone app designed to communicate with and intelligent implantable monitoring device, a cloud based software platform to which the patient Pap uploads its data and provide the oncology team with the clinical data to facilitate patient.
Care and a smartphone app for the team to engage with the client base platform.
As I previously noted we have split this work into three parallel projects designed to give us the best opportunity to effectively navigate the regulatory landscape.
What we're referring to as various solar combines the SAP software platform with existing wearable and connected medical devices. This will allow us to launch the first commercial product and get valuable initial real world experience with the software platform and engage with early adopters were on schedule to launch very various solas later this year.
First mercury adds our own implantable monitoring smart device. The device will include all of the first generation biosensor features contemplated but will be as a separate device that will be implanted alongside a traditional port by separating the device from the port we expect to be able to leverage existing implantable monitors as the predicate and proceed down the FTE.
Is five 10-K pass very happy with the progress on the design and development to date on various mercury.
Secondly, animal lab scheduled in the coming weeks to test the latest prototypes and we are targeting submission of a launch in 2023.
Finally, various Venus well offer the fully integrated intelligent basketball access port utilizing many of the same components are the biggest market. It's very smucker excuse me, we will seek to advance this product through the Fda's de Novo pathway.
The new regulations for the integrated vice will be less onerous and could allow a classic your first strategy for the fully integrated intelligent vascular access port.
The design and development work on various Phoenix is also progressing well because the device won't need it doesn't need to mimic the full ECG recording features of the various mercury predicate device will be able to achieve multiyear battery life.
Smaller form factor and are really very excited about how this project is shaping up.
Let's move onto Carb X a carb X is our FDA five 10-K cleared minimally invasive device to treat carpal tunnel syndrome.
Capex continues with its limited commercial at least utilizing early adopter key opinion leaders really are no major updates from our call six weeks ago as I explained that we had clinical cases on hold wildly implemented product improvements that were derived from the experience of U S. Surgeons to date, the first set of product improvements, including addressing an electrode coating manufacturing.
Factoring issue have been completed and we now have commercial product just recently back on the shelf that we have.
Restarted cadaver training labs in our schedule on cases with this cohort of trained surgeons.
As previously noted subsequent product improvements are also slated to be completed later this year at which point, we should be in a position to expand commercialization more broadly and as I introduced last during the last call. The development of our next generation Capex device that incorporates integrated ultrasound imaging is progressing well with target FDA submission in 'twenty two.
Three.
So lots of excellent next slow as a platform infusion technology the first product.
The first product incorporating as our next slow intravenous set which seeks to revolutionize care by eliminating the need for a complex expensive and error prone electronic infusion pumps for most of the 1 million infusions performed in this country. Each day as I noted in our last call. We had re initiated pre dv testing prior to FDA submission after addressing.
The manufacturing issue through a smart redesign pre divvy testing since that call demonstrated good flow regulate could flow regulation, but the repeat ability day that fell short of our targets are the team is in the midst of a comprehensive root cause analysis.
On repeat ability and exploring several we design options to improve we could repeat ability. Once this work is complete we'll have a better understanding of how it'll impact timelines for FDA submission and commercialization.
And just a few comments on our other key products in our R&D pipeline.
A lot of not a lot new to report since the last update six weeks ago Port Port I O. R is our implantable interosseous vascular access device.
We believe that port I wish does not require a flushing as the first maintenance free long term vascular access device tornados in the midst of its first in human clinical study in Colombia, South America with four successful implants at one site three additional sites have been approved they will be trained and began enrolling patients next month. We're also.
Working with our partners in Europe to pursue a European study.
To support EU, CE, Mark clearance and provide additional human data for U S approval.
M. R E secure device is.
Designed to endoscopic treat esophageal pre cancer and it is also progressing well based on head to head chronic animal studies completed to date and the histology thereof. We believe secure compares favorably to electronics market leading parents device.
Current work is focused on optimizing the dose response in the design and development.
Finally, we continue to have active discussions.
On business development opportunities, especially in the smart device space and we'll provide updates as the opportunities flush out.
With that I'll hand, the reins over on to Dennis to provide an update on our financials before proceeding with a more comprehensive as before proceeding to questions excuse me Dennis.
Thanks, John and good afternoon, everyone. Our preliminary in summary financial results for the three months ended March 31, 2022 reported in our press release that was recently published and we plan to file our quarterly report.
For pad met on Form 10-Q, with the SEC on Monday may 16th and at that time, it will be available at SEC Gov and on the <unk> website.
Tests performed and revenue recognition as we outlined during Loosest earnings calls rule used to guard tests performed are recognized as GAAP revenue when cash is actually collected by the company. As also previously mentioned this will more than likely be true during the transition period of negotiating third party private payer reimbursement contracts and related.
Coverage policies.
As I reported to you in previous quarters for compliance purposes. During this reimbursement transition period, we can negotiate it a short term month to month fixed payment arrangement with the contract laboratory that was processing. The Isa Guard assay was performing the insurance company billing and collections function.
This commercial agreement became effective on August one 2021 and terminate it concurrently with the opening of our own lab on February 25th.
We recognized 189000 of revenue was part of the Isa Guard commercial agreement with research Dx for the partial period from January one through the end of the agreement on February 25th.
March represented a transition period that included the hiring of new revenue cycle management provider hence.
Hence so we had a record number of Isa <unk> tests performed in the month of March we did not bill for any of these tests during the month.
Therefore, the recognized quarterly revenue of approximately 200000.
Reflecting the pro rata amount of the previous commercial revenue agreement with research Dx or otherwise 100000 for the month of January 89000, representing 25 of 28 days in February .
As a reminder, now that we're operating our own lab. Following the February 2022 asset purchase agreement will be able to directly bill payers.
As Lisa described direct billing will occur in the second quarter once our new revenue cycle provider.
It comes online in the coming days future revenues will be recognized based upon actual collections until such time as the coverage policies are in place with CMS and payment contracts with private payers is obviously can result in the timing of revenues recognized for some timing there submitted for third party reimbursement until these future conditions are all net.
The gaps in claim submission from this transition will impact near term GAAP revenue recognized until the system catches up with the claims for the tests performed during the transition. These will all be filed for payments.
But the timing of collections could be elongated because of those issues.
It is our expectation that we will begin to recognize GAAP revenue related to our lucid labs in the second quarter as mentioned and will be adjusted based upon actual collections received the number of Isa Guard tests performed and submitted for payment are provided in the press release and as discussed earlier by Alicia Obviously, we're in the early stages.
For our commercial launch, particularly with our test centers will continue to evolve our reporting metrics as various sales and marketing efforts further influence adoption, particularly with the ramp up of our lucid test centers and our Isa Guard telemedicine program in cooperation with up script.
Presently there are now four banking analysts of issued coverage on pad that the others doing their diligence the.
The quantity of east to Gar tests payable at the CMS rate required to meet the 2022 revenue estimates provided by the analysts are achievable.
Quarter, the quantity and collections are highly dependent upon the involved the evolving reimbursement landscape.
So the consolidated three months results.
Just provide some summary comments on Padma and follow with similar comments on lucid diagnostics as a standalone.
Pat Med remains lucid controlling shareholder holding approximately 73% of the voting interest of lucid lucid operating results will continue to be consolidated into <unk> financial results.
The statement of operations will reflect a line item to show the noncontrolling interest of profits or losses to non patented shareholders of its majority owned subsidiaries as.
As well there will be a corresponding offset in the equity section of the balance sheet for amounts attributable to minority interest equity. This methodology is unchanged as a result of the IPO will continue to be applicable as long as <unk> remains the controlling shareholder.
With regard to revenue.
Recognized approximately 200000 of revenues related to the east to garden for the first quarter ended March 31st despite.
Despite the negative gross profit for the last quarter.
Which reflects the initial test centers startup related costs.
At modest volumes incremental gross margins can be around 90% and contribution margins north of 60%.
Two comments on operating expenses.
During yesterday's lucid earnings call, we discussed the three components that make up loosens operating expenses, namely sales and marketing general and administrative and research and development.
Since lucid operating expenses represent more than 60% of patents consolidated operating expense for the first quarter will summarize the consolidated operating expense.
For the three months ended March 31st.
Admits consolidating operating expenses were $19 3 million compared to $8 1 million during the same period in 2021 with.
With 83% of the net increase attributable to compensation related to head count increases stock based compensation consulting services development costs, particularly in the clinical activities and outside professional services.
There is a table in the <unk> press release published earlier.
And the lucid press release published yesterday.
But adjust each of these three components of operating expenses for the embedded noncash stock based compensation expense.
Without including the stock based compensation operating expenses for patent it were $11 7 million inclusive of $8 2 million of lucid opex.
Net loss per share.
<unk> reported first quarter net loss attributable to common stockholders of $16 9 million or a loss of <unk> 20 per common share.
A loss of $9 4 million or 13 cents in the first quarter of the earlier the previous year in 2021.
The press release provides a table entitled non-GAAP , which highlights these amounts along with non cash charges, namely depreciation stock based compensation and acquisition related costs to enable better understanding of the company's financial performance.
You'll notice from the table that after adjusting the Q1 loss by approximately $5 2 million for noncash charges. The company reported the non-GAAP adjusted loss for the first quarter of 'twenty two of $11 7 million or 14 cents per common share.
I have met had cash had consolidated cash of $64 7 million as of March 31st.
Which compares to $77 3 million as of December 31st.
The cash balance does not include approximately $24 5 million of net proceeds from the convertible debt financing announced in early April .
And so on a pro forma basis had the financing occurred prior to March 31, cash would've been nearly $90 million.
Thank you for your attention and with that operator, we can now open the call up to any questions.
Thank you.
He would like to ask a question. Please send them a pressing star one on your telephone keypad.
Youre using a speakerphone. Please make sure that your mute function is turned off to allow you signaled touchette equipment.
That is star one if you would like to ask a question.
And we'll take our first question from Ross and I was born with Cantor Fitzgerald. Please go ahead.
Hey, everyone.
Right.
Maybe starting off with the Nextgen cortex, offering with integrated ultrasound, Yeah. What do you think ultrasound unit adoption rate card bag.
Is that.
Many many more patients to be able would've been a benefit from that or is it simply enhance the attractiveness of the device.
Yeah, I think I would say more of the latter I think from what we've been.
What we've seen in the working prototypes of day that it's really sort of pretty spectacular and that while you are.
If you recall the way <unk> works it has a balloon.
That creates the space and pushes the critical structures away such that it will be.
Ligaments and nerves and pension the ligament and positioned the electrode ligaments to cut them from the inside out and with with integrated.
Intraluminal ultrasound you can see all of that.
So it's it's really to facilitate the procedural simplicity to give the physician confidence.
But where the anatomic structures are and we think you know we think it'll be a big big step forward in procedural.
Interval enhancing the procedure.
Okay great.
And then on <unk> I think last time, we spoke maybe three Asia had abandoned plans and it sounds like maybe a fourth at this point on the kidney care about.
Any feedback from the fourth patient.
Yeah, no so far but so far so good and well we're looking for it as I said, two two increasing enrollment with the play a little wants to have multiple sites and.
The.
There would be approval for the other three sides have now been.
Completed and next month, we'll train those three sites and get them.
And get them starting to evolve.
Okay got it and then maybe it lots of line I guess on <unk>.
Operating expenses can you just talk about a specific that have Matt you know what you saw during the quarter and kind of how we should think about that.
That for the rest of the year that'd be great. Thank you.
Yeah sure thing so.
The first quarter.
When you look at the stock based compensation expense that probably is a consistency through the balance of the year.
And the level of expenses that you see is probably a pretty good baseline for the year.
We'll be increasing some head counts, particularly at the at the lucid level that will increase that as Lisa pointed out on the.
Direct to patient advertising for lucid that would probably be a very limited expansion and really will be a.
Paralleling what happens on the reimbursement front.
The G&A is probably fairly stable between now and then at the end of the year and the R&D expense, which is influenced by our clinical trials.
Probably is a good baseline as the year unfolds a.
We are making some changes to our clinical trials focusing on clinical utility because of the short term wins with reimbursement and stretching out our PMA our expenses over a longer horizon. So you won't see quite the spike that was initially anticipated maybe six seven.
Months ago, when we were thinking about the year related to it.
Got it thanks for taking my questions and congrats on the progress.
Thanks Ross.
Thank you we'll take our next question from Anthony Vendetti with Maxim Group.
Good afternoon, Anthony Hi, This is actually Jeremy on the line for Anthony.
Hey, Jeremy.
So just two quick questions on the lucid test centers.
I know you have nine the second stage of nine centers planned to open up at the end of this year. It's already you know they have seven months left of that or any of those centers opens or you know it is and what can you give us like what's the timeframe for when you choose the center how long does it take to get that up and running.
Oh, great. Yes. So this is maybe a good opportunity to kind of put a reminder, in the past that there when he talked about test center expansion, we're really talking about.
About sales.
Rep expansion, primarily right the test centers out there really to support.
The sales reps M D. As I've mentioned on previous calls the rate limiting factor is usually hiring reps not actually finding a location of hiring nurse practitioner of that being said what's different about this stage is that we're doing it all at once.
And the first phase we did it in three tranches are Phoenix and then two then three centers in two different two different moments. We had now we're branching out simultaneously across all nine states we've identified them.
The actual place.
Place within the Metropolitan the extra Metropolitan area.
And we have started the process of hiring reps and identifying locale. So we are you know the ramp in terms of the sales reps that we have we had said last.
Call that we anticipate tripling by the end of the year in a fairly linear pace.
You know we have a bit more perhaps this year I would say it would be more like double between now and the end of the year and so that should give you a reasonable trajectory. It's not again, it's what we're looking at all of them at the same time, there's one other difference, which I did mention on the lucid call yesterday, which is that in some of the cities that we're targeting in this stage, we actually already have.
Present.
With the market development managers and reps already calling on Gastroenterologists. So those will move more quickly.
For example, we have a very effective rapid and.
And the Orange County in Southern California, and I'm one of the locations.
And to open a test centers actually within the Coca Cola the longer when we said that class.
And that also applies in other locales in Ohio, and elsewhere, where we have them already have a fairly strong presence so that will accelerate some of those time on it.
Okay, great. Thanks for that and then just one last question also regarding the test centers.
And Brandon this quarter is there a is there an internal goal do you have that her test center was that spread out evenly over the type of centers that are currently operational and you know what something that even if theres a person is that fair.
Level, where if it's not the test centers not hitting that you'd sort of pulled offline. Yeah. So let me let me let me again use this as an opportunity to pick up you know.
I think.
Make.
Make it clear that the perception that the test centers are sort of like you know stores.
Outlets, where I, where or or facilities, where that are driving the business. I think is something that we need to sort of work on getting people to understand a little bit better. The test center is really just a collection center that allows the sales reps to be able to call on primary care physicians and drive and drive patients. There. So there really isn't when we when we actually start.
Getting more traction there and the team expands we are able to provide more additional metrics. The metrics are going to be traditional metrics. Along you know performance of the sales team not really central focus right.
I don't know if that the bulk of that that that makes sense. So the answer to your question is that we do.
We do track and we do.
Yes.
Our entire sales team is doing and they're held there.
Quite rigorous and data driven and we look for improvement and we look to to make sure that that people are being productive in the regions that we're targeting we don't expect to sort of move away from a particular geographies.
For that I think our numbers in that geography, then we'll look to ways.
Waste to improve sales engagement in that in that territory.
So again, hopefully that makes sense a bit of a nuance between understanding that the test centers are really path of vehicles, where wearable procedures performed in the real action is really happening at the end.
The physician offices with sales reps, calling on physicians in and trying to drive it for us.
Understand okay. Thank you I'll hop back in the queue.
Yeah, Thanks, a lot.
And once again Thats star one if you'd like to ask a question well hear next from Ed Woo with Citi.
<unk> capital.
Yes, congratulations on the quarter, you know with a very strong balance sheet and obviously a lot of volatility in the capital markets out there are you seeing more opportunities of companies with <unk>.
That might be interesting or technology or are interesting for you guys and have valuations come down significantly in the past couple of months.
We are as you know.
We do have an active.
The process one of the things I didn't get a chance to like for like that'd be hired a very accomplished.
Vice President of business strategy, and development will help them be able to sort of focus our activities on the BD side of things as well as broader strategy.
And I wouldn't say that that's it.
Lee you know we're at the point on any of these where we can yeah. We certainly would expect given the volatility that valuations would be would be attractive.
But where were not really none of them are at the stage, where we're really.
Are you able to say that yet, but that's a fair fair expectation.
We are very excited about opportunities that we're starting to see in areas that are synergistic with our current work, particularly in sort of smart device technologies that are done or potentially synergistic with our efforts on the digital side So stay tuned.
So that's where we really are excited.
Excited about some of the opportunities.
That are in front of us.
Great. Thanks for answering my question that I wish you guys. Good luck. Thank you.
Thanks, Ed.
Thank you and that does conclude today's question and answer session I would like to turn the conference back over to Dr backlog for any additional or closing remarks.
Alright, Thanks, operator, and hey, Thank you all for joining us today and for I've always great question. We look forward to keeping you abreast of our progress through news releases appear periodic calls such as this one as always a reminder, the best way to keep up with patent news updates and events is the sign up for E mail alerts on our.
Website, the Investor Relations website and to our followers on social media on Twitter Linkedin Youtube and directly on our website. You can also feel free to contact our VP of Investor Relations hatred Miller at 8-K M. At <unk> Dot com. So again. Thank you all again and have a great rest of your night.
And again it does conclude today's conference we do thank you all for your participation you may now disconnect.
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Okay.
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Yeah.
Yeah.