Q1 2022 Sientra Inc Earnings Call
Good day and welcome to the T. Entre, Inc. First quarter 2022 earnings conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation. There will be an opportunity to ask question to ask a question you May Press Star then one on your Touchtone phone.
To withdraw from the question queue. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Oliver Bennett. Please go ahead.
Thanks, operator, good afternoon, and welcome to the Trust's first quarter 2022 earnings Conference call.
I would like to remind everyone that our remarks today. We will include statements that are considered forward looking statements within the meaning of United States security laws.
In addition management may make additional forward looking statements in response to your questions.
Forward looking statements are based on management's current assumptions and expectations of future events and trends, which may affect the company's business strategy operations or financial performance.
<unk> results may differ materially from those expressed in or implied by forward looking statements.
The company undertakes no obligation to update or review any estimate projection or forward looking statements.
A detailed discussion of the risks and uncertainties that the company faces is contained in its previously filed.
Report on Form 10-K, and its quarterly report on Form 10-Q for the first quarter ended March 31, 2022 to be filed with the SEC and available on the company's website at SEDAR com.
I would also like to note that you have to use its investor relations website to publish important information about the company.
Information that may be deemed material to investors financial and other information about the mantra is routinely posted and is accessible on the company's investor Relations website at Www Dot C intra dotcom.
Today on our call we have run many of those.
Sanchez, President and Chief Executive Officer, and Andy Smith Chief.
Chief Financial Officer.
I'll now turn the call over to Bob.
Thanks, Oliver Hello, everyone.
Our seventh consecutive quarter of growth was fueled by a record high reconstruction performance.
This result was a validation of our strategy to focus on the recon market.
This quarter has set the foundation for 'twenty two with the reemergence of this highly compatible market, which will support our long term growth.
We're now seeing hospitals go back to pre pandemic volumes will continue to add accounts and grow market share in this important sector.
We had record Q1 revenue of $21 4 million or <unk>.
17% increase over same quarter last year.
So thrilled with the over 50% year over year increase in the reconstruction channel.
The augmentation or cosmetic market, we hit an all time high market share of 13%.
The company also had 60% gross margins as a result of increased recon sales and improved operational efficiencies.
I'll walk you through the rest of 'twenty two and beyond.
Focusing on three key areas.
Burst accelerate market share growth with the reconstruction and augmentation.
Second continue to invest in commercial and R&D to support current and future growth.
Lastly to transform central innovative aesthetics company offering an enhanced portfolio for plastic surgeons.
Our existing accounts continue to perform extremely well and drove more than 90% of our revenue in Q1 'twenty two.
New accounts also served as a leading indicator to a long term growth profile and we added over 200, you got counts in the first quarter 'twenty two.
As a reminder, our tissue Expanders are now in every major GPO in the country and I wanted to bring a new recon account.
It takes four to six months before we see significant sales volumes.
We expect those new accounts to be accretive to see interests topline growth this year and beyond.
This continuous growth in accounts reinforces the fact that surgeons are switching to central.
Some of our value proposition the safety profile of our products, which is backed by our 10 year clinical data, which is the best in class warranty that'd be the partner of choice for plastic surgeons.
The benefits of our portfolio have led to the acceleration of bolt recon and augmentation share gains, which offers a unique and innovative technologists and tissue expanders and breast implants.
Now turning to the augmentation market the pandemic caused quite a boom the plastic surgery market and now we're seeing the augmentation market returned to normal seasonality.
Last year, so purposely set ourselves and our surgeons up by resetting our commercial strategy and it's working.
Well continue to grow our volume and our share of the market hit an all time high of 13% this quarter compared to the same quarter last year, where we were about eight 5%.
We also doubled our consumer brand awareness over the past two years growing at the highest rate in the category.
Number two position almost all brands.
We're strategically investing to educate suffers a bar safety profile, which is driving brand requests to plastic surgeons, we're seeing entering plants.
Well, providing more value to our surgeon partners by training them not only about our product advantages and techniques, but don't practice management and growing their business and the highest revenue producing segment plastic surgery breast augmentation.
We're also seeing growing interest in fat grafting, the plastic surgery market, which validates our decision to acquire the novel Fat grafting technology at the end of last year.
Just a couple of weeks ago with the aesthetics meeting San Diego the growing use of fat grafting and plastic surgery was a topic highly discussed highlighted many of the sessions.
The benefits of fat grafting of both aesthetic and our recon breast surgery has also been a topic of recent publications.
We're confident our fat grafting technology offer patients and surgeons unique benefits to obtain safe natural predictable and reliable outcomes.
We're very excited about this year as we build the foundation for the upcoming years.
With that I'll turn the call over to Andy.
Thanks, Ron.
During our Q1 'twenty two financial results.
We recorded record Q1 plastic surgery results, which brings a running total of seven consecutive quarters of record revenue performance.
She intra posted revenues of $21 4 million as compared to 18.3 in Q1, 'twenty, one an increase of 17%.
Gross margin for Q1, 'twenty two with 60%.
Which is a very strong performance as compared to 55, 4% for the same period last year.
54, 9% for the total year 2021.
The key driver for gross margins as product and channel mix. Our Q1 'twenty two results saw strong performance from our reconstruction space, which we expect to continue to perform strongly in 2022 and supported by hospital wins in 2021 and new hospital wins in 2022.
Consistent through 'twenty, and 'twenty, one and into 2022 we experienced price stability across our entire product line and improved product cost performance.
We have moved past our transition expenses in Q1, 'twenty two related to our distribution center and expect to see the results of the improved cost dynamics throughout the year.
Switching to operating expense.
Total GAAP operating expense for Q1, 'twenty, two was $28 9 million, which compares to $21 9 million in Q1 'twenty one.
That said the op expense compares to the Q4 'twenty one period of $26 1 million the increase being related to both nonrecurring G&A items and as expected increased expenses associated with an increased sales force to optimize 2022 customer acquisition opportunities.
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Total GAAP loss from continuing operations for Q1, 'twenty, two was $18 million as compared to a $56 $6 million loss for the previous year period.
Q1 of 'twenty, one included a noncash charge of $42 7 million associated with the change in value of our previously defined derivative instrument.
During 2021, we corrected for the derivative instrument accounting.
Considering the Q1 'twenty one results without the derivative accounting a comparative as a loss from continuing operations in Q1 'twenty two.
$18 million as compared to $13 9 million.
<unk>, primarily to the investment in sales and marketing into 'twenty to 'twenty two period.
Adjusted EBITDA for Q1, 'twenty, two was $11 $8 million loss as compared to a $7.3 million loss for Q1, 'twenty, one again attributed to both our investment and our sales initiatives and nonrecurring G&A charges in the current period.
Switching to key balance sheet items.
We ended the March 31, 2022 period with a cash balance of 38 9 million.
This compares to a balance of 51 8 million on December 31 2021.
Year to date cash used in operations was $17 9 million. However, $6 5 million of that amount was attributed to an increase in accounts receivable due to increasing sales in our transition and ERP systems in Q3 of 'twenty, one which caused the delay in delivery customer statements. We.
Spec to recapture much of that increase in accounts receivable in 2022.
We also increased inventories by approximately $1 3 million to support significant recon hospital wins, which require consignment inventory.
This is an as expected increase and compares favorably to the $13 8 million increase in inventory in 2021 to address increasing sales and support our business recovery from the 2020 Covid shutdowns.
Total debt on March 31, 2022 was approximately $84 million and total outstanding shares were approximately $62 million at period end.
Turning to guidance for 2020 to reiterating our past communications, we expect plastic surgery revenue in the range of 93 to 97 million, reflecting growth of 15 to 20 per cent compared to sales of $80 7 million in 2021.
In regard to operating expense guidance, you're guiding 2022 GAAP operating expense to be $105 million to 109 million, representing an increase of 15 to 20 per cent compared to GAAP operating expense of $97 million in 2021.
non-GAAP 2022 operating expense is expected to be 90 million to 94 million, representing an increase of 18% to 23% compared to non-GAAP operating expense of $76 3 million in 2021.
At this point I will turn the call back to Ron.
Thanks, Andy with strong momentum behind Us we have many exciting catalysts on the horizon in 'twenty two we expect to continue to expand our market share and number of accounts in both the recall and augmentation well.
Well also focus on driving towards profitability in 'twenty 'twenty, three but further growing our top line by investing in areas that will drive future growth.
We plan to fuel our future by transforming <unk> into a full of aesthetics company leveraging the full potential of our existing portfolio and the new fat grafting platform.
Looking ahead I'm very confident that we'll be on track to double our revenue within the next three years.
Now with that I'll open up for Q&A.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the key to.
To withdraw from the question queue. Please press Star then two.
The first question is from Margaret Hamburg.
William Blair. Please go ahead.
Hey, good afternoon, guys. Thanks for taking the question.
Maybe I just wanted to start out a bit with that yeah, what's including your guidance. If you can give us the time to breathe converse in dog and whether that shifted at all given the momentum that you are saying in the recon business.
Or even kind of underlying market trends at all.
Hi, Margaret welcome back.
Thank you.
I'm gonna be that Margaret.
We are our model was a 50 545, that's what we plan for the year.
This quarter it came in closer to almost a 50 50 between the two of them, but we did model 55 odd forty-five recon for the rest of the year.
Sure just adding what Ron said.
You know, we're taking a look at 2020 to understand the return to seasonality and we saw that in our Q1 in terms of Borg and Q2s, we're launching true.
We're seeing strong performance from both sectors, so it'll be a bit of a wrestling match between the two.
<unk> is very strong you see it in our gross margins.
Very exciting to see that space take off but we expect to perform equally as well.
Okay, I'm going to answer.
If I cut out.
Yeah keep going down that track right. So can you give us a good sense of underlying market growth within reconstruction and then similar yeah within odd to the best of your abilities I know its tough in the marketplace and then just kind of the pace of market share gains as we go throughout this year, you know 500 basis quite spectacular but can you keep.
Filling out that level and what my kind of.
Stop he or maybe even accelerate from there.
Recon Margaret Recon, and we don't have the data you guys going to release that data next week and I don't have that in one of the upcoming investor meetings, we will have a shared data, which I'm very very optimistic our share.
At a time.
And that includes all of us to market the first quarter.
For augmentation as I've been saying the last six months, we did expect and was soft seasonality first quarter back to 2019 levels.
And as you noticed we don't really rely on the market growth to advance our performance. So we saw our share growth dramatically increased to 13% from 11 at the end of the year. So it's nice to have a market behind us we're now waiting for the market.
But you've seen our market share the last two years double so that's where we're focusing on what we can do from our side.
Okay, great. Thank you guys.
The next question is from Alex Nowak of Craig Hallum. Please go ahead.
Good afternoon, guys. This is chase on for Alex. Thanks for the questions. I guess, starting you know you said you saw the seasonality kind of return of 2019 levels like going forward with likely to decrease discretionary budgets.
And a recession on the horizon, how do you see demand holding up for you and I guess, what have you seen historically that can kind of guide this opinion.
Yeah, Jason looking at let's look at our person and it was separate orca reconstruction augur, well like I said, it's back to seasonality, which means the Q1 and Q3 are the lowest quarters Q2, and Q4 hours the highest quarters. So we expect you to come back and back to a strong quarter.
Individuals get ready for the summer.
Good day, and we expect Q3 to go back down doctors are very very busy still I was in San Diego just two weeks ago at the aesthetics.
Oregon, The cervix conference and they're telling me there are two or three months booked ahead. So I don't know if they're plano recession, yet, but they are being very busy reconstruction as we stated on their opening remarks. If the market is back hospitals are busy individuals have delayed their reconstruction are going in and getting taken care of.
And they're very very very booked as well in that regard for our reconstruction. So I see a very strong recon market throughout this year unless you are right back to seasonality.
That's helpful. Thanks, and I guess just concerning your Salesforce you know what was the sales team reception to being more recon focused.
Any concern amongst the graphs and you know what was the excitement level coming away from the sales meeting at the conference.
Yeah Chase. This is a strategy that we implemented and begin to 2021.
To really pivot this company is focused on reconstruction.
So we been doing that since the beginning of last year, adding new accounts training, our representatives and the great thing is as we add new reps and we did add 11, new representatives at the beginning of 'twenty two all of them have reconstruction background.
Some of them the majority of them have come in med device companies with extensive oh, our experience. So it is part of their job. The individuals that calls in a hospital also calls in the office for the augmentation side, we did expand as well our reconstruction managers will have seven before had for reconstruction managers. So we're very excited.
Cited about the support we have right now and our marketing team as well at a more resources and more programs to drive that educational component to our hospital surgeons.
Last year at the <unk> summit as a program do we do to help our searches that are focused on reconstruction learn more learn from each other we had about 35 surgeons. We expect over 100 surgeons attendance programs this year and as a weekend program. They take time for their own time to attend this program. So you reconstruction is part of us construction.
Is what's the interest sense for who we are very focus augmentation as well and we're very excited about performance not just in this quarter augmentation, but for the past six quarters and augmentation.
No that's good to hear it. Thanks, and then just lastly for me you know Andy can you speak to pass to shore up the balance sheet at all you know you laid out a path to profitability.
But will you need to raise additional capital to bridge you. There I guess, what are you kind of thinking about from a balance sheet perspective.
Sure.
You know when we look at the past our legacy debt facilities and capital strategies a bit.
Effective over the last several years, but keep in mind. They were put in place in 2018. So they're designed basically to take the company from 2018 to essentially 2023 to 2025.
When we look at those current strategies, we have ample capital for the year 2022, but we're looking at different ways different strategies to increase access to capital to provide a view of 2025 to 2020. So it's basically time for a refresh of that what was in place in 2018, and we had a lot of options.
So we're working through that in real time, right now and we will report back obviously to you all in to the field once we come to a landing spot.
Got it thanks for the questions guys.
Okay.
Yeah.
The next question is from Jon Block of Stifel. Please go ahead.
Thanks, guys. Good afternoon falls, well I'm, Andy maybe just a couple on the P&L to begin with the 60% yeah. It was really solid and a nice step function above where you had been.
And then you see a lot of it's mix, but maybe just talk to US I mean do you think we're now working off this level that you sound like you are a lot of reasons expect recon to remain strong and thats the higher gross margin component. So how do we think about a six handle for gm's throughout 2022, and then on the non-GAAP Opex I think I've got the numbers right I think you're calling for.
90 to 94 mill in the P or in the press release, but you did 25, just over 25 in <unk> and you're still being quite active on the R&D front. So you know how do we stepped down off that run rate in terms of where we were in <unk> and then I just got a quick follow up.
Sure.
So let's start with gross margins.
60% is part product mix.
But a big part of this is the work we've done in our distribution center as we said during the launch of that Big move in third quarter of 2021 that we had work to do to find the efficiencies that we're looking for.
Past communication was we needed Q1, and Q2 of 2022 to complete that work. We're ahead of schedule. We completed that work here in early 2022, we're seeing the results in Q1, those results will stay with us and build going forward. So that 60% our current product mix is solid.
It can go up from there based on again recon performance and additional efficiencies, but won't drop much from there. If we have an extremely heavy quarter. So that additional kick up a four to five points is with us going forward. So again that was completing the work that we started in 2021, when we look at 2022.
In terms of op expense, we have a similar dynamic we still have work to complete in terms of our ERP change and the other really significant investments we've made in infrastructure in 2021, Youre seeing some of that effect in Q1 2022 op expense.
Proximately, two and a half a million dollars of what you saw on op expense in Q1 is nonrecurring when they look at guidance specifically as you said if you annualize our Q1 it doesn't fit our guidance. There is a reason for that we expect Q2 to also have some nonrecurring costs, but of the 14 to 18.
<unk> million and non-GAAP increase in op expense.
<unk> eight and a half to $9 million of that amount is nonrecurring that's where you start looking at the second half of 2022 in terms of basically.
Measuring out our op expense are basically making that look much more reasonable.
And that's basically going to be the foundation for 2023, when we talk in terms of very little increase in op expense in 2023, and our long term modeling has much to do with their early 2022, taking care of some business taken care of some of the restructuring work that we did in 2021 that will be behind us and we'll see it.
Normalized that's the right word and by the way. We now include our non-GAAP to GAAP operating expense reconciliation.
In our press releases will do so every quarter. So the street can understand how we basically get to non-GAAP operating expense.
Okay.
Got it very very helpful. And then you know rod for you and maybe just more.
The higher level of strategic I mean, like I said, a nitpicky. One is there anything to talk about in terms of Alex to pro and in any dialogue with the FDA, but to zoom out you know you've clearly got a lot of traction in recon I think theres been a lot of airtime given to a future competitor, but if and when they get their own would be specific to auto can you just give us your thoughts on you.
No your recon portfolio versus others, it should get stronger with pro when do you think anyone's really there even chasing you in that part of the market. Thanks guys.
Thanks, John we are focused on becoming the leader in a reconstruction and you mentioned one of the products pro.
Discussions with the FDA and.
Submitted the F type gains came in December so we expect that to continue to move forward.
We talk.
Talk about the project and then I'll see auto part two is our fat grafting technology or the majority of surgeons use some kind of fat grafting reconstruction. So that we're gonna have a representative walking in.
With a advance they're the only dual port.
Tissue expander in the marketplace that reduces re operation reduces Sorel had reduces infections and really makes it a critical advantage for us and we have breast implants that has advantages were discussed in the past and obviously you have a fat grafting. So this is all going to be happening within the next 12 months as we launch a fat grafting. So we have.
This product that we discussed and the pipeline is strong we're looking at different opportunities as well focus on reconstruction.
Also very clear argumentation is a critical segment for us it's done very very well for us in the past we gained market share.
Quite a bit this past three months, we see augmentation.
Well as a path for sustained this company.
But the critical part is because we have such an advantage it into reconstruction with the clinical data that we have and I'll share. An example, we wanted as well know military base contract was so proud of that and usually as you heard in the past it takes four to six months to get a contract.
To really start seeing revenues it just takes a while but because the surgeons in that space were so impressed by our clinical data by Alex too. They actually quickly start using all ex to script to start using our breast implants. They felt that for the patient it made more sense to quickly go to Alex.
Two versus worried about using the inventory from the previous manufacture. So that's the kind of data that makes it.
Sustainable long term growth and long term focus on being the number one company in.
In the reconstruction area.
Perfect. Thanks, Rob.
The next question is from Chris Cooley of Stephens. Please go ahead.
Afternoon, and thanks for taking the questions.
Just two for me if I may maybe one I know, we just had the aesthetic meeting, but just when we think about the pipeline as John alluded to.
Just kind of curious if you could give us some color there about the contribution in the quarter from the new six tab version of Derma span and.
More broadly expanders as a whole.
And similarly, if in Canada, we're still expecting.
Approval here in the second quarter.
As well just wanted to touch base on those two fronts and then had a quick follow up.
Hey, Chris we just launched the <unk> six stab and we saw very high demand in the last week in March where you basically.
Really nice job selling most of them out and they obviously are taking care of the needs of demand in this quarter as well.
We also continue to see increased demand and interest for Alex do we have several well known networks hospital networks and U S. Dollar could you just talk to us about the clinical data and find out ways to add I'll ask two enduro span six tab.
Those are the kinds of things that we see immediate impact that.
That will continue to pay for the future as well and then obviously all the work efforts that we did last year, we're seeing now in the first quarter. The results of those accounts that we won in third or fourth quarter of 2021. So we're excited about where we're going from a construction standpoint.
I appreciate that additional color and.
I just wanted to circle back as well just as we kind of try and dial in the model going forward here, a little bit tighter post the fourth quarter.
Any any update that you can provide just as it pertains to the non surgical side of the portfolio and specifically just thinking about scar management and I'll hop back in queue. Thanks.
Yeah.
Yeah.
Sure I'm sure you're talking about by a corner by corner did extremely well last year, we expect similar performance this year Chris.
I don't know if.
We broke that down by accordion last year did not yeah. What we provided was you know it started out in the mid seven figures is basically a cash cow and we see it as a bigger contributor going forward.
Thank you.
Okay.
The next question is from Kyle Boser of Lake Street Capital markets. Please go ahead.
Great. Thanks for taking the question and for all the updates so maybe I'll switch to fat grafting. So it from our checks it sounds like positioned.
And perhaps even consumers are quite price elastic in the fat grafting space So to drive adoption.
Pretty key at least according to a couple of Kols that you can show better efficacy a fat retention.
So its great that youre running the clinical trial, you kind of all over this.
I'm just wondering could you talk a little bit again about what the industry averages for fat retention from fat grafting with traditional methods and and what do you think would be a reasonable threshold.
To achieve to drive meaningful adoption I mean did it just need to be statistically significant.
Or is there a clinically significant threshold that might make more sense, just kind of curious how you're thinking about that.
Yeah, Kyle and most products in the marketplace, including the two are marketed by two companies and the homemade products by surgeons about 40% to 50%. After 12 months. They will see you know, it's about 40%, 50% retention that's been pretty much the threshold that they go by the data.
On the system to fat grafting system, we acquired from mass General is that 71% up to 12 months now that's where we're trying to duplicate data and extensive studies a little higher you know to see that.
Make sure that is the case, we do very confident because they had beautiful data, which was approved by the FDA at 71%. So we're gonna be doing the studies and more patients to.
You can see that fat retention and that's going to be kind of the game changer, you're going to be able to apply and use our fat grafting for reconstruction that a patient can last majority of them over 12 months. You can also see data as well in different parts of the body part of the body transformation.
And box and auto parts of the body and potentially down the road is a filler as well most of that axial wears out there. They usually are good for 12 to 15 months now we have a fat grafting, which is a patients own tissue that could be 70% for about 12 months, so you're really going to see very consistent fat grafting for predictable fat grafts.
That's very different than what's in the marketplace right now.
I appreciate that yeah, and then my follow up.
Can you remind me what what some of the top reps.
And the implant business are generating sales per year and roughly how long it takes to ramp a new rep on average Barry thank.
Thank you.
Yeah. So last year, we were very proud of we got close to a $1 6 million per rep.
A year and a half ago was $1 2 million per rep.
We think that 2 million per rep is where we'd like to be eventually.
And we have reps that have three plus million dollars territory, we usually have to divide it because it becomes very difficult for that one represented cover. So we you heard me, stating we added 11, new individuals' some of them are going to areas. You would think it makes sense to add new representatives south.
Florida parts of California et cetera.
So we feel that $2 million per rep is a good target for representatives.
And as it go well above that makes it very difficult to manage.
Second question about how long does it take.
In the past Kyle you'll probably say six eight months at somebody walks in to try to meet that.
Customers Stubbs, our relationship with customers saw learned about hospitals, but because we're hiring mostly if not all individuals to have the extensive or experience theyre coming in and make an impact right away within the two to three months would seem to make an impact the territory, we're teaching them the cosmetic site.
But they already coming in well known with the connection to hospitals.
We're taking those and bring those individuals from well no big med device companies and they like the flexibility to excited about the opportunity to come on board to Sandra.
Joining a company that's fast nimble and make quick decisions. So they're really excited about joining us and theyre seeing the impact within the next two to three months after he joined the company.
Oh, that's great I appreciate that well well thanks for all the updates I'll jump back in queue.
The next question is from Anthony Vendetti of Maxim Group. Please go ahead.
Thanks, I appreciate it thanks, Rob Thanks, Thanks, Andy.
Just a follow up on that and then I just had two quick questions. So.
The goal of 2 million per rep.
You increased the the average rep to $1 6 million, so and that was.
Up 33% from 18 months ago.
<unk> 2 million per Rep is that is that 18 months from now is that is that.
Two years from now when do you think are the average rep to do $2 million.
Pretty good.
Yeah, I can hear you are making some mass calculations that Anthony and background.
We're kind of targeting about one eight plus this year. Obviously you know we're now at 56 reps.
So you targeted about one eight and then eventually to get to that you know you heard me, saying, we're going to double our revenue next three years. So that means sometime 90 23, but sometime after that we'll probably going to have to assess the deployment of our sales force. We're very confident on our current structure for both sales and marketing for the next 18.
24 months when we added those representatives, we're already thinking of fat grafting launch beginning next year.
But keep in mind it is going be the same rep. That's already in the hospital and that also the office for the cosmetic Doctor.
And to be talking about fat grafting. In addition to the products warehouse.
Okay. That's helpful. And then you added 200 new accounts.
Oh this quarter is that the is that the run rate.
Approximate run rate, we should look at per quarter for the rest of the 22 give or take a little bit.
Give or take a little bit remember one of the things I announced the last quarters that we're focused on expanding our market share in the current counts, we don't want people to be still focused at a new accounts. They forget accounts, 90% of our revenue was driven by existing accounts and adding new accounts is important and by the way Anthony 80% of those accounts were added.
Or hospital accounts their reconstruction accounts in this quarter.
We have a different target I'm not going to show that targeting is per quarter, but every rep.
All of US have a certain number target was supposed to add for a quarter, but I can say that 200 counts as a really good number.
Okay and then just last question on origin, how is the where are you at on that.
200 patient 10 clinical site.
<unk>.
Any update on that.
Yes.
Are all the sites we identified we are actually they have a about a close 15 patients already in the process of being enrolled so we already started the process with very very confident in our ability to finish the study.
Time for the launch you remember the product is approved has all indications are very broad indication by the FDA, we will likely have us more ways.
Ways to talk about the product based on the clinical data. So that again mass general did a wonderful job with clinical data. We just want to have more data to be able to share when they launched the product the beginning of next year.
Okay, great. Thank you so much I'll hop in queue.
Again, if you have a question. Please press Star then one the next question is from Kyle Rose of Canaccord. Please go ahead.
Great. Good afternoon, and thank you for taking the questions. This is Brian on for Kyle So maybe to follow up on that point, Ron with over 300 accounts not added in the last two quarters, both coming in at around 80% Recon, where does your total account base stand now and what's the rough split there between recon and all that.
Yeah, Cai, we're closer to 3000 accounts, Okay right now so we're pretty excited about that and I would say it's still about.
After that it's 60 plus percent odd the rest are recon.
But trust me.
Quite a bit.
Yeah, and then maybe just a follow up on check in in terms of O U S expansion to China, Japan Middle East.
Are those distribution agreements in place how we're approvals tracking there or are you still targeting China in the next two plus years, just maybe a refresher on other O U S initiatives.
Yeah. So.
Let me start first in Canada, because there was a question about Canada I didn't answer that is we're very excited because we had our first patient in Canada. We have a lot of Canadian surgeons are very excited about using our implant. We have several surgeons already bought our implants. So Canada is going extremely well we're excited by the future there.
Middle East we are still negotiations there.
In China, we are engaged in talks with the Chinese regulatory agency I don't think we've changed the timelines for sometime in the next two years, we're really on track for approval, we're working with have a distributor of red right now in.
In China, and we are discussing with the Chinese FDA. So everything is progressing extremely well in China and it will probably think 24 ish.
It will be launched there in China.
Okay.
Great. Thanks, again for taking the questions.
There are no other questions at this time. This concludes our question and answer session and today's conference. Thank you for attending today's presentation. You may now disconnect.
Yeah.