Q3 2022 KORU Medical Systems Inc Earnings Call
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Greetings and welcome to <unk> Medical systems third quarter 2022 earnings Conference call.
At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation.
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I would.
I'd like to turn the conference over to your host.
Hana Jeffrey.
Gilmartin group.
Thank you and over to you.
Thank you. Thank you.
Good afternoon, everyone earlier today cover medical system released financial results for the third quarter ended September 32022.
A copy of the press release is available on the Companys website.
During this call we will make certain forward looking statements regarding our business plans and other matters.
These comments are based on our predictions and expectations as of yet.
Actual events or results could differ materially.
Many risks and uncertainties, including those mentioned in the associated press release, and our most recent filings with the SEC.
We assume no obligation to update any forward looking statements.
I encourage listeners to have our press release in front of you, which includes our financial results as well as commentary on the quarter.
During the call management will discuss certain non-GAAP financial measures in our press release and accompanying investor presentation, and our filings with the SEC.
Each of which are posted on our website.
You will find additional disclosures regarding non-GAAP measures, including reconciliations of these measures with comparable GAAP measures in our press release and accompanying investor presentation and our filings for.
For the benefit of those listening to the replay. This call was held and recorded on Wednesday November nine 2022 at approximately 430 PM Eastern time.
Since then the company May have made additional comments related to the topics discussed.
And please reference the Companys, most recent press release and filings with the SEC.
Joining us on today's call is Linda RB President and CEO of <unk> Medical system, Tom Adam Silver Medicals, interim Chief Financial Officer, and Josh <unk>.
VP of strategy and business development.
Linda Please go ahead.
Thank you Hannah good afternoon, everyone and thank you for joining us today.
We are very pleased with our results this quarter as we continued to make progress against our strategic objectives across all three of our businesses.
We are making impactful strides as a leader in large volume subcutaneous drug delivery.
And we are very excited by our advancements to enhance the quality of life for our patients while improving therapeutic benefit in overall healthcare system costs.
All of this is not possible without the efforts of our core medical systems team.
I want to begin by thanking them and our shareholders for their continued support.
During today's call, we will use slides to support our commentary.
I will begin with a business update of the third quarter I will then turn the call over to Tom to discuss the quarterly financials.
For ending with updates to our 2022 guidance.
After concluding our prepared remarks, Tom Josh and I will then be happy to open the call up for Q&A.
The third quarter marked another period of growth for the company with strong performance across several key milestones.
Q3, 22 revenues of $7 8 million and 28, 5% growth marked our fourth consecutive double digit growth quarter and.
And we saw strength across all of our businesses.
We continued to see great progress and momentum in our novel therapies business.
During the quarter, we entered four new clinical drug collaborations in phase II.
Including two announced yesterday with care apartments vehicles.
And we had one of our drugs progressed to phase III.
We now have 23 total commercialized and collaboration deals. This includes 14 novel therapy collaborations and nine on label drug indications.
And our U S core business, our growth of 16% outpaced the underlying subcutaneous immunoglobulin or <unk> market as we executed on strong sales and marketing programs and were also aided by the Backorder clearance.
Our international business saw 46, 8% growth off a relatively small base with growth in several countries.
On gross margin we ended the quarter at 55, 7% up from 51, 1% in quarter, two driven by great efforts from our operations team.
And improving supply chain.
And improvements in manufacturing efficiencies.
We also continued to build our executive team hiring a new vice President of Medical Affairs, Brent Rutland.
Brent experience base is well aligned with our strategy and his expertise will advance clinical evidence generation in support of our product pipeline provide valuable insight to our drug therapy candidates and help develop important key opinion leader relationships.
And finally, driven by the confidence of our novel therapies business and a growing core business, we are raising our guidance range to 27 $5 million to $28 million.
Before providing more detail on the quarter I want to spend a few moments on our strategy and capability to enable the growing shift from a hospital to home.
Our freedom system as the market leader in large volume subcutaneous or sub Q drug delivery.
Which we classify as above 10 ml.
With the use of our system and our value added services, we empower patients to manage their weekly biweekly or monthly therapies independently from their homes versus the Nurse's Institute visits to a hospital or infusion center.
The freedom system is attractive to <unk> pharmaceutical companies.
As it is a market proven system that offers them a clear pathway to the clinic and commercialization we.
We have FDA clearance and regulatory approval and over 25 countries commercial readiness.
<unk> with nine on label FC drug indications and a simple fully mechanical system that can be customized for rapid deployment.
Our core.
Business comes from our FDA cleared drug therapies for use with our pump.
The majority of this business comes from the growing <unk> market.
<unk> receiver reusable pump at the start of their therapy.
And the disposable consumables are delivered to their home once per month generating approximately $750 per year in recurring revenue per patient.
As the market leader, we support over 30000 patients globally, who require <unk> therapy infusions at least once per week.
This segment is currently the largest part of our revenue and represents a $480 million global opportunity with over 600000 patients with PID D C IDP or <unk>, the majority of which are on IV therapy.
The second area of our business is our novel therapy business, where we worked with pharmaceutical companies to provide services innovation and product for their clinical trial cautious as they are moving their IV drugs to a sub Q formulation.
Or are working to introduce new FC drugs to the market.
We have identified a significant pipeline of opportunities within novel therapies across multiple drug classes and phases.
Currently estimated at over $2 billion total addressable market or Tam.
The company has closed 14 pharmaceutical collaborations, including an FDA approval for one new novel therapy drug.
And has six new drug therapy areas represented in our pipeline.
This progress Diversifies, our portfolio and demonstrates the viability of large volume drug delivery in the home across multiple therapies.
We are excited by the growth and momentum in both our core <unk> business and by our novel therapies pipeline and by the opportunity. It presents a $2 $5 billion Tam as the market for at home <unk> delivery continues to expand.
We see the market for sub Q delivery continues to grow for a number of reasons.
That are supported with an increasing number of studies.
First as a therapeutic benefit of sub Q versus IV therapy.
Which has been well studied in the <unk> space.
And we are seeing further studies of this and other drug classes.
The proven therapeutic benefits include the delivery of a consistent <unk> levels over time, leading to fewer adverse reactions and infections.
The second is a preference for FC over IV therapy.
This one from a recent oncology study showing 85% patient preference.
And finally are the cost savings of 33% to 52% associated with multiple drug therapies being administered outside of the hospital.
Supported by United Health Group study.
We believe that the therapeutic benefits combined with patient preference and associated cost savings will continue to drive increasing numbers of pharmaceutical companies and patients towards FC therapy.
Turning back to our third quarter, we saw significant progress in execution of our strategic initiatives.
Within our commercial markets, we are working to ensure we win new patient starts when pre filled syringes and expand geographically.
For new patient starts we continue to see the company's growth.
Outpacing the growth of the underlying U S <unk> market.
Our domestic core growth for the third quarter was 16, 2% and 12, 8% year to date output.
Outpacing an <unk> market that is growing.
Just over 6% year to date.
This growth is driven by execution on our sales and marketing programs, including value added services and label expansions.
Second the pre build market remains the fastest growing part of the <unk> market and courtroom remains uniquely qualified to capitalize on this growing market with our freedom infusion system. The only pump with FDA five 10-K clearance for a pre filled syringe indication.
For the third quarter of 2020 twos to the pre build market has grown 244% year over year and now accounts for 11, 5% of the overall <unk> market.
Lastly, our <unk> business grew 46, 8% this quarter as we saw growth across several European markets and both our pumps and consumables.
As we continue to increase our focus in this area.
Given the growth being driven by pre filled syringes are our PFS I want to dive deeper into the progress made during the quarter.
As I mentioned above the pre filled syringe market is currently the fastest growing segment within the <unk> market.
While still considered early stage, we believe pre filled syringes offer significant opportunity.
Since receiving the only FDA clearance with the pumps, specifically for a pre filled syringe indication in Q4 2021.
<unk> penetration has nearly tripled.
Ending the third quarter of 2022, with an 11, 5% pre filled syringe penetration.
We believe PFS will continue to be the preferred format over bile administration as from the patients perspective, a pre filled syringe eliminates approximately 25% of the steps from a process and.
In a recent study 97% of patients reported satisfaction with <unk> for their convenience and ease of administration.
Well offering significant patient value due to the elimination of the bio transfer staff pre filled syringes today satisfy only about one third of the total market opportunity according to patient dosing requirements.
Pre filled syringes today are offered in our 510 and 20 ml format.
We continue to work with our pharma partners to pursue additional indications and innovation opportunities related to <unk>.
To serve a greater part of the market.
Okay.
Moving to our novel therapies business, we have made strong progress executing our strategy to extend our leadership position in <unk> to broader novel therapy drugs.
This business works with pharmaceutical companies to use our freedom system and clinical trials required for drug approval and launch in the system is often customized to the requirements of each drunk.
Revenue in this business includes devices sold for use in trials and nonrecurring engineering and technical services to customize and validate our platform for use with each drunk.
We expanded our collaborations in the quarter, winning four new indications in neurology, nephrology hematology and respiratory all in phase II.
This includes the two agreements with care Pharmaceuticals, we announced yesterday.
Additionally, our previous program advance from phase II to phase III.
This brings our total collaborations to 14, including one novel therapy drug which was approved in the first quarter of this year, our palaces empathy Ali.
We have expanded our total portfolio to seven drug classes.
We also have 10 to 15 additional opportunities we are pursuing in our pipeline that span from phase II to phase III and are both re formulations and new indications and new molecules.
Each of these collaborations represents a drug for a specific indication spanning IGN non IV drugs.
We're making progress because of the value we provide to pharmaceutical companies.
Drug companies want a device that has an improved regulatory pathway.
As patient friendly with consistent training support.
<unk> able to be marketed globally and can get them into the clinic quickly.
Our ability to meet these needs as evidenced by the 30000 plus global patients using the freedom system.
Successfully creates confidence.
<unk> can deliver.
And the flexible design of our system adaptable to volume and needs of each medication allows us to enter the clinic quickly a key priority in the drug development process.
Now I would like to take a closer look at those close collaborations and lay out additional details about their potential.
Before turning to the specific metrics I want to remind everyone that these drugs are either in development or seeking new indications in each indication will have an individualized path through the clinic regulatory and commercialization processes.
In total our nine on label indications and 14 active collaborations include over $2 8 million potential patients and a tam of roughly $2 5 billion.
The total addressable market of each collaboration is based on many factors, but one we consider in our Tam model include each drugs potential patient population.
The treatment frequency or how often they dose and an average selling price of our freedom pump and consumables.
As an example, the oncology drug in phase two has a patient population of 800000, but a less frequent dosing expectancy and a higher ASP.
We have not discounted our Tam preclinical risks, but have provided the phase of each of our drug collaborations.
Our strategic plan does not rely on every collaboration to make it through to commercialization.
<unk> each indication represents an additional patient opportunity for the company.
We remain confident that novel therapies will accelerate our growth and will continue to expand.
We plan to update this pipeline quarterly to show the novel therapies progression.
We're extremely excited about the potential.
We remain on track to achieve our strategic goals.
Based on continued positive engagement by pharma.
And ongoing.
Collaborations in our pipeline.
I will now turn the call over to Tom for a discussion of our Q3 financials.
Thank you Linda and good afternoon, everyone I'm excited to report our fourth consecutive quarter of double digit net sales growth ending the third quarter with net sales of $7 8 million for <unk>.
Eight 5% increase from $6 million for the same period last year.
This increase was driven by strength across all three business segments with each reported double digit growth.
Net revenues for the third quarter included $300000 of backwater from Q2, which accounted for 5% of the overall revenue growth in the period.
Our domestic core business grew by 16, 2% or 843000 and was primarily driven by increased volume growth ahead of us at <unk> market growth and label expansions, including Prefilled syringes.
Domestic core also benefited from clearing of the $300000 or 6% of domestic growth of backwards from the second quarter.
22.
International net sales were $1 1 million for three months.
Ended September 30th up 46, 8% compared with the same period last year due to volume growth in several European markets.
Novel therapy sales were approximately 760000 for the quarter, an increase of $547000 over prior year, whereas 252% increase higher.
Higher novel therapy sales related to services performed for innovation development agreement and increases in clinical trial product sales to pharmaceutical customers.
The following the following slide shows a sequential view of margin improvement from last quarter as well as a bridge of gross margin and related impacts that we saw in the quarter versus the prior year.
Starting on the left starting on the left side recalling that in Q2, our gross margin was impacted by supply chain issues and higher manufacturing variances amortization impact from the quarter. We saw sequential quarterly improvement of 460 basis points this quarter driven by supply chain improvements.
Which resulted in improved manufacturing productivity.
On the right side total gross margin for the quarter was 55, 7% and was lower than prior year by 220 basis points with.
The decline in the gross margin percent was primarily primarily caused by higher manufacturing costs associated with labor and materials.
In addition, our NRT service revenue mix, while while contributing positively to gross profit showed a decline in gross margin as a percentage of sales.
Price and product mix contributed to a small offset of the overall margin decline.
Total cash used for the first three quarters was approximately $9 million, primarily driven by net losses in operating activities of $6 7 million and $2 $5 million of investing activities.
Of these drivers we estimate approximately $3 7 million of onetime impacts, including our headquarter relocation.
<unk> of severance and inventory build for supply chain disruptions.
Due to our priority manufacturing transitions were outsource partner.
We expect in the last quarter of the year to reduce the cash usage by planning for lower net losses due to higher sales.
Gross margin improvements and lower operating expenses in line with our guidance.
In addition, we expect lower working capital driven by a reduction in trade accounts receivable balances and lower inventory and finally incoming cash from state filed employee retention credits and leasehold improvement reimbursements are expected.
In the final quarter.
As a result of our second half projections, we expect our ending cash to be a minimum of $60 million.
Finally as indicated in the appendix our net loss for the third quarter of 2022 was $1 2 million or a negative <unk> <unk> per diluted share compared to a net loss of $1 1 million or a negative <unk> <unk> per diluted share for the same period of 2021.
Net loss included a tax benefit of $300000 through the third quarter of 2022 on a non-GAAP basis adjusted diluted earnings per share was a negative <unk> <unk>.
Compared to a negative <unk> <unk> in the same period of 2021.
I will now turn the call back to Linda for guidance and closing comments. Thank you Tom.
Turning to our expectations for fiscal 'twenty two.
As a reminder, our outlook is rooted in several key drivers.
It market growth in the high single digits plasma supply clinical trial activity and expansion of the novel therapies pipeline inflationary impacts, including labor and supply price increases.
Ply chain and labor shortage impacts timely receipt of other receivable tax credits and planned inventory reductions by year end 'twenty two.
For full year 2022, we are raising our revenue guidance to 27 $5 million to $28 million previously, 27% to $27 5 million.
Based primarily on the strength of our novel therapies pipeline and continued growth in the U S <unk> market.
We are confirming our guide to a 55% to 60% gross margins to exit the year, we expect stability and less disruption in our supply chain and we are managing our NRI margin variability.
We are low we have lowered our operating expense range to 26, 5% to $27 million previously, 27% to $28 million in line with our latest projections and finally, we expect our cash position to reflect the year end balance of a minimum of $16 million.
We anticipate continued improvement from the first half of the year burn rate.
We had significant one time investing activities for our headquarters relocation experienced lower gross margins driven by supply disruptions.
And additional higher sales and improved gross margin per our forecast, we expect lower working capital from both reduced AR and inventory.
In addition.
Can we expect cash from our filed in.
Employee retention credit and tenant improvement reimbursements.
Excuse me.
In closing, we are making significant progress in advancing our strategic priorities.
We have achieved our fourth consecutive quarter of double digit growth and are making continued progress within the novel therapies pipeline.
Our core domestic and international businesses are also reporting strong growth.
We continued to be resilient in the face of multiple supply chain challenges and are showing gross margin improvements our team is motivated and capable of executing on our strategic plan.
We are excited by our progress to date and look forward to continuing to build our position as a leading <unk>.
<unk> delivery player empowering patients and building value for our shareholders.
I will now turn the call over for Q&A.
Thank you.
At this time, we will be conducting a question and answer session.
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One moment, please while we poll for questions.
Our first question is from the line of Alex talk.
From Craig Hallum.
Please state your question.
Okay, great. Good afternoon, everyone, Linda <unk> been accrued now for 18 months and you've taken this business from growing pretty much in line with the markets are growing well above an SCR.
Plus <unk> plus a bunch of other stuff on the international side novel therapies, but.
<unk> what is really the biggest driver of that success.
Structured spec pharma contracts Prefill no approvals there change salesforce, just trying to understand what's the strength the real core strength in the IGT franchise.
Yeah, Great Great question, Alex and thanks for joining US today. So you had a number of topics in your questions. Let me start with you know were really focused first on our rebuilding and we have a very strong team now a full sales team we put in new new key account management, we serve.
Rounded them with value added services with nursing.
Services that we hired in to the channel so not only do we bring a high quality product to our patient base spot value added services that we surround them with including all of our full training services and online training services is critically important.
And then you look at our sales and marketing progress and programs. We focus on a couple of key areas first is on label indications that was the first priority. When we went after and here in the U S. We added four new label indications over the course of the last year, which really helps our specialty pharma partners to be able to.
<unk> only one platform. They also see our novel therapies pipeline and for these specialty pharmacy customers, bringing them new patients as how their business model works. So they are very appreciative of all the work that we're doing in that area.
And then finally, a pre filled syringes, having the only pump that is approved for a presale indication is critically important we see today that pre filled syringes are driving.
The majority of the growth in overall, <unk> and Wow a portion of that is.
Being taken away from Vial administration, we see it also penetrating the overall market. So it's a great team.
Focusing on our pipeline and our value added services and then executing against those are programs every single day and then we we just have really focused in on key accounts and ensuring that.
We're getting in there and negotiating agreements with these accounts so a long way to go but we are very pleased with our progress in the U S business.
No that's great and really appreciate outlining the pipeline here around novel therapies. There is a lot of drugs on here most of them phase two a couple of them are phase III I was hoping we could get a little bit more granular on the indications and maybe just take one of the phase twos and take one of the phase III could you give us a little more deep.
So what sort of drug class it is where it could be years, just to give us a nice.
How the pump can be used beyond just AIG market like it is today.
Sure. So maybe I'll start and then I'm going to hand, the call over to Josh Schuh really leads up this whole new business area for us and.
But I would say as you indicate first of all this is our first time showing the pipeline in this level of granularity by indication that we're working on by drug therapy class and we'll continue to take feedback from our investor base to get better at this certainly every single quarter, but we're really proud of the progress.
So so maybe al.
Maybe I'll start with our with one which is the oncology piece that I talked about you know oncology.
As we think about this one this could start as I've mentioned earlier with alternate site delivery of oncology drugs with patients in clinic today, instead of the nurse using a pushed methodology with a syringe or using the corot pumps or pre outpatient time obviously.
<unk>, a tremendous patient population and but a less frequent dosing administration.
The care indications, perhaps I'll hand, it over to Josh you can talk about <unk> and some of the indications there and maybe Josh you use one other opportunity and pipeline sure Hey, Alex Thanks for the question so.
I think as Linda mentioned, we're very excited about what we see in the pipeline the disparate as some of these opportunities and think about <unk> specifically.
What's exciting about what they're doing is they're a fantastic partner they have a unique asset in Q4 and it's addressing multiple.
Conditions multiple indications with significant unmet needs.
So that one as an example, we sizes a total opportunity of at least 150000 patients in the U S.
With an opportunity to be quite a bit bigger when we look outside the U S.
We're also very encouraged by the opportunities that are not yet translated into deals that we are actively pursuing the pace of those has increased dramatically this year.
We are becoming more aware of folks are becoming more aware of quarter was a great option for large volume subcutaneous <unk>.
And those span phase II phase III trials, as well as new drugs and re formulations.
So we think when we look across the whole pipeline. This 2 billion Tam on top of the half of $1 billion, we have in our core business.
Really encourage us on their ability to create value over time.
And maybe just obviously many of these we can't get into a lot of detail because.
They are covered under confidentiality with our with our pharma partners on the other piece I would just mention as we also have a.
Large number and immunology so in our core business, where we continue to work on geographic expansion, new device indications and formulations and and that's very exciting because it's it's nearer term for us and gets us ever closer to that $480 million down.
And if we go back a year ago last December at the Analyst day. The goal is to get one new drug commercialized in five years, you know four years left but you've got 14 drugs in the pipeline confidence.
Got it.
I think we already dead.
We had our first non IGT drug launch.
Though on a smaller indication.
In quarter, one of 2022, so I would say our confidence level is high and we.
We anticipate doing another investor day towards the end of Q1 up 23 or early in Q2, and I think we'll have a lot of exciting news to report.
<unk> been working hard in this novel therapy space, you know the company has.
I entered the company with just a great franchise, a patient base, great relationships with specialty pharmacy, and we really needed to get out there and have people understand who core ROE was and what we offered in this year we are.
Presented at two of the largest drug delivery conferences and attendant all three.
The feedback and response and now people really understand that there isn't a system out there that can deliver volumes of drug subcutaneously is very encouraging and we have a lot of interest so it's exciting.
That's great I appreciate the update thank you.
Thanks, Alex.
Thank you. Our next question is from the line of Kyle Rose from Canaccord Genuity.
Please state your question.
Hi, This is Caitlin <unk> on for Kyle and Dan Congrats on a great quarter guys.
I'm, just saying okay there.
Yeah of course, just on novel therapies.
Here's that though you've increased the potential Tam to $2 billion from what you previously indicated can you kind of explain what's built into that larger Tam.
Yeah. So thanks for the question Caitlin and I'll start and then I'll hand, it over to Josh So when we reported the.
$1 billion pipeline last year, and total addressable market opportunity I think there are two major differences.
First of all.
I don't think we are fully aware of the opportunity in front of us. So we used a fairly high discount factor in terms of the overall number of drugs that would be available to us and second is it had a lot of the risk factors entered in so it was discounted for things like clinical restaurants, SaaS competitive risk et cetera.
What we're showing you here is a full <unk>.
Total addressable market.
<unk> is a fully discounted one.
I think that one probably more address the bulk commercialized opportunity, but it didn't address what were now seeing which is a larger pipeline of potential opportunities.
Right and cable is the only thing I'd add to what Linda said is we're really encouraged by the size of some of the opportunities being a bit larger than what we assumed last year.
We will always have a mix in our pipeline of things that are a little bit smaller that things are a little bit larger.
Our confidence in the size of each drug opportunity has increased.
Got it. Thank you so much and just on the presale market. When can you expect to kind of offer the smaller <unk>.
Certain sizes.
Okay. So good question Caitlin and.
The what's offered today all are the smaller sizes, which is 510 and 20 ml most patient dose Ababa 50 ml.
<unk>.
I can't speak to Wang due to confidentiality reasons and competitive reasons, but I would say we're working aggressively at.
The next size formulations for <unk>.
Given given the success, we're seeing in the market and the patient uptake.
Awesome. Thanks, so much.
Thank you.
Our next question is from the line of Jason Bednar from Piper Sandler. Please state your question.
And then Tom This is Joe on for Jason Congrats on the nice quarter and the solid progress here.
Just wanted to start on the gross margin guide.
God. So it offers a large range with less than two months left in the year and we're just wondering do you feel comfortable more of the upper or lower end of that range and what can be due to finish on either end of that range.
Yes, Joe.
Thanks for the question.
Yes, you can see the gross margin has improved from from Q2.
Q3 by about 460 basis points as we get into Q4 here.
<unk> of it is the mix as our product mix versus with respect to our.
Products for our core domestic business.
Mix of service revenues for our novel therapies business, which we've been really calling out all year that mix. So so.
It's dependent on on work completed on the NRT service aspect of that.
I would say from a projection standpoint, we're right in that mid point.
Of that.
That margin call.
<unk>.
And that's where we we expect to be now obviously theres theres things that happen, we're ensuring that our supply chain continues to have stability in that.
We're watching our labor costs et cetera. So that's that's where I plan, that's where we plan to them so were in the quarter.
Okay got it thanks, and then following up on a couple of people to question knows us prior.
We're wondering with the penetration of the peripheral market where could that go over the next couple of years.
Or do we see the trajectory of the <unk>.
<unk> started to moderate at any level over time.
Yeah.
So great question, Joe So of course, we're going to look at analogs that we've seen in other markets such as vaccines et cetera.
But we believe that.
Once the larger sizes are introduced.
And.
Our new innovation in this areas introduced we believe that over the next.
Five year range that this will be more than half the market.
Okay got it and just one.
One more from us on <unk>.
Regards to 2020 through street numbers, so the street's modeling, 15% growth for 'twenty three.
Obviously <unk> be doing better than that year to date is this a good starting point as we look ahead to next year are there any factors you can pursue that you're considering in your models aren't really being considered are contemplated at this moment.
Yes.
We're not going to comment right now a lot on 'twenty three we're just in the process now of working with our board on our full 23 plan and getting approval for that but I'm just going to come back to the fundamental drivers that we need to think about for our market and our business. So so number one is novel therapies pipeline in there.
Strength, which we talked a lot about that today and we feel quite confident about that the U S. <unk> market has continued to grow we saw retract a little bit, which we generally see the quarters go up and down but calling that market probably for next year in the low double digit.
Range shows so that's going to be really important in and and we feel quite good about that and then the third piece that that we always think about is our international expansion offer next year, you'll see us come out more aggressively on our international expansions for next year.
That's really helpful. Thanks, Linda.
Thank you.
Thank you.
Okay.
Operator, my closing the call.
Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Linda <unk> for closing remarks.
Alright, so I would like to close with saying. Thank you again to the core of the team for a great quarter. Thanks to our investors for listening in today. Thanks to all the analysts for the great questions and we're.
We're appreciative to our entire team for a fantastic quarter, and we look forward to reporting next quarter take care.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
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Yeah.
Yeah.
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