Q3 2022 ReShape Lifesciences Inc Earnings Call
Yeah.
Good morning, and thank you for joining to reshape life Sciences' second quarter 2022 conference calls.
I would now like to turn the call over to Paula Schwartz from Rx Communications. Please go ahead.
Good morning, and thank you for joining to reshape Lifesciences third quarter 2022 earnings call I'm pleased to be joined by Paul Hickey, President and Chief Executive Officer of Reshape Life Sciences, and Tom <unk> Chief Financial Officer.
Paul will provide an overview and update on the company's activities on Tom will review the financial results for the quarter. He will then turn the call back over to Paul for some closing remarks, after which we will open up the call to a question and answer session.
As a reminder, this conference call as well as reshape Lifesciences SEC filings and website, including the Investor information section of the website.
These forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Actual results could differ materially from those discussed due to known and unknown risks uncertainties and other factors. These and additional risks and uncertainties are described more fully in the company's filings with the Securities and Exchange Commission, including those factors identified as risk factors in the Companys. Most recent annual report on Form 10-K.
As an additional reminder, reshaped soccer withdraw the NASDAQ trading under the symbol our F L X.
I will now turn the call over to Paul Hickey, President and CEO Reshape life Sciences Paul.
Thank you Paula I'd like to thank all of you for joining US this morning for our third quarter 2022 earnings call.
Those of you who took part in our second quarter earnings call. You May recall that that was my first day of employment reshape.
Well today marks my 98th day with the company and I'm excited to reconnect with you.
Ensure meaningful update on the current state of the business and exciting initiatives ongoing at reshape.
During the past three months I have been working hard to my team to understand how the business has been progressed since the predecessor company Intermedics five years ago.
Since our last call I've gained valuable insights into the company's potential to address the large market opportunity helping to alleviate the obesity epidemic.
And I'm thrilled about the enormous prospects that lie ahead of us.
As I mentioned last quarter. This is a significant reason that I chose to rejoin the company.
I am excited to say that there are great things going on here that support our mission to help improve the quality of life for those individuals who are at fault.
Obesity and related Comorbidities, which can often be a lifelong battle.
This morning, I'd like to highlight some of the changes we've made in the last 90 days what is working for us and what our plan is going forward.
Specifically I'd like to walk through the three strategies are what are referred to as our growth pillars that we're now executing.
The first pillar is to operate our business with a disciplined metrics driven mindset to ensure we have predictable growth and profitability.
The second is to continue to develop and launch new products and therapies to augment our best in class portfolio.
And the last is to continue to drive and gain search and advocacy for our product portfolio by sharing that it is backed by compelling evidenced showing effectiveness when addressing that continual care needed to fight obesity.
Before I can fully address these three growth pillars, let me touch on the obesity market that we're working hard to address.
The global multibillion dollar obesity market opportunity before us is enormous and remains largely untapped.
The largest in the market currently $2 5 billion people more than 30% of the global population is considered overweight or obese.
I'll figure out Thats expected to grow at 50% by 2030.
The global weight loss and obesity management market is expected to rise in the estimated value of 300 billion with substantial compound annual growth rate of six 7% from 2019 through to 2026.
Drilling down a bit the overall bariatric surgical device market alone is projected to reach $2 8 billion worldwide by 2025 with the U S portion accounting for $1 8 billion in the same timeframe.
Additionally, with 50% of adults in the U S trying to lose weight every year, we believe our suite of weight loss and metabolic health solutions is positioned to address the entire weight loss continuum.
But how do we get after it the metabolic and bariatric surgery market is complex. There is no single panacea for weight loss, and we must have a sound strategy to address the market needs and ensure our success.
Well as I mentioned, a month ago, our first growth pillar is to optimize our operations and have a disciplined measured approach to our business.
From day, one it was clear to me that the business model for reshape needed to change dramatically in order to become more disciplined sustainable and scalable as an organization.
We have made changes we are now on a path to profitability, which we achieved by continuing to partner with our physician advocates and leveraging our portfolio of proven products that management should obesity and metabolic disease.
To advance our sales efforts in August we appointed Susan Executive Nick I'm sorry.
I had the pleasure of working with for several years.
His leadership in conjunction with the implementation of the Salesforce platform.
Is enabling us to attract sales metrics and key performance indicators to predict and drive sales growth.
We now track customer engagement leads warm transfer of qualified patients to practices with a much higher level of confidence.
By tracking these metrics, we can adapt our marketing campaign to be more effective and efficient.
Case in point, we have pivoted, our media campaign to regional multi platform digital strategy aligned with our surgeon advocates.
This digital marketing approach has had an immediate impact and as a result has reduced our cost per lead.
By over 50%.
We have also taken other significant measures to rightsize the organization and reduce operating expenses. So we can preserve cash and invest in our future growth drivers to a greater degree, including sales and marketing to drive revenue both internationally and domestically.
Our second strategy, our pillar for growth is to develop and commercialize new products and therapies.
It seems simple, but it takes experience to be good at it and I am confident leaving this team that we're going to be very successful.
I am pleased to report having completed the limited release of our disposable reshaped calibration tubes, we have made additional improvements to the products and are planning a full rollouts in the coming months.
We expect this line extension of calibration tubes to be rapidly adopted by surgeons given their ability to help better visualize the anatomy, making it easier to identify potential defects during a broad range of bariatric procedures, such as laparoscopic sleeve gastrectomy gastric bypass too.
To be clear this product is used in procedures other than the lap band and therefore provides a great opportunity to increase future revenues.
The second product, we are commercializing has reshaped care, our virtual weight management platform.
When discussing our reshaped care and how we will impact the entire weight loss continuum, it's imperative that we touch on the virtual health care delivery space a.
A market that is expected to reach $95 billion by 2026.
We will win in this area by leveraging our telehealth counseling platform.
Reshaped care supports and coaches patients throughout their weight loss journey, regardless of the treatment pathway.
We were recently pleased with the reception we have received.
As we spoke to large self insured employers about reshape care.
How this important program can help to impact overall employee health and reduce employers health care cost.
Based on this positive feedback we are expanding this program to support both our potential partners employees and.
And our lap band patient leads to improve their health and achieve weight loss.
Reshaped care and as extension reshaped marketplace that includes reshape optimize our advanced line of premium supplements.
<unk> reshaped to distinguish itself with an incredibly valuable e-commerce platform with health care provider recommended competitively place weight loss and wellness products that address nutrition exercise sleep and stress.
Both platforms are a key element to our patient engagement and retention strategy.
On the horizon.
<unk> of the next generation physician by the redesign of lapping a lap end to.
This project was started with a goal to reduce patient discomfort and minimize postoperative adjustments by minimizing the potential for obstructions, while maintaining society.
As you may recall from previous updates. These are commonly known drawbacks of the lap band, but not that too incorporates an enhanced band reservoir technology that serves as a relief valve designed to alleviate discovered from swallowing too much good rigs.
We're excited about this next gen device surgeons I've spoken with about this new design believe though that that too will allow us to engage new surgeons and re engage those who have used all have been in the past.
Im excited to report that in the first part of 2023 were expected to submit for clearance with the FDA stay tuned for future updates.
As Excitingly, we have also advanced the development of our diabetes block stem neuromodulation, our DBS and device.
Which has the potential to address the significant global type two diabetes market.
Type two diabetes remains challenging so effectively treats for over 30 million Americans, who suffer from the disease, especially considered an estimated 50% of type two diabetics do not take medications as prescribed.
Data on the device was recently published in the peer reviewed journal frontiers in neuroscience and was presented in an abstract during obesity week.
Our innovative <unk> system may hold significant promise is designed to address type two diabetes by electrically blocking the vagus nerve signals to deliver which has been shown to decrease insulin resistance, while concurrently stimulating the vagus nerve feeding into the pancreas, which has been shown to release insulin.
The vagus nerve is involved in nearly every physiological action in the human body.
As a super highway carrying information between the brain and internal organs.
Vegas narrative has unlocked incredible treatments for numerous diseases, such as depression and prescriptions filled epilepsy.
The compelling data generated on our DBS and thus far was funded by NIH small business innovation research Grant our SBR grant.
And we have received subsequent SPR grant funding to focus on the development of this technology to treat hyperglycemia.
This strong SPR support further validates our belief that addressing type two diabetes in this manner has tremendous potential advantages over current treatment options.
We believe that this device may have the ability to address the clear unmet need for a new non pharmacological and patient specific treatments, providing improved efficacy and durability for type two diabetes.
We're very excited about this technology and its future role in fighting obesity with personalized therapy, and we will continue to collaborate with leading researchers and see continued non dilutive NIH grant support.
The third and last growth pillar for reshape as to gain searching efficacy by ensuring our products and therapies are supported by strong clinical evidence in other words, we need to provide an evidence based care continuum I'm pleased to say that the last few months have been tremendous for that plan.
Specifically the recent evidence based guidelines for metabolic and bariatric surgery issued by the American Society for metabolic and bariatric surgery, or <unk> and the international Federation for the surgery of obesity and metabolic disorders, or if so bode well for reshape.
The updates were long overdue, replacing that 30 year old guidelines issued by the NIH and 1991.
The guidelines now recommend metabolic and bariatric surgery for individuals with a BMI of 35% or more.
<unk> have a presence absence or severity of obesity related conditions.
And that would be considered for adults with a BMI of 30 to $34 nine.
A metabolic disease and.
Inappropriate selected children and adolescence. The guidelines further states that even without metabolic disease weight loss surgery should be considered as an option for people, whose BMI greater than 30%.
And who have not achieved substantial are durable weight loss or improvements in obesity related conditions using non surgical methods.
These new guidelines align well with <unk>, which is approved by the FDA for adult patients with a BMI over 30 with at least one obesity related comorbidity as well as any patient with a BMI of over 40.
Importantly, the lap band backed by 25 years of clinical evidence is the only FDA approved laparoscopic weight loss device on the market.
As a result, if supported by payers. These new guidelines can dramatically increase the number of patients eligible for bariatric surgery and is our strong belief that among approved procedures. The personalized lap and we will prevail as the least invasive surgical treatment option.
In addition to the new guidelines issued in conjunction with if so.
<unk> the S. MBS issued a consensus statement on lap end use and after care management.
Validating that the anatomy sparing lapping as a safe and effective weight loss solution.
We were pleased to see that many of the determination is reached in the statement align perfectly with reshaped own evidenced based best practices recommendations.
The experts who issued a consensus statement also concluded that proper aftercare related to the behavioral health and nutrition is critical to the success of the weight loss procedure.
I will say it again the consensus statement also concluded that proper aftercare related to behavior health and nutrition is critical for the success of the weight loss procedure.
That is important because we believe that our nationwide reshape care program aligns with this key component of lap band aftercare through which we offer effective and convenient virtual health coaching for all weight loss patients, including pre and post surgical bariatric patients.
Our philosophy to partner with organizations, such as the SMB us to identify and train surgeons as a core piece of our strategy and is critical to ensuring that the surgeons and health care professionals on the front lines are fully educated on the benefits of our comprehensive Latam program.
That together, we can provide the long term care required for patients to achieve safe durable weight loss results.
Taken together the updated guidelines and the consensus statement provide a crucial component to driving future adoption and top line revenue for reshape.
Before I turn the call over to Tom to recap our financial performance I want to highlight some additional metrics that are not captured in our 10-Q.
As you can all appreciate we have moved quickly to effect change and I'm confident that our path will lead to predictable and scalable growth.
Operationally, we have made tough, but necessary adjustments to right size, the organization and to shorten our path to profitability.
When discussing our third quarter revenue, Tom will highlight the decline in our international sales due primarily to the lack of resources and focus.
This international business is an important part of our mission and we will have resources now focused on reversing this trend.
For our U S sales. It has been previously discussed how complex the weight loss journey is for individuals and it may take up to six months or even over a year to commit the peritrich surgery.
It has also been previously reported how Covid omicron variant impacted our sales and lead generation program early in 2022.
This setback was real but temporary or.
Our commercial <unk> team comprised of both sales and marketing are now aligned to support our surgeon partners and drive growth.
There are some early indicators for success, including the number of surgeons. We have engaged trains and are now beginning to offer the lap band.
In 2022, we have 31% more surgeons offering lap that in.
In October alone, we had more than twice the number of surgeons use the lap and then in October of 'twenty one.
This is clearly evidenced by october's, 50% revenue growth compared to last year.
As I have stated we are optimistic about the metrics, we have established and will continue to optimize our business model to drive top line revenue and profitability.
I would now like to turn the call over to Tom Stankevich to provide a recap of our financial performance Tom.
Thanks, Paul.
And once again, thank you all for joining our webcast. This morning.
As a reminder, a full discussion of our financials is available in our press release and 10-Q.
I want to provide some perspective on the progress we have made thus far right sizing our organization and shifting our marketing effort to a targeted digital campaign, thus, reducing our operating expenses overall.
As Paul mentioned, we have made some difficult, but necessary adjustments to right size, the organization and shorten our path to becoming cash flow positive and profitable.
We've made a hard pivot in our marketing strategy, which has significantly reduced their sales and marketing expenses quarter over quarter.
As a result of this change our sales and marketing costs decreased sequentially from Q2, Q3, and approximately $2 million.
Additionally, our G&A expenses have also improved sequentially quarter over quarter due to a reduction in headcount and other professional and consulting services.
After excluding severance costs, our G&A costs decreased by approximately 400000 during the third quarter as compared to the second quarter.
Taken together these reductions in operating expenses have led to a notable improvement in our EBITDA loss or.
Our EBITDA loss for the third quarter was reduced by $3 5 million to $4 3 million compared to $7 8 million in the second quarter and $7 1 million in the first quarter.
We expect this positive trend to continue for the rest of this year and into the future.
Moving on to other key financial metrics for the third quarter ended September 32022.
Our revenue totaled $2 8 million for the three months ended September 32022, which represents a contraction of 24% or 900000 for the same period in 2021.
The decline is primarily due to a decrease in sales throughout Europe .
During the first quarter of 2022, the emergence of the past spreading omicron buried a COVID-19 severely impacted the company's ability to sell worldwide.
We didn't see revenue begin to increase as the omicron began to subside.
During the three months ended September 32022, we placed more focus on domestic sales, resulting in lower international sales.
We expect revenue will continue to increase through the remainder of 2022 as we focus on a targeted digital media campaign near bariatric surgical centers that sell the lap band system.
We also anticipate that the impact of the MBS consensus document on lap band as well as the Smbs and if so is release of updated guidance will positively affect revenues throughout the remainder of 2022 and beyond.
Gross profit for the three months ended September 32022, and 2021 was $2 1 billion.
Gross profit as a percentage of total revenue for the three months ended September 32022 was 75, 1% compared to 57, 6% same period in 2021.
The increase in gross profit percentage is due to an increase in domestic sales, which have a higher gross margin than the international sales. Additionally.
Additionally, as part of the right sizing of our organization, we had a reduction in payroll related costs during the third quarter of 2022.
We expect margins to continue to improve as a result of the recently instituted price increase for the lap band.
Sales and marketing expenses for the three months ended September 32022 decreased by 900000 to $2 6 million compared to $3 5 million for the same period in 2021.
Decrease is primarily related to a decline of $1 million.
And stock based compensation expense and overall marketing expense offset by a $300000 increase in consulting and professional services work on developing the reshaped care platform.
General and administrative expenses for the three months ended September 32022 decreased by $8 2 million to $3 9 million compared to $12 1 million for the same period in 2021.
The decrease is primarily due to a decrease of $8 1 million stock based compensation expense and payroll related expenses.
Research and development expenses were 600000 for the three months ended September 32022, compared to $1 6 million for the same period in 2021.
The decrease is due to previously mentioned decrease in stock based compensation.
This was offset by a small increase in consulting and professional services related to our DBS and device.
We ended the quarter with $6 2 million of cash and cash equivalents and remain debt free on our balance sheet.
We continue to evaluate our cash runway and our cash needs on a go forward basis.
Our go forward plan includes scaling our business and investing in growth drivers, which include Latam and reshape care.
We have made some significant steps and right sizing our business through cost reductions and business strategy.
Order to achieve growth, which is more predictable and scalable.
In order to achieve the expansion of our business strategies and continue our growth drivers, we may need to seek additional financing opportunities to support our expansion in order to shorten our time frame to sooner become cash flow positive and profitable.
With that I will now turn the call over back to Paul.
Thanks, Tom.
On your last point in time, I want to emphasize to everyone on the call that any additional financing strategies that we have executed or will execute.
Will support our growth pillars, and it will be used to accelerate our growth and path to profitability.
Before we open up the call for Q&A I'd like to recap, what we have accomplished and our pillars for success over the next 90 days and beyond.
As Tom detailed we have significantly reduced operating expenses and right sized investments in quality and regulatory and finance.
So we can invest in growth initiatives.
Our new targeted.
So mark liturgy designed to align with our health care partners has already reduced our cost per patient lead by over 50%.
We will leverage the available data, we have to audit and verify our progress attaining the key performance indicators to both increase margins and drive revenues globally.
We will also continue our engagement with organizations such as the <unk> with the intent of forming a world class Advisory Board of Bariatric surgeons with our guidance, we will continue to refine our business model and develop and execute a three to five year strategic plan for success.
This concludes our prepared remarks, so now we'd like to open up the call for questions.
Operator.
Okay.
Thank you as a reminder to ask a question you will need to press star one on your telephone.
Please standby, while we compile the Q&A roster.
Okay.
Our first question comes from Anthony Vendetti with Maxim Your line is open.
Thank you.
So I just wanted to first focus on lap band two and there's a couple of questions about the revenue so.
And two you pointed out Paul.
The advantage is when is that.
Commercially going to be available.
Not not known or disclosed yet our plans are to submit to the FDA in the first part of next year and we'll keep you updated as we do that in progress in terms of discussing with the FDA and getting a better target on when we can actually commercialize it.
Okay do you think first half first quarter.
First quarter.
First quarter Okay.
And then I know part of the.
Revenue drop off which was <unk>.
International.
With anything would you attribute any of it to you.
A reduction in sales and marketing or <unk>.
Is it just.
You said Youre 98 de <unk>.
Ben.
Sort of refocusing the company.
And determining how to best.
Apply the funds that you add sales and marketing.
Alex would you gauge.
Or how should we gauge.
The interest in the lap band and revenues as we move forward.
Yes, the international business.
Quite honestly.
Disappointing for me to look at as I got on board.
The appointment of nicknamed side, which I mentioned and Nick has.
Global experienced sales executive actually brought on a lot of distributors. When he was at last with reshape a few years ago.
Reconnecting and keeping the.
The marketing support and other support that we had in the past for international.
Our major things that we need to do to to reverse that trend.
But pretty confident with mixed ability and the receptiveness of Blackburn internationally I think thats been previously discussed that there is this competition internationally with lower priced.
Gastric bands they don't have near the quality of reputation. That's a lifetime does in terms of success and certainly the volume of use over the years with over $1 billion for lap band and much much less for any other competition that may be out there.
So there's competition out there and it's going to if they're going to.
Sort of battle us, it's going to be on pricing.
But.
As I said are our mission includes addressing global obesity and the business abroad outside of the U S. Europe and other areas of the world are important so we're going to be aggressive to go after it but we'll be smart about it make sure that.
It's.
Supportive of our path to profitability.
Okay, Great and then just switching gears to reshape care.
Yes.
So can you can you can.
You can tell it.
The reception so far I know, it's early stage, but how many patients have signed up.
Where's that at at this point.
Yes early early launch phase of just getting things started.
The.
Honestly, what was a big surprise and pleasant surprise us.
Receptiveness from.
One large employer in particular.
And.
Yes, it was completely new to us in.
It was our thought that employers that are self insured are looking for ways to reduce their health costs overall.
Any health and wellness coach director VP, whatever they may be titled in the company are looking for ways to get those individuals who are.
Obese to get on the right path so.
That has.
But I've been a pleasant surprise, but it also is requiring us to pivot a bit to make sure that we have our resources aligned to.
Hit the ground running with them and make sure that as we move that towards the finish line in terms of kicking off that program with.
This particular employer, but you'll hear more about when we can.
Have everything finalized.
That has been.
Something thats.
Having us put reference into making sure the launch goes it goes well.
So to answer the question early on space and.
A big focus for US now is getting ready for <unk>.
Larger employers.
The one employer.
We can talk more about that partnership we will but for now it's work in progress.
Okay, great. Thanks, very much I'll hop back in the queue.
Great.
Thank you.
One moment.
Our next question comes from Ben Hayner with AGP. Your line is open.
Good morning, gentlemen, thanks for taking the question.
First off for me on lapping two.
The plan is fairly next year is that going to be a PMA supplement there.
Yes.
Pathway to regulatory clearance.
Sure.
So lined up.
Thanks Ben.
It is it would be a PMA supplement.
<unk> had some discussions with the FDA.
Yes.
Old enough maybe experienced enough to know that can always change so to be clear on the call or is the plan is to submit to the FDA.
In the first quarter and what happens after that is kind of in the Fda's hands.
But I'll have to but I prefer to do is making sure we get more discussions with the FDA before we submit but as soon as we get some.
Predictable timelines I'll be sure to disclose those but exciting and everything that I've seen about the products and the testing that has gone into it.
Testing yet to be done but.
Probably Moreover, the receptiveness of the surgeons that I've spoken with and shown the.
Device too.
And their belief that it's going to be very large sharpener.
For them as well as physicians, who stepped away from the lap band because of just not wanting to be burdened with the aftercare adjustments.
<unk> requires today and again the design one of the design intention is to minimize those after surgery adjustments that a patient would mean by kind of increasing the fluid volume given the surge in our larger sweet spot to here.
Okay.
That makes sense do you think you'll need to do.
Human trials.
For the PMA supplement.
You can speculate and say that the FDA may say do a post market surveillance.
The device once its launched.
Added investment would be needed to do that in terms of follow up study in FTE.
The FDA typically will do.
Five years.
And at some level some number of patients. So that's something that is always in.
And mix when you go to the FDA with PMA supplement.
So more likely than not.
It'll be close market anything.
But there isn't anything that.
A triangle.
Take place before the submission.
Right exactly.
We ended up doing is having.
The ability to release it commercially.
In the U S again, I Havent mentioned anything about CE, mark, but thats not going to be first quarter next year, but.
The FDA did likely after we have the release approval to sell the device will also be required to study it.
To some level.
Okay.
And then.
Just thinking about it.
Laugh and laugh at.
Presumably there wouldn't be any lapping one inventory charges.
Sell those internationally.
But is there any worry that.
Talking about.
Let me add to that you might get patients for physicians.
Nonetheless and too.
No.
Whats kind of really interesting and.
Again, our launch our launch plan Hasnt been 100%.
Finalized, but you have to wrap up inventory and a grant down inventory.
Based on demand and receptivity and again, we have to get through the FDA as well, but what's interesting is working part of this design.
For the life of that too can actually be retrofitted onto the lap and one as far as we can tell today.
We will have to get through the FDA, but thats. The case then.
You could potentially have.
Surgeons, who are struggling with adjustments.
Have a chance to go in and they could actually go in and.
Change out of the world.
All parts of the left hand, one is with the new component on the left hand too.
So we'll see what happens there, but that's that's one of the <unk>.
Surprises are or I.
I guess good news things that we've talked about internally. If we can have this sort of marketed as <unk> and then for those patients with <unk> and the surgeons are finding themselves doing more adjustments and they want they could potentially do a retrofit.
Okay interesting.
Looking forward to see more on that and then on reshape care.
Self insured employer opportunity.
It sounds like.
You've got one on the.
Already but do you see you have a sense of.
What the sales cycle is going to look like.
Maybe some of these larger employers are mid size employers.
Yes.
Mike your target.
Bob.
As you would.
Speculate that if you get one notable employer.
To do this well and.
It will lead to other doors that may open.
That's what I've seen happen in the past and I think could happen here.
It's just a matter of doing it really really well with.
Out of the gate.
And because.
Because of.
This being an early launch for us it's easier to open up appreciate care to our marketing leads.
And not necessarily.
Be flawless, but I think with large employers who are dialing it up a bit.
So it was good timing for me to get onboard and see what we're doing in half.
Positive feedback from this particular this one larger employer and.
We'll see what happens as that goes well and how quickly we can open doors with other employers.
It does tie to something else just to expound on it there is because of the.
The <unk>.
<unk> and if so.
Guidelines that were released there are surgeons I spoke with at the <unk>.
Symposium this past weekend in San Antonio is on Thursday, Friday and Saturday.
We are pushing for advocacy for these guidelines will be adopted by.
Their institutions and so you are finding a lot of.
Smaller payers are now seeing insurance companies now, saying these new guidelines if you are.
<unk>.
<unk> at 30, you should seek out surgery and get get approval for that.
So.
The tightness changing and.
More to share on that but it's.
The employer side of this is just another.
A piece of the puzzle you can hit all the insurance companies with the guidelines, but a lot of the lives in the U S are covered by.
The employer as their self insured typically over a 100 or so employees can can move in that direction.
Okay and just.
On the reaction of the docs to the new guidelines.
I would imagine that.
Favorable, but any other color that you can add there.
Yes.
In their minds, a longtime comment of it's over 30 years since it's been updated and.
I think what I've seen over the last 98 days.
I've been a part of this industry over five years ago.
Seeing the society is stronger in terms of their how they are.
<unk> voice, how they are more strategic.
And.
<unk>.
One thing they told me at the conference and I've always sort of had this in my mind about this evidence based care continuum as something that this specialty in terms of bariatric surgery really need.
It is something Thats been developed in orthopedics is developed in a lot of other specialties.
Where there is evidence for this algorithm that physicians need to consider when looking at a care plan for an individual.
<unk>.
The Society leaders told me in San Antonio is that the entire focus going into next year and beyond is to treat obesity.
Treats obesity care plans as if they were treating cancer. So if you look at the approach and oncologists will use they have their entire toolbox their armamentarium and they start with conservative treatments and try to move aggressively but a lot of the individuals that have obesity is a lifelong disease. It will relapse, it's something that you've got to have that support post <unk>.
If they do need surgery, again, thats, where we are uniquely positioned with reshape care to support individuals both proper.
Rapidly if they do end.
End up getting surgery as well as postoperatively, so very interesting sort of shift in the mindset of the leaders within the society, but I think that's going to bode well for just more people today that are obese.
I don't have a chance to hear from their primary care physicians are the employer or whoever.
Yes.
BMI maybe.
30, but you may be okay, feeling like you don't need to seek treatment, but you could probably go get help.
It's just going to get worse, so we'll see what happens, but it's exciting to see nonetheless.
Yes.
Obviously favorable for you guys and then lastly for me.
Appreciate it.
Okay.
No more surgeons.
Offering lap and then.
2021, and the doubling the surgeons.
Using lap and then October versus October last year could you hear me.
<unk>.
That cover a good month last year.
October .
Timber lesser number.
October was.
I'm trying to recall October was a good number in my recollection in time do you have any yes October October .
October was the <unk>.
So they are.
Fair number it wasn't it wasn't it was it certainly wasn't.
The lowest we had in 2021, but it wasn't the highest either but it was a solid it was a solid month.
But its a fair call, but just the idea of the surgeons.
The revenue number we did talk about give a percentage, but the the surgeon adoption.
Piece was important for.
For me to look at that as we on boarded I think 45 surgeons prior to my arrival and the first part from October through the first or second quarter of last year.
Of those 45 surgeons.
I'll throw a number out but.
I've got to be held soon as well, but I think it's just over 30 of those have re engaged and started using the others are in the process of either newly trained or there's something you probably familiar with called the PAA business associated agreement that has to be signed before we start the process of providing leads so that's one of the metrics. So I'm looking at is how many <unk>.
Surgeons new searches.
<unk> and then what is the timeline for them to actually start seeing patients and doing the lab Pan.
And some of them happens right away others. It takes months depending on the institution in the paper work, we have to put in place.
Okay.
Great well, thanks for taking the questions.
Thanks Pat.
Dan.
Thank you.
And we have a follow up from Anthony Vendetti with Maxim Your line is open.
Okay.
Thanks.
Just wondering.
When the Q would be filed in.
We have the number of.
Average.
Shares outstanding and GAAP EPS for the quarter.
Yes, sure all of that all of that will be filed.
Today.
Probably towards that towards the end of the day, but think youll be on file later this afternoon.
Okay, great. Thanks very much.
Sure.
Thank you and I'm showing no further questions in the queue I'd like to turn the call back to Mr. Paul Hickey for any closing remarks.
Alright, thanks, everyone. Thanks for the questions Anthony.
Yes, I think we've been successful underlying the progress we have made right sizing the organization to be more disciplined.
Predictable sustainable.
Sustainable and scalable and its all language I'm using internally.
And I think we've conveyed how excited we are I know I am about the future.
We will continue to work diligently and build our commitment to provide evidence based care continuum. As we described a personalized devices and therapeutics, including the FDA approved Latam.
I need to thank our employees for putting up with me probably for the last 90 days, but the board members customers vendors existing and new shareholders for your continued support of reshape.
I do believe it's truly exciting time as we continue to solidify our position as the premier physician mud weight loss company I look forward to engaging all of our stakeholders our health care partners.
And shareholders.
This concludes today's conference call. Thank you for participating you may now disconnect.
Yeah.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
[music].
Sure.
Okay.
Yes.
[music].
Okay.
[music].
Yeah.
Yes.
Yes.
[music].
[music].
[music].
[music].