Q4 2022 Neuronetics Inc Earnings Call
Good day, and welcome to neuro networks fourth quarter and full year 2022 conference call. At this time all participants are in a listen only mode.
After the Speakers' presentation, there'll be a question and answer session and instructions will be given at that time.
As a reminder, this call's being recorded.
I would like to turn the call over to Mark Klausner, you may begin.
Good morning, and thank you for joining us for the neuro networks fourth quarter and full year 2022 conference call joined.
Joining me on today's call are narrow networks, President and Chief Executive Officer, Keith Sullivan, and Chief Financial Officer, Steve Furlong.
Before we begin I would like to caution listeners that certain information discussed by management. During this conference call will include forward looking statements covered under the Safe Harbor provisions of the private Securities Litigation Reform Act of 1095, including statements related to our business strategy financial and revenue guidance the impact of Covid.
19, and other operational issues and metrics.
Actual results can differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the Companys business.
For a discussion of risks and uncertainties associated with <unk> business I encourage you to review the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K, which will be filed later today.
The company disclaims any obligation to update any forward looking statements made during the course of this call except as required by law.
During the call, we'll also discuss certain information on a non-GAAP basis, including EBITDA.
Management believes that non-GAAP financial information taken in conjunction with U S. GAAP financial measures provide useful information for both management and investors by excluding certain noncash and other expenses that are not indicative of trends in our operating results.
Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans.
To benchmark, our performance externally against competitors and for certain compensation decisions.
Reconciliations between us GAAP and non-GAAP results are presented in the tables accompanying our press release, which can be viewed on our website with that it's my pleasure to turn the call over to neuro genetics, President and Chief Executive Officer, Keith Sullivan.
Thank you Mark.
Good morning, and thank you for joining us I'll begin by providing an overview of our recent performance followed by an operational update Steve will then review our financial results and I'll conclude with some thoughts on 2023 before turning to Q&A.
We are pleased with our performance throughout 2022, a year, which included several record quarters.
And the achievement of key milestones.
We shipped over 210 systems to customers, bringing total systems shipped all tied to over 2000.
In addition, our efforts to drive increased treatment session utilization has continued to pay off.
As of the end of the year the number of all time treatment sessions surpassed $5 3 million.
Across roughly 145000 patients.
This all contributed to the total revenue growth of 18% for 2022.
<unk> that the investments made over the past two years in marketing practice development and patient education initiatives are working.
Proud of everything that we have accomplished in 2022.
Which we capped off by a strong fourth quarter and I'd like to thank our employees, who delivered this high level of success by way of their hard work throughout the year.
For the fourth quarter total revenue was $18 2 million up 21% over the fourth quarter of 2021.
This strong performance was primarily driven by record treatment session revenue as well as continued capital equipment sales growth.
As we've seen our programs and initiatives take root.
Neurostar system revenue was $4 6 million up 64% over the fourth quarter of 2021.
The success is due to the ongoing hard work of our strong team of area sales managers, who found their group and nurturing and converting our robust pipeline.
Which was strengthened by yet another sold out Neurostar summit.
The U S treatment session revenue was an all time record of $12 5 million up 11% over the fourth quarter of 2021.
This record revenue was the result of positive growth at the local per click sites and was accomplished despite slower than anticipated growth at our largest service provider as they work their way through merger integration.
Our per click success was driven by our investments in five star's training program.
The expansion of our <unk> tool in a more offices and greater availability of practice management training.
Now turning to our operational highlights our first focus area is increasing customer and patient awareness.
We once again had a completely sold out Neurostar summit in Chicago attended by 50 participants from 38 different practices.
This event received outstanding feedback, which led to the conversion of several high quality customers and the growth of our pipeline.
The Neurostar summit's have proven to be the number one event for educating and partnering with new Tms practices.
Our area sales managers have done an excellent job, helping these potential customers see the benefits neurostar can bring to them and their patients.
The implementation of our proprietary PHP 10, digital assessment tool, which allows our neurostar practices to easily identify patients within their practice, who are candidates for and have expressed interest in our neurostar treatment has been extremely fruitful we collected now.
<unk> 8000, THQ tenants in 2022 and.
And we will continue to enhance this tool to include new features within track star to better manage and identify patients who are candidates for neurostar treatment.
Our Neurostar University in Charlotte North Carolina continues to receive excellent.
Reviews from our customers.
By year end, we had hosted eight full capacity classes with attendees representing 75 accounts.
And we now have a lengthy waiting list.
As we continue to evolve the capabilities of the platform as well as the support services that we offer our customers. These classes will continue to be highly beneficial for both the new and existing users as we seek to leverage the power of Neurostar to help more patients suffering from mental disorders.
We have begun to see positive benefits.
Linked directly to the NFU training classes, such as the increase of 23% and treatment session utilization and an increase in THQ can utilization from these NFU attendees.
Our second focus area is the continued optimization of our commercial organization.
In the quarter, we started to see some benefit from the efficiencies gained from our newly implemented sales force reporting tool.
Which help our pbms better understand our customers their patient base and utilization trends.
These tools allow the <unk> to help our account set goals.
And measure their progress towards achieving them.
In particular, allowing accounts to more efficiently and more effectively identify and treat people in need.
From within their own existing patient base.
As planned we hired four additional <unk> earlier this year due to the new account growth over the course of 2022.
These additions will support the growth of our installed base and ensure we provide our customers with the highest level of service and support.
Our third area of focus is leveraging exclusive commercial partnerships.
We recently announced an expanded commercial partnership with Green Brook, Pms, which runs through year end 2028.
Under the agreement, we will be the exclusive supplier of Tms equipment to Green Brook.
With all other Tms devices being replaced with neuro stars as their existing leases expire.
This expanded partnership will deliver several important synergies, including co branding and co marketing opportunities.
Enhanced patient and clinical awareness improved.
Improved patient access to care and a collaboration on product development and publication.
Importantly, this agreement converts the entire green brick organization, including success Tms to our consumable pricing model and away from a fixed price one.
We will offer.
Our full spectrum of support and programs to Green Brook centers and practitioners in particular, we will offer tailor NFU classes and integrate our Phd tens and track star to help Green Brook reach and treat patients more effectively with.
With the help of this agreement neuro <unk> and Green Brook, we will be able to make neurostar advanced therapy for mental health accessible to a growing number of people who are struggling with mental illness.
While we are enthusiastic about the long term partnership with Green Brook and our.
<unk> to help them drive increased patient volume in their centers I did want to highlight that we have continued to see disruption, resulting from the merger of green brick and success and the subsequent integration of the two businesses.
As Steve will mention later when he provides our guidance we expect some revenue headwinds in 2023 as they continue to work through combining their company.
Lastly, I want to provide an update with our clinical and regulatory progress in January we announced a peer reviewed publication, which shows Neurostar Tms as an effective non drug treatment for depression with co morbid anxiety.
Significant anxiety symptoms are present in the vast majority of depressed individuals and the majority of patients with anxiety disorders also have associated depression.
We were able to study actual results and establish the effectiveness of this crucial therapy option for patients with anxious depression.
Thanks to the strength of texstar, and the largest clinical dataset for Tms in depression.
Now for a quick update on the expanded Medicare coverage.
In February and GFS updated their healthcare policy, allowing nurse practitioners and physician assistants, who are within their scope of practice to order and provide tms treatment to their patients with major depressive disorder.
This is a welcome change as we have always recognized the importance of psychiatric nurse practitioners in delivering mental health care.
This is especially true now given the shortage of healthcare professionals.
In addition, Unitedhealthcare recently announced a positive coverage change, which expands access to neuro star therapy Optum.
Behavioral health benefit manager for United reduce the number of prior medication failures for Tms eligibility from four down to two.
And remove the requirement for a trial of evidence based psychotherapy.
As the largest healthcare insurer in the country covering $23 8 million lives Unitedhealthcare and Optum decision to make neurostar more easily acceptable and make a real difference in helping to alleviate the burden of drug resistant depression.
To continue to provide greater access to Neurostar therapy, we recently expanded our reimbursement team. This larger team will be able to increase our advocacy efforts related to favorable health policies and provide our customers with best in class reimbursement and billing support.
In closing I'd like to express my gratitude to our team for their dedication and perseverance and navigating the challenges of the current operating environment with these.
This hard work has enabled us to successfully execute on all initiatives during the year and bring relief to patients suffering from depression.
Looking ahead to 2023, we anticipate that the momentum we have built will continue to grow as we build on the solid foundation, we have laid throughout 2022.
With that I'd like to turn the call over to Steve.
Thank you Keith total revenue for the fourth quarter was $18 2 million.
An increase of 21% over fourth quarter 2021 revenue of $15 million.
U S. Neurostar advanced therapy system revenue was $4 6 million.
Compared to the prior year revenue of $2 $8 million it was up 64%.
Company shipped 58 systems in Q4 up from 48 systems shipped in the fourth quarter of 2021.
U S treatment session revenue was $12 $5 million.
An increase of 11% over fourth quarter 2021 revenue of $11 2 million.
The revenue growth was primarily driven by an increase in utilization in particular, among our local per click customer segment.
In the fourth quarter of 2022 revenue per active site was approximately $11500 compared to approximately $12200 in the prior year quarter.
Excluding Green Brook and success revenue per active site was consistent year over year. Despite having added approximately 100, new active sites during the year.
Gross margins were 76%.
Consistent with the fourth quarter of 2021.
Operating expenses during the quarter or $21 5 million.
An increase of $3 $1 million compared to the fourth quarter of 2021.
The increase was primarily driven by our expanded sales force the opening of NFU.
They're then expected sales commissions incremental head count and product development investments in clinical as well as increased costs from inflationary pressures.
During the quarter, we incurred approximately $2 1 million of noncash stock based compensation expense.
Net loss for the fourth quarter of 2022 was $8 3 million or <unk> 31 per share.
Compared to a net loss of $7 $6 million or 29 per share during the fourth quarter of 2021.
EBITDA for the fourth quarter of 2022 was negative $6 $5 million.
As compared to negative $6 3 million for the fourth quarter of 2021.
As of December 31, 2022, cash and cash equivalents were $73 million.
We continue to work with our lender SLR capital partners on an updated credit facility.
We are on track to close on this new facility in March 2023.
Now turning to guidance for the full year 2023, we expect revenue in the range of $66 million to $72 million.
As Keith mentioned, our guidance for 2023 assumed lower treatment session revenue from certain service providers, but.
But continued strength from our local per click customers.
For the first quarter of 2023, we expect revenue of 15 million to $16 million.
We expect total operating expenses for the full year 2023 to be in the range of $84 million to $88 million.
For the full year, we expect cash utilization from operations to decrease year over year cash.
Cash utilization will be the highest during the first quarter as it includes our national sales meeting as well as prior year bonus payments sales commissions and retention costs.
Our operating plan continues to show that we will achieve cash flow breakeven with cash on hand.
Our path to profitability is still on track thanks to our projections for topline growth.
On the gross margin profile and the careful management of our operating expenses.
I would now like to turn the call back over to Keith.
Thank you Steve 2022 was a critical year for neuro networks as we continue to drive the accelerated adoption of Neurostar.
We have shown that the clinical results are superior we have made significant investments in building the latest and most talented commercial team in the business.
We have demonstrated unmatched ability to support our practices by assisting them with patient education and awareness campaigns to promote long term success.
To continue that success, we will focus on a number of key initiatives during 2023.
One increasing the number of customers who participate in Neurostar University.
Two working to incorporate a high percentage of customers into co op marketing.
Three creating a network of accounts across the country that following neurostar best practices.
Beginning with increased customer participation and Neurostar University.
As the initial cohort of customers has gone through training and Su, we have clearly seen the immediate positive benefits at these accounts, including better Phd Pan uptake and increased treatment session utilization.
Because of this we are working to increase the number of existing and prospective customers attending NFU classes.
Which provide important education to the providers to allow them to deliver better patient outcome.
The classes are crucial as we continue to develop neurostar capabilities and features such as our expansion into OCD as well as the introduction of <unk> and the anti cap.
Going forward, we are offering up to two classes per month throughout the year and incorporating attendance costs into our co op marketing program.
Our second focus for 2023 is to incorporate a higher percentage of our customers into our co op marketing program.
There are over 60 customers, who are currently utilizing the benefits of our co op marketing program on a regular basis.
Our marketing program is one of our Chi in the Tms industry. It provides us with an incremental opportunity to partner with our customers to help support their business and provide patients with access to care through increased awareness with co branded localized marketing campaign.
<unk>.
Customers, who have participated in co op marketing program have seen an average increase of four patients per quarter.
We will continue to emphasize the expansion of customer participation throughout the year to bring the benefits of the program to more customers and their patients.
Turning to our third and final focus for 2023.
Creating a network of accounts across the country that follow Neurostar best practices.
Over the past few years, our company has made significant investments in the organization and the development of best practices for each customer to market effectively and drive long term growth.
We would like to take certain aspects of these proven practices to a broader network of our accounts.
As we look ahead to 2023, we want to set certain standards across the accounts, we serve such as offering consistently high levels of service and increasing patient marketing within their offices.
We.
Spec to see these standards and customers, who fully utilize the uniqueness of the neurostar offering and our approach to the market.
We will continue to follow our plan in 2023.
We have done tremendous work over the last two years to set ourselves up for success.
And we have the strategy in place to drive the accelerated adoption of Neurostar and bring relief to more patients suffering from mental health disorders.
With that I'd like to open the line for questions.
If you'd like to ask a question. Please press star one one if your question has been answered and you'd like to remove yourself from the queue. Please press star one again, one moment, while we compile the Q&A roster.
Our first question comes from Bill <unk> with Canaccord. Your line is open.
Hey, great. Thanks, good morning.
So obviously I think the.
The biggest question is on guidance and.
Greenberg one what do you contemplate at the low end and high end in term.
How does that reflected with Green Brook kind of what percentage of your revenues are they today and what do you expect out of that versus kind of the rest of your business.
Okay.
Hey, Bill this is Steve obviously with the press release yesterday, and we did have to scramble and adjust guidance at this point all we know is they do anticipate closing 50 stores.
With a 10% impact on revenue.
Don't know the mix, we don't know which stores in Aerostar, we don't know which percentage of revenue is.
Provide over assess Tms.
And so we took the approach really based on their contributions.
In 2022 versus our expectations in 2023 for growth.
I think we're in a wait and see mode. At this point. So you saw in our K well you haven't seen in our K, yet, but you will yes there are.
A little bit north of 20% of our business.
So we believe the 66% to $72 million ranges is appropriate at this time and you can also see we did expand the range in revenue from our typical 4 million for the year to fix.
Again, we just need to see how this plays out through the month of March and into the early part of Q2.
Green broken out since the end of March and maybe there'll be some more clarity.
And to their plans and how it impacts us.
Yes.
Well.
Steve asked another way what do you expect to your core business in 2023.
You've historically, if I look back <unk> grew 18% and 22, 12% in 'twenty, one and even to go out of the growth as we exited 2002 was out of the non <unk> businesses. So.
Given that 80% of your business kind of what do with the contemplation of growth out of that core business as you think about 2023.
Yes, I think it will be consistent with what we saw in the second half of 2022, so in that 20% range.
Again, if you look at our Q4 number 21% over prior year.
It was negatively impacted by Greenberg and successes performance, though.
The park Cliff consumable segment and some of the other segments are performing quite well. So again I think it'll be in that 20% range.
And then last on this guidance question and then I'll jump back in is just how do we how do we think about kind of the capital versus disposable, especially getting.
Getting our hands around like the assumption is probably given their shutdown 50 centers they can move.
Capital around how do we think about capital in 2023 versus disposable thanks for taking my questions.
Sure Bill, Yes capital is going to be consistent with 2022.
So we've communicated between $45 million 50 systems, a year, we get slightly more than that last year.
Anticipating.
That consistent level in 2023, so there won't be an impact from the <unk> integration efforts.
We also expect international revenues to be flat. So all of the growth in 'twenty three will be related to treatment sessions.
I mean 45 to 50 systems a quarter not for the full year correct.
Yes. Thanks.
Thank you. Our next question comes from Adam <unk> with Piper Sandler Your line is open.
Hey, Keith.
Steve Thanks.
Thanks for taking the questions here.
Wanted to follow up a little bit on the guidance.
A question and I guess I'll ask you about kind of.
Cadence.
You, obviously gave Q1 guidance maybe.
Hey, a lighter than expected but.
Just kind of help us think through kind of how you see.
Your business kind of progressing over the year.
Maybe I'll start there and then I have a follow up thanks.
Thanks, Adam Yeah, if you look at our historical performance.
I go back to 2018 so.
Year prior to IPO.
Revenue cadence by quarter.
Is Q1 is 21% to 22% of annual revenue.
Q2 was about 24% to 25%.
Q3, 25% to 26.
Q4 is always our strongest quarter at 28% to 29%.
And so Q1, we always have the reset of deductibles.
Patients have to go through and get their benefits investigations redone.
And so the internal teams here.
<unk> been processing about 400, or so a week and Thats continued into early March. So that's really the biggest pressure on Q1.
Again, it's very typical for the past five years.
Okay I appreciate that color Stephen I guess, just one more on the guidance on I had a follow up but just kind of obviously a lot of focus on the Green Brook.
Announcement yesterday and kind of how that impacts you guys.
But if we just kind of look back.
Broadly.
It sounds like you.
We're very confident in the business ex Green Brook.
So I guess one question I have just on the macro is high.
How are you thinking about this year 2023.
<unk>.
And a potential recessionary environment is anything factored into the guidance. There are you, allowing for some additional conservatism just kind of maybe walk through the philosophy.
<unk>.
Yeah, I mean, there is.
There are no recessionary.
<unk> in our guidance.
I'm sure you remember Adam at your conference in New York that commute.
Indicated we were comfortable with where the consensus was for the year and that was $73 million range. We're also anticipating.
Mid to high teen growth year over year.
Again, the Greenberg press release yesterday.
Was a little bit surprising.
So.
I think we need just some time to work through the impact.
Otherwise you saw our performance in Q3 and Q4.
Even with I would say.
No to slow growth from them, we were still at that 20% level.
And I think we're confident that we'll be able to maintain that in the other segments.
Okay.
From a from a marketing.
Standpoint, we have been working closely over the past couple of months with the green brick team.
Putting together a plan on how they would attend NFU, how they would market within their practices.
How we would help them get THQ cans and so there was some <unk> of the closing of the stores, but I believe that.
We have put together a solid plan with bill and his team to.
See if we can take the remaining stores and get them back up to their prior service levels.
Okay I appreciate the color guys and one last one if I may just on some of the.
Here changes.
Medicare coverage in the United News from from this week.
Streamlining therapy.
Maybe just kind of how do you think about the impact from from those.
<unk> is there something that can impact the business near term or.
Do you think we need several quarters to kind of.
See any tailwind ultimately materialize, thanks again for taking my questions.
So Adam on the reimbursement side, I think with Unitedhealthcare dropping from four to two it is a it is a great sign many of the other payers follow what United Healthcare does.
As recently as last fall Aetna went from two to four because thats, where United healthcare was so.
We are hoping that the other payers dropped their requirements to and follow United Healthcare's lead.
Quite honestly there are plenty of patients out there that have failed for drugs. So we're not in.
There is no shortage it does expand the market when we can.
Drop it down to two and I think our hope now is that United and the other payers make it easier to go through the prior authorization process. So it does expand our market. It does help our our patients now we need to help our accounts with.
With simplifying prior authorization.
Thank you. Our next question comes from Margaret <unk> with William Blair. Your line is open.
Hey, good morning, Thanks for taking the question.
Hey, Martin, China, and with all my colleagues on the on the guidance side, So I apologize for that but I guess one more.
<unk>.
Kind of a simple one I guess, what gets you to the high and the low end of the range because it's obviously quite broad so and more specifically I guess the need green Brooks to improve to get to that high end of the range or can that base is that and then kind of a similar question on the low end of that range.
Margaret I think we need some contribution from <unk> and based on their release.
And there.
Revenue haircut related to the 50 stores.
We don't need any incremental growth from greenbrier to get to either one of those figures.
So that should really be the growth from the other segments and would represent that 20% target.
Okay.
Sorry.
20% growth from the other.
I mean again, it's a wider range.
20% kind of the midpoint of the range.
Yes.
And then the two kind of high and low end.
Based on better grade better.
Better worse.
Am I understanding that right.
Yes, I think it represents the midpoint.
Okay, perfect and then.
I wanted to follow up on the strategy is because he spends a lot of time both at the beginning of the end kind of walking through that in 2022 and kind of the goals for 2023 Phds.
Is et cetera.
Is 2023, a year, where those efforts I guess can scale on a broader basis.
Yeah, where you can get maybe two or three act here in 20% of the base through though.
Is it just kind of more of a continuation with some solid growth.
And engagement.
Thanks for the question Margaret I think if we look at.
And as you.
We have seen.
The accounts that come through and as you adopt almost all of our programs.
Universal basis, and as a result their business has gone up.
I think that we our focus is to try and get more of our accounts through the Neurostar University program and I think that we have seen our number of accounts that are using the PHP 10, just in the fourth quarter went from a little over.
300 to 450.
It is gaining traction so I think 2023 is going to be a standout year for it and I think that we can anticipate some.
That is going to be what's going to help us drive the growth.
Okay.
Thank you guys.
Thank you. Our next question comes from Daniel <unk> with JMP Securities. Your line is open.
Yes, hi, thanks.
Back on the previous question surrounding that coverage policy updates.
You mentioned this creates a larger funnel of patience and brought into the market, but do you feel that the coverage criteria has been a gating factor for adoption in the past.
I think what slows down our implementation within a practice is getting physicians credentialed and onto the insurance programs.
So that's the number one factor number two is.
Getting.
The reimbursement actually paid and does the struggle that we have is that every single patient has to go through a prior authorization process with some of the payers it simple with other other payors.
Rejected out of hand, and then you have to do an appeal typically they approve the appeal if the patient has met all the criteria. So yes. It is.
It is a gating factor here, but quite honestly I think with the moves in Medicare and now United Health care, leading the way I think we're encouraged that that.
They are finally, recognizing that they need to make the access to care simpler.
Great and then just one follow up for me.
You've called out higher utilization your per click segment at the driver of treatment session revenues for a few quarters here I think double digit for last two quarters, but.
Some of your initiatives that are driving this but if you could point to one or two aspects that's really leading the charge here what would those be and then what could this look like in 2023. Thank you.
So I think.
Couple of points.
To drive that utilization number one is our practice development managers.
We have invested heavily into a team of people right now we have 47 of them.
Net.
Each account has assigned to one of our practice development managers in each one of those managers is responsible to generate.
Awareness education and help capture those patients.
Within the practice and educate their staff from the front desk to the treater on exactly how to do that education. So.
I think our.
Our practice development managers are the tip of the spear for us and they're the ones that are deploying the PHP tens in the practice who are doing the five stars to success, which is a pure education.
At various levels within the practice, including marketing.
So.
I think those are really our driving force we rely heavily on our practice development managers and now <unk>.
Aerostar University to help educate the accounts.
Great. Thanks, a lot.
Yes.
Thank you. Our next question is a follow up from Bill <unk> with Canaccord. Your line is open.
Great. Thanks.
Yes.
Just just to ask the question again on the Green Brook I mean, it's a.
Re read the announcement the.
Weather shutting down a lot of centers, they say that it's only a little over 10% of the revenues and if I do back of the napkin math.
Just based on some of the commentary it sounds like at the low end Youre looking for green broke down closer to 25% to 30%.
If youre assuming at the midpoint the rest of your business is growing 20%.
Is that the trends youre seeing in the business today at green brick or given the newness of the information.
You are kind of the low end of the guidance is almost assuming a worst case scenario just because you don't have a lot of information upon which to make that decision today.
So bill we monitor the utilization on all segments of our accounts every single week.
Green Brooks.
Utilization has has decreased over the past five months.
I think as we've said before and they have said I think it is.
<unk>.
That there would be some disruption, but we saw a significant.
Amount of decline in there and their growth in Q4.
And we were able to grow in spite of it I think that if we are able to deploy the <unk>.
Trainings and the education that we're doing with the rest of our accounts in the Green book, which.
I think bill is.
<unk> very very supportive of us working closer together to get that done I think we can help them get back on track.
But we did see the decline in in the third and the fourth quarter.
Okay and then.
Just clarity on the impact of the Mgs.
Starting on April 1st getting the nurse practitioners to order entry how important or significant is that.
It's a great question so.
We have been looking state by state payer by payer at the opportunity that's out there with nurse practitioners.
Some of the states have.
Say that nurse practitioners have full authority if they have been under the guidance of a psychiatrist for five years during the pandemic, Virginia as an example lowered the requirement under a psychiatrist.
To two years, but they have since reversed that and gone back to five so there are.
The areas of the country, where nurse practitioners are allowed to.
Diagnosed a patient to do the motor thresholds and to treat and we are beginning the process of identifying what what areas that is and then.
How we're going to educate those nurse practitioners.
The opportunity to help their patients.
Great. Thanks for taking my questions.
Thanks Bill.
Thank you there are no further questions at this time I'd like to turn the call back over to Keith Sullivan for closing remarks.
Thank you again for joining US today, we look forward to updating you on our next quarterly call. Thank you all.
Ladies and gentlemen, this does conclude the program you may now disconnect everyone have a great day.
The conference will begin shortly to raise and lower Johan during Q&A you can dial one one.
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Good day, and welcome to narrow networks fourth quarter and full year 2022 conference call. At this time all participants are in a listen only mode. After.
After the speaker's presentation, there will be a question and answer session and instructions will be given at that time.
As a reminder, this call is being recorded I would now like to turn the call over to Mark Klausner you may begin.
Good morning, and thank you for joining us for the neuro networks fourth quarter and full year 2022 conference call join.
Joining me on today's call are narrow networks, President and Chief Executive Officer, Keith Sullivan, and Chief Financial Officer, Steve Furlong.
Before we begin I would like to caution listeners that certain information discussed by management. During this conference call will include forward looking statements covered under the Safe Harbor provisions of the private Securities Litigation Reform Act of 1095, including statements related to our business strategy financial and revenue guidance the impact of Covid nine.
<unk> and other operational issues and metrics.
Actual results can differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business.
For a discussion of risks and uncertainties associated with <unk> business I encourage you to review the Companys filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K, which will be filed later today.
<unk> disclaims any obligation to update any forward looking statements made during the course of this call except as required by law.
During the call, we'll also discuss certain information on a non-GAAP basis, including EBITDA.
Management believes that non-GAAP financial information taken in conjunction with U S. GAAP financial measures provide useful information for both management and investors by excluding certain noncash and other expenses that are not indicative of trends in our operating results.
Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans.
Benchmark, our performance externally against competitors and for certain compensation decisions.
Reconciliations between us GAAP and non-GAAP results are presented in the tables accompanying our press release, which can be viewed on our website with.
With that it's my pleasure to turn the call over to neuro genetics, President and Chief Executive Officer, Keith Sullivan.
Thank you Mark.
Good morning, and thank you for joining us I'll begin by providing an overview of our recent performance followed by an operational update Steve will then review our financial results and I'll conclude with some thoughts on 2023 before turning to Q&A.
We are pleased with our performance throughout 2022, a year, which included several record quarters.
And the achievement of key milestones, we shipped over 210 systems to customers, bringing total system shift all time to over 2000 in.
In addition, our efforts to drive increased treatment session utilization has continued to pay off.
As of the end of the year the number of all time treatment sessions surpassed $5 3 million.
Across roughly 145000 patients.
This all contributed to the total revenue growth of 18% for 2022.
Proof that the investments made over the past two years in marketing practice development and patient education initiatives are working.
Proud of everything that we have accomplished in 2022.
Which we capped off by a strong fourth quarter and I'd like to thank our employees, who delivered this high level of success by way of their hard work throughout the year.
For the fourth quarter total revenue was $18 2 million up 21% over the fourth quarter of 2021.
This strong performance was primarily driven by record treatment session revenue as well as continued capital equipment sales growth.
As we have seen our programs and initiatives take root.
Neurostar system revenue was $4 6 million up 64% over the fourth quarter of 2021.
The success is due to the ongoing hard work of our strong team of area sales managers, who found their groove and nurturing and converting our robust pipeline.
Which was strengthened by yet another sold out Neurostar summit.
The U S treatment session revenue was an all time record of $12 5 million up 11% over the fourth quarter of 2021.
This record revenue was the result of positive growth at the local per click sites and was accomplished despite slower than anticipated growth at our largest service provider as they work their way through merger integration.
Our success was driven by our investments in five star's training program.
The expansion of our <unk> tool in a more offices and greater availability of practice management training.
Now turning to our operational highlights our first focus area is increasing customer and patient awareness.
We once again had a completely sold out Neurostar summit in Chicago attended by 50 participants from 38 different practices.
This event received outstanding feedback, which led to the conversion of several high quality customers and the growth of our pipeline.
The Neurostar summit's have proven to be the number one event for educating and partnering with new Tms practices.
Our area sales managers have done an excellent job, helping these potential customers see the benefits neurostar can bring to them and their patients.
The implementation of our proprietary PHP 10, digital assessment tool, which allows our neurostar practices to easily identify patients within their practice, who are candidates for and have expressed interest in our neurostar treatment has been extremely fruitful we collected now.
98000, THQ tends in 2022 and.
And we will continue to enhance this tool to include new features within track star to better manage and identify patients who are candidates for neurostar treatment.
Our Neurostar University in Charlotte North Carolina continues to receive excellent.
Reviews from our customers.
By year end, we had hosted eight full capacity classes with attendees representing 75 accounts.
And we now have a lengthy waiting list.
We continue to evolve the capabilities of the platform as well as the support services that we offer our customers. These classes, we will continue to be highly beneficial for both the new and existing users as we seek to leverage the power of Neurostar to help more patients suffering from mental disorders.
We have begun to see positive benefits.
Linked directly to the NFU training classes, such as the increase of 23% in treatment session utilization and an increase in THQ can utilization from these NFU attendees.
Our second focus area is the continued optimization of our commercial organization.
In the quarter, we started to see some benefit from the efficiencies gained from our newly implemented sales force reporting tool.
Which help our <unk> better understand our customers their patient base and utilization trends.
These tools allow the pbms to help our account set goals.
And measure their progress towards achieving that.
In particular, allowing accounts to more efficiently and more effectively identify and treat people in need.
From within their own existing patient base.
As planned we hired four additional Pds earlier this year due to the new account growth over the course of 2022.
These additions will support the growth of our installed base and ensure we provide our customers with the highest level of service and support.
Our third area of focus is leveraging exclusive commercial partnerships.
We recently announced an expanded commercial partnership with Greenberg, Pms, which runs through year end 2028.
Under the agreement, we will be the exclusive supplier of Tms equipment to Green Brook.
With all other Tms devices being replaced with neuro stars as their existing leases expire.
This expanded partnership will deliver several important synergies, including co branding and co marketing opportunities.
Enhanced patient and clinical awareness improved patient access to care and our collaboration on product development and publication.
Importantly, this agreement converts the entire green brick organization, including success Tms to our consumable pricing model and away from a fixed price one.
We will offer.
Our full spectrum of support and programs to Green Brook centers and practitioners in particular, we will offer tailor NFU classes and integrate our Phd tens and track star to help Green Brook reach and treat patients more effectively.
With the help of this agreement neuro <unk> and Green book will be able to make neurostar advanced therapy for mental health accessible to a growing number of people who are struggling with mental illness.
While we are enthusiastic about the long term partnership with Green Brook, and our ability to help them drive increased patient volume in their centers I did want to highlight that we have continued to see disruption, resulting from the merger of green broken success and the subsequent integration of.
The two businesses as Steve will mention later when he provides our guidance we expect some revenue headwinds in 2023 as they continue to work through combining their company.
Lastly, I want to provide an update with our clinical and regulatory progress.
January we announced a peer reviewed publication, which shows Neurostar Tms as an effective non drug treatment for depression with co morbid anxiety.
Significant anxiety symptoms are present in the vast majority of depressed individuals and the majority of patients with anxiety disorders also have associated depression.
We were able to study actual results and establish the effectiveness of this crucial therapy option for patients with anxious depression.
Thanks to the strength of texstar, and the largest clinical dataset for Tms in depression.
Now for a quick update on the expanded Medicare coverage.
In February and GFS updated their healthcare policy, allowing nurse practitioners and physician assistants, who are within their scope of practice to order and provide tms treatment to their patients with major depressive disorder.
This is a welcome change as we have always recognized the importance of psychiatric nurse practitioners in delivering mental health care.
This is especially true now given the shortage of healthcare professionals.
In addition, Unitedhealthcare recently announced a positive coverage change, which expands access to Neurostar therapy Optum.
Haverhill health benefit manager for United reduce the number of prior medications failures for Tms eligibility from four down to two.
And remove the requirement for a trial of evidence based psychotherapy.
As the largest healthcare insurer in the country covering $23 8 million lives United Healthcare's optimal decision to make neurostar more easily accessible and make a real difference in helping to alleviate the burden of drug resistant depression.
To continue to provide greater access to Neurostar therapy, we recently expanded our reimbursement team.
This larger team will be able to increase our advocacy effort related to favorable health policies and provide our customers with best in class reimbursement and billing support.
In closing I'd like to express my gratitude to our team for their dedication and perseverance and navigating the challenges of the current operating environment with these.
This hard work has enabled us to successfully execute on all initiatives during the year and bring relief to patients suffering from depression.
Looking ahead to 2023, we anticipate that the momentum we have built will continue to grow as we build on the solid foundation, we have laid throughout 2022.
With that I'd like to turn the call over to Steve.
Thank you Keith total revenue for the fourth quarter was $18 2 million, an increase of 21% over fourth quarter 2021 revenue of $15 million.
U S. Neurostar advanced therapy system revenue was $4 6 million.
Compared to the prior year revenue of $2 $8 million it was up 64%.
The company shipped 58 systems in Q4 up from 48 systems shipped in the fourth quarter of 2021.
U S treatment session revenue was $12 $5 million.
An increase of 11% over fourth quarter 2021 revenue of $11 2 million.
The revenue growth was primarily driven by an increase in utilization in particular, among our local per click customer segment.
In the fourth quarter of 2022 revenue per active site was approximately $11500 compared to approximately $12200 in the prior year quarter.
Excluding green brick and success revenue per active site was consistent year over year. Despite having added approximately 100, new active sites during the year.
Gross margins were 76%.
Consistent with the fourth quarter of 2021.
Operating expenses during the quarter were $21 5 million.
An increase of $3 1 million compared to the fourth quarter of 2021.
The increase was primarily driven by our expanded sales force the opening of Ns's view.
Here, the unexpected sales commissions incremental head count and product development investments in clinical as well as increased cost from inflationary pressures.
During the quarter, we incurred approximately $2 1 million of noncash stock based compensation expense.
Net loss for the fourth quarter of 2022 was $8 3 million or <unk> 31 per share.
As compared to a net loss of $7 6 million or 29 per share during the fourth quarter of 2021.
EBITDA for the fourth quarter of 2022 was negative $6 $5 million.
As compared to negative $6 $3 million for the fourth quarter of 2021.
As of December 31, 2022, cash and cash equivalents were $73 million.
We continue to work with our lender SLR capital partners on an updated credit facility. We are on track to close on this new facility in March 2023.
Now turning to guidance for the full year 2023, we expect revenue in the range of $66 million to $72 million.
As Keith mentioned, our guidance for 2023 assumes lower treatment session revenue from certain service providers.
But continued strength from our local per click customers.
For the first quarter of 2023, we expect revenue of 15 million to $16 million.
We expect total operating expenses for the full year 2023 to be in the range of $84 million to $88 million.
For the full year, we expect cash utilization from operations to decrease year over year.
Cash utilization will be the highest during the first quarter as it includes our national sales meeting as well as prior year bonus payments sales commissions and retention costs.
Our operating plan continues to show that we will achieve cash flow breakeven with cash on hand.
Our path to profitability, it's still on track thanks to our projections for topline growth.
The gross margin profile and the careful management of our operating expenses.
I would now like to turn the call back over to Keith.
Thank you Steve 2022 was a critical year for neuro networks as we continue to drive the accelerated adoption of Neurostar.
We have shown that the clinical results are superior.
We've made significant investments in building the latest and most talented commercial team in the business.
We have demonstrated unmatched ability to support our practices by assisting them with patient education and awareness campaigns to promote long term success.
To continue that success, we will focus on a number of key initiatives during 2023.
One increasing the number of customers who participate in Neurostar University.
Two working to incorporate a high percentage of customers into co op marketing.
Three creating a network of accounts across the country that follow Neurostar best practices.
Beginning with increased customer participation in Neurostar University.
As the initial cohort of customers has gone through training and Su, we have clearly seen the immediate positive benefits at these accounts, including better Phd Pan uptake and increased treatment session utilization.
Because of this we are working to increase the number of existing and prospective customers attending NFU classes.
Which provide important education to the providers to allow them to deliver better patient outcome.
The classes are crucial as we continue to develop neurostar capabilities and features such as our expansion into OCD as well as the introduction of <unk> and the A&P cap.
Going forward, we are offering up to two classes per month throughout the year and incorporating attendance costs into our co op marketing program.
Our second focus for 2023 is to incorporate a higher percentage of our customers into our co op marketing program.
There are over 60 customers, who are currently utilizing the benefits of our co op marketing program on a regular basis.
Co op marketing program is one of our Chi in the Tms industry. It provides us with an incremental opportunity to partner with our customers to help support their business and provide patients with access to care through increased awareness with co branded localized marketing campaign.
<unk>.
Customers, who have participated in co op marketing program has seen an average increase of four patients per quarter.
We will continue to emphasize the expansion of customer participation throughout the year to bring the benefits of the program to more customers and their patients.
Turning to our third and final focus for 2023.
Creating a network of accounts across the country that following Neurostar best practices.
Over the past few years, our company has made significant investment in the organization and the development of best practices for each customer to market effectively and drive long term growth.
We would like to take certain aspects of these proven practices to a broader network of our accounts.
As we look ahead to 2023, we want to set certain standards across the accounts, we serve such as offering consistently high levels of service and increasing patient marketing within their offices.
We.
Spec to see these standards in customers, who fully utilize the uniqueness of the neurostar offering and our approach to the market.
We will continue to follow our plan in 2023, we.
We have done tremendous work over the last two years to set ourselves up for success.
And we have the strategy in place to drive the accelerated adoption of Neurostar and bring relief to more patients suffering from mental health disorders.
With that I'd like to open the line for questions if you'd like to ask a question. Please press star one one if your question has been answered and you'd like to remove yourself from the queue. Please press star one again, one moment, while we compile the Q&A roster.
Our first question.
It comes from Bill <unk> with Canaccord. Your line is open.
Hey, great. Thanks, good morning.
So obviously I think the biggest question is on guidance and.
Green brick one what do you contemplate at the low end and high end in term.
How does that reflected with Green Brook kind of what percentage of your revenues are they today and what do you expect out of that versus kind of the rest of your business.
Okay.
Hey, Bill this is Steve obviously with the press release yesterday, and we did have to scramble and adjust guidance at this point.
We know they do anticipate closing 50 stores with.
With a 10% impact on revenue.
We don't know the mix, we don't know which stores in Aerostar, we don't know which percentage of revenue is <unk>.
Oh versus Tms.
So we took the approach really based on their contributions.
In 2022 versus our expectations in 2023 for growth.
I think we're in a wait and see mode. At this point. So you saw in our K that you have.
Haven't seen in our K, yet, but you will there.
They're a little bit north of 20% of our business. So we believe the 66% to 72 million.
Ranges is appropriate at this time and you can also see we did expand the range in revenue from our typical $4 million for the year to fix it.
Again, we just need to see how this plays out through the month of March and into the early part of Q2.
Green broken out since the end of March and maybe there'll be some more clarity.
And to their plans and how it impacts us.
Well, Steve asked another way what do you expect your core business in 2023.
You've historically, if I look back <unk> grew 18% and 22, 12% in 'twenty, one and even to go out of the growth as we exited 22 was out of the non green brick businesses. So.
Given that's 80% of your business kind of what it was the contemplation of gross out of that core business as you think about 2023.
Yes, I think it will be consistent with what we saw in the second half of 2022, so in that 20% range.
Again, if you look at our Q4 number 21% over prior year.
That was negatively impacted by green brick and successes performance. So.
The park Cliff consumable segment and some of the other segments are performing quite well. So again I think it'll be in that 20% range.
And then last on this guidance question and then I'll jump back in is just how do we how do we think about kind of the capital versus disposable, especially getting our hands around like the assumption is probably given their shutdown 50 centers they can move.
Capital around how do we think about capital in 2023 versus disposable thanks for taking my questions.
Sure Bill, Yes capital is going to be consistent with 2022. So we've communicated between $45 million 50 systems, a year, we get slightly more than that last year, and we anticipate that consistent level in 2023, so there won't be an impact from the grain.
Integration efforts.
We also expect international revenues to be flat. So all of the growth in 'twenty three will be related to treatment sessions.
I mean 45 to 50 systems a quarter not for the full yet correct.
Yes. Thanks.
Thank you. Our next question comes from Adam <unk> with Piper Sandler Your line is open.
Hey, Keith Hi, Steve Thanks.
Thanks for taking the questions here.
Wanted to follow up a little bit on the guidance.
Then a question I guess I'll ask you about kind of.
Cadence.
You, obviously gave Q1 guidance maybe.
I hear lighter than expected but.
Just kind of help us think through kind of how you see.
Your business kind of progressing over the year.
Maybe ill start there and then I have a follow up thanks.
Thanks, Adam Yeah, if you look at our historical performance and I go back to 2018 so.
Year prior to IPO.
Revenue cadence by quarter.
Is Q1 is 21% to 22% of annual revenue.
Q2 was about 24% to 25%.
Q3, 25% to 26, and then Q4 is always our strongest quarter at 28% to 29%.
And so Q1, we always have the reset of deductibles.
Patients have to go through and get their benefits investigations redone.
And so the internal teams here.
And processing about 400, or so a week and Thats continued into early March so that's really the biggest pressure on.
Q1.
Again, it's very typical for the past five years.
Okay I appreciate that color, Steve and I guess, just one more on the guidance on I had a follow up but just kind of obviously a lot of focus on the Green Brook.
Announcement yesterday and kind of how that impacts you guys.
If we just kind of look back.
More broadly.
It sounds like you are very confident in the business ex Green Brock.
So I guess one question I have just on the macro is.
How are you thinking about this year 2023.
Sure.
And a potential recessionary environment is anything factored into the guidance. There are you, allowing for some additional conservatism just kind of maybe walk through the philosophy on that.
Look.
Yeah, I mean, there is there are no recessionary impacts in our guidance.
I'm sure you remember Adam at your conference in New York that I communicated where we're comfortable with where the consensus was for the year and that was in that $73 million range.
We're also anticipating.
Mid to high teen growth year over year.
Again, the Greenberg press released yesterday.
Was a little bit surprising and so.
I think we need just some time to work through the impact.
Otherwise you saw our performance in Q3 and Q4.
Even with I would say.
No to slow growth.
From them, we were still at that 20% level.
And I think we're confident that we will be able to maintain that in the other segments.
Okay.
From a marketing standpoint, we have been working closely over the past couple of months with the green brick team.
Putting together a plan on how they would attend NFU, how they would market within their practices how.
How we would help them get THQ cans and so there was some hints of the closing of the stores, but I believe that.
We have put together a solid plan with bill and his team to.
See if we can take the remaining stores and get them back up to their prior service levels.
Okay I appreciate the color guys and then one last one if I may just on some of the.
Your changes.
Medicare coverage in the United News from from this week.
Streamlining therapy.
Maybe just kind of how do you think about the impact from from those.
<unk> is there something that can impact the business near term or.
Do you think we need several quarters to kind of.
See any tailwind ultimately materialize, thanks again for taking the questions.
So Adam on the reimbursement side, I think with Unitedhealthcare dropping from 4% to it is a it is a great sign many of the other payers follow what United Healthcare does.
As recently as last fall Aetna went from two to four because thats, where United healthcare was so.
We are hoping that the other payers dropped their requirements to and follow United Healthcare's lead.
Quite honestly there are plenty of patients out there that have failed for drugs. So we're not in there is there is no shortage. It does expand the market when we do.
Drop it down to two and I think our hope now is that United and the other payers make it easier to go through the prior authorization process. So it does expand our market. It does help our our patients now we need to help our accounts with.
With simplifying prior authorization. Thank you. Our next question comes from Margaret Kayser with William Blair. Your line is open.
Hey, good morning, Thanks for taking the question.
Hey, Martin, China, and with all my colleagues on the on the guidance side, so apologies for that but I guess one more.
It's kind of a simple one I guess, what gets you to the high and the low end of the range because it's obviously quite broad so and.
And more specifically I guess, the need green brick to improve to get to that high end of the range or can the base is that and then kind of a similar question on the low end of that range.
Yes.
No I don't Margaret I think we need some contribution from Green Brook and based on their release.
And there.
Revenue haircut related to the 50 stores.
We don't need any incremental growth from greenbrier to get to either one of those figures.
So that should really be the growth from the other segments and would represent that 20% target.
Okay.
Sorry, yes, the 20% growth from the other.
I mean again, it's a wider range of 20% kind of the midpoint of the range.
And then the two kind of high and low end.
Based on better and.
Better worse.
Am I understanding that right.
Yes, I think it represents the midpoint.
Okay, perfect and then.
I wanted to follow up on the strategies because he spends a lot of time both at the beginning of the end kind of walking through that in 2022 and kind of the goals for 2023 Phds.
It is et cetera.
Is 2023, a year, where those efforts I guess can scale on a broader basis.
Yes, where you can get maybe two or three act here in 20% of the base through though.
Or is it just kind of more of a continuation with solid growth.
<unk>.
Thanks for the question Margaret I think if we look at the.
And as you we have seen.
The accounts that come through and as you adopt almost all of our programs.
Universal basis, and as a result their business has gone up so I think that we our focus is to try and get more of our accounts through the Neurostar University program.
And I think that we have seen our number of accounts that are using the PHP 10, just in the fourth quarter went from a little over 300 to 450. So it's it is gaining traction. So I think 2023 is going to be a standout year for it and I think that we can.
Anticipate some debt.
That is going to be what's going to help us drive the growth.
Okay. Thank.
Thank you guys.
Thank you. Our next question comes from Daniel <unk> with JMP Securities. Your line is open.
Yes, hi, thanks.
Back on the previous question surrounding that coverage policy updates.
You mentioned this creates a larger funnel of patience and brought into the market, but do you feel that the coverage criteria has been a gating factor for adoption in the past.
I think what slows down our implementation within a practice is getting physicians credentialed and onto the insurance programs.
So that's the number one factor number two is.
Getting.
The reimbursement actually paid and the struggle that we have is that every single patient has to go through a prior authorization process with some of the payers it simple with other other payors.
Rejected out of hand, and then you have to do.
Do an appeal typically they approve the appeal if the patient has met all the criteria. So yes.
It is a gating factor here, but quite honestly I think with the moves in Medicare and now United Health care, leading the way I think we're encouraged that that day.
They are finally, recognizing that they need to make the access to care simpler.
Great and then just one follow up for me.
Called out higher utilization your per click segment at the driver of treatment session revenues for a few quarters here.
Digit for last two quarters, but.
You highlighted some of your initiatives that are driving this but if you could point to one or two aspects that's really leading the charge here what would those be and then no.
What could this look like in 2023. Thank you.
So I think a couple.
Couple of points.
Drive that utilization number one is our practice development managers.
We have invested heavily into a team of people right now we have 47 of them.
That are each account is assigned to one of our practice development managers in each one of those managers is responsible to generate.
Awareness education and help capture those patients.
Within the practice and educate their staff from the front desk to the treater on exactly how to do that education. So.
I think our.
Our practice development managers are the tip of the spear for us and they're the ones that are deploying the PHP tens in the practice who are doing the five stars to success, which is a pure education.
At various levels within the practice, including marketing.
So.
I think those are really our driving force we rely heavily on our practice development managers and now <unk>.
Aerostar University to help educate the accounts.
Great. Thanks, a lot.
Thank you. Our next question is a follow up from Bill <unk> with Canaccord. Your line is open.
Yes.
Great. Thanks.
Yes.
Just just to ask the question again on the Green Brook.
Re read the announcements.
Weather shutting down a lot of centers, they say that it's only a little over 10% of the revenues and if I do back of the napkin math.
Just based on some of the commentary it sounds like at the low end Youre looking for green broke down closer to 25% to 30%.
If youre assuming at the midpoint the rest of your business is growing 20%.
Is that the trends youre seeing in the business today at green brick or given the newness of the information.
Youre kind of at the low end of the guidance is almost assuming a worst case scenario just because you don't have a lot of information upon which to make that decision today.
So bill we monitor the utilization on all segments of our accounts every single week.
Green Brooks.
Utilization has has decreased over the past five months.
I think as we've said before and they have said I think it is expected.
There would be some disruption, but we saw a significant.
Amount of decline in there and their growth in Q4.
And we were able to grow in spite of it I think that if we are able to deploy the <unk>.
Trainings and the education that we're doing with the rest of our accounts in the Green book, which.
I think bill is.
Is very very supportive of us working closer together to get that done I think we can help them get back on track.
But we did see the decline in in the third and the fourth quarter.
Okay and then.
Just clarity on the impact of the Mgs.
Starting on April 1st getting the nurse practitioners to order entry.
How important or significant is that.
It's a great question. So we have been looking state by state payer by payer at the opportunity that's out there with nurse practitioners.
Some of the states have.
Say that nurse practitioners have full authority if they have been under the guidance of a psychiatrist for five years during the pandemic, Virginia as an example lowered the requirement under a psychiatrist.
To two years, but they have since reversed that and gone back to five so there are.
Areas of the country, where nurse practitioners are allowed to.
To diagnose the patient to do the motor thresholds and to treat and we are beginning the process of identifying what what areas that is and then how we're going to educate those nurse practitioners.
The opportunity to help their patients.
Great. Thanks for taking my questions.
Thanks Bill.
Thank you there are no further questions at this time I'd like to turn the call back over to Keith Sullivan for closing remarks.
Thank you again for joining US today, we look forward to updating you on our next quarterly call. Thank you all.
Ladies and gentlemen, this does conclude the program you may now disconnect everyone have a great day.