Q4 2022 RVL Pharmaceuticals PLC Earnings Call
This press release and a webcast of this call can be accessed through the investors section of the RVO website at RV Alpharma Dot com.
Before we get started I would like to remind everyone that any statements made on today's conference call that express a belief expectation projection forecast anticipation or intent regarding future events and the company's future performance may be considered forward looking statements as defined by the private Securities Litigation Reform Act.
These forward looking statements are based on information available to <unk> management as of today.
Patient or intent regarding future events and the company's future performance may be considered forward looking statements as defined by the private Securities Litigation Reform Act.
<unk> risks and uncertainties.
Including those noted in this morning's press release and the company's filings with the Securities and Exchange Commission such.
These forward looking statements are based on information available to Argos management as of today and involves risks and uncertainties, including those noted in this morning's press release and the company's filings with the Securities and Exchange Commission.
Such forward looking statements are not guarantees of future performance actual results may differ materially from those projected in the forward looking statements.
<unk>, specifically disclaims any intent or obligation to update these forward looking statements, except as required by law during.
Such forward looking statements are not guarantees of future performance actual results may differ materially from those projected in the forward looking statements.
During this call we refer to non-GAAP financial measures such as adjusted EBITDA for a reconciliation of adjusted EBITDA to net income or loss from continuing operations. Please see the tables at the end of today's press release.
<unk>.
Specifically disclaims any intent or obligation to update these forward looking statements, except as required by law.
The archived webcast of this call will be available for one year on Rvs Web site RV, Oklahoma Dot com for the benefit of those who maybe listening to the replay or archived webcast. This call was held and recorded on Monday March 20th 2023.
During this call we refer to non-GAAP financial measures such as adjusted EBITDA for a reconciliation of adjusted EBITDA to net income or loss from continuing operations. Please see the tables at the end of today's press release.
The archived webcast of this call will be available for one year on the Rvs web site RV Alpharma Dot com.
Since then RVO may have made announcements related to the topics discussed. So please reference the company's most recent press releases and SEC filings and with that I'll turn the call over to <unk> CEO , Brian <unk>.
The benefit of those who may be listening to the replay or archived webcast. This call was salary recorded on Monday March 22023.
Since then <unk> may have made announcements related to the topics discussed. So please reference the companys. Most recent press releases and SEC filings and with that I'll turn the call over to <unk> CEO , Brian <unk>.
Thank you Lisa and thank you everyone for joining our call. This morning.
Last year was a transformational year for RV all pharmaceuticals.
We launched into medical aesthetics, and clearly created a new category and ocular aesthetics, a round up need for the treatment of bloodworth ptosis or droopy eyelid.
Thank you Lisa and thank you everyone for joining our call. This morning.
Last year was a transformational year for Rvs pharmaceuticals.
We also opened two new commercial channels or customer segments more specifically, we launched direct to practice sales in medical aesthetics and two quarters later, we entered into two telemedicine partnerships.
We launched into medical aesthetics, and clearly created a new category and ocular aesthetics, a round up need for the treatment of bloodworth ptosis or droopy eyelid.
We also opened two new commercial channels for customer segments more.
We also wound down personal selling in eye care and I am pleased to share that our sales in that channel remained stable with a high percentage of refill supporting underlying demand in fact, we will still consistently see adding more than 100, new up Nique eye care prescribers each.
More specifically, we launched director practice sales in medical aesthetics, and two quarters later, we entered into two telemedicine partnerships.
We also wound down personal selling in eye care and I am pleased to share that our sales in that channel remained stable with a high percentage of refills supporting underlying demand in fact, we will still consistently see adding more than 100, new uplink eyecare prescribers each.
Week.
Clearly at some point in the future, we will revisit the potential in the eye care segment.
We have barely scratched the surface with the Meek and later in this call J D will give more color around our early growth and will provide a view as to the untapped potential of this brand.
Week.
Clearly at some point in the future, we will revisit the potential in the eye care segment.
But what I'd like to highlight very briefly is that fourth quarter aesthetics sales were comprised approximately a 50% reorder customers, which gives us clear signals into the traction within our accounts and it's very exciting.
We have barely scratched the surface with the leak and later in this call J D will give more color around our early growth and will provide a view as to the untapped potential of this brand.
But what I'd like to highlight very briefly is that fourth quarter aesthetics sales were comprised approximately a 50% reorder customers, which gives us clear signals into the traction within our accounts and it's very exciting.
<unk> is uniquely positioned as a first in class cash pay products with no competition.
Our model is designed to optimize patient and provider access across multiple channels.
There is Fedex and now telemedicine, which we believe caters to a segment of the population that is reluctant to visit a clinician as we look ahead, we are heavily focused on to near term imperatives.
<unk> is uniquely positioned as a first in class cash pay products with no competition.
Our model is designed to optimize patient and provider access across multiple channels.
There is Fedex and now telemedicine, which we believe caters to a segment of the population that is reluctant to visit a clinician.
First the rollout of elevate our next generation E Commerce portal, where we will be introducing subscription options across our aesthetics and eye care segments.
As we look ahead, we are heavily focused on to near term imperatives.
And secondly business development.
First the rollout of elevate our next generation E Commerce portal, where we will be introducing.
We have been able to attract an outstanding sales and leadership team.
Sponsor for growing up.
By firm unconditional orders and have all been received by the end customer.
With that I'd like to now turn the call over to Mike for a further review of our fourth quarter financials.
Thank you Bryan and Hello, everyone I'll begin by sharing comments on our results specific to the fourth quarter of 2020 to.
A reminder, that our quarterly and annual information and highlights can be found in today's earnings press release, we expect to file our annual report on Form 10-K later in the day.
Net product sales relating entirely to up Meek increased by $6 7 million to $9 $8 million in Q4 from an increase in sales volume, reflecting expanded commercialization through the year.
Total cost of goods sold for Q4 increased by $1 5 million to $2 $6 million.
This increase was primarily driven by higher product costs due to volume growth.
Our gross profit percentage from product sales was 75% in Q4 as compared to 58% in the prior year quarter, reflecting improved overhead absorption driven by higher volumes and for more favorable average selling prices.
SG&A expenses for Q4 decreased by $6 1 million to $17 $6 million.
The decrease in SG&A was primarily driven by.
By a $3 $3 million decrease from debt and equity issuance fees unique to the 2021 period.
A $2 $4 million decrease from foreign currency translation also unique to the 2021 period.
And from $1 $4 million and lower legal and other professional fees.
R&D expenses for Q4 decreased by zero point $2 million to zero point $9 million, reflecting slightly lower year over year spending in support of medical grants.
Unique to Q4 and classified among total operating expenditures, we booked $13 $3 million noncash impairment charge.
The write down was against our IP R&D for our baclofen and asset that treats the alleviation of spasticity in multiple sclerosis patients.
The current quarter charge was triggered by an accounting revaluation. After we received a potentially adverse response from the FDA in Q4.
Notably in Q4, we again demonstrated our commitment to rationalize total operating expenditures and to keep spend in check.
After adjusting for nonrecurring or exceptional items, such as the impairment I am.
I'm pleased to share that Q4, Opex spend was once again below the $7 million average monthly ceiling that we have so often referred to.
Moving below operating income total other non operating activities in Q4, 2022 contributed $5 $9 million of income as compared to income of $3 3 million in the 2021 period.
The year over year change is largely influenced by changes in the fair value of the companys debt and warrant liability, which have been re measured through our earnings since October 2021.
Our adjusted EBITDA loss for Q4 was $9 $3 million, nearly 40% lower than the comparable EBITDA loss of $15 $2 million in the prior year quarter.
Next turning to our balance sheet and liquidity.
At December 31, we held cash of $45 million.
While total debt and financing obligations at year end had aggregate principal amounts to a <unk> 75 billion.
Subsequent to year end, there are a few developments to share regarding our liquidity.
In February we received $5 million in cash from our Lora related to a contingent milestone payment.
In March we subsequently paid the $5 million to our lenders and satisfaction of mandatory repayment conditions under our debt.
The repayment reduced the outstanding principal of our notes by $4 $3 million.
On March eight we entered into a second amendment of our debt solely to secure the immediate reduction of the minimum liquidity requirement from $15 million previously to $12 5 billion going forward.
Lastly between January and March the company received an aggregate of $4 1 million in federal tax refunds relating to income taxes paid in prior periods.
The company is continuing to pursue the collection of $1 $8 million of residual federal refund claims.
As mentioned previously there continues to be many variables in play that will likely influence our cash runway through 2023.
Our near term commercial development in particular in the midst of changing and increasingly challenging macroeconomic conditions will play a very important factor.
With that I'll turn the call over to J D for some added color.
Thanks, Mike and good morning, everyone.
As you heard from Brian we made tremendous progress in 2022 across our business.
Most importantly, with the growth of up Nik.
We are incredibly proud of the results and collective achievements and we'd be remiss to not acknowledge and thank the entire <unk> team for their contributions.
This past year was a critical step in our evolution as an organization.
Specifically the continued expansion of our market building efforts with up Meek.
All told the approximately 11 months within <unk> sales team in place delivered the most robust medical aesthetic product launch and recent history, when measuring new location openings.
Not only did the team introduce up needs to over 4300 locations, but we were able to solidify and expand our talented sales organization because of growing provider and patient enthusiasm for up Meek.
Another important component to our success was delivering this year over year growth, while decreasing Opex, a testament to the discipline and operating leverage we can create with this brand.
Turning now to some comments regarding Q4 momentum and general expectations ahead in 2023.
The eye care segment continued to be a stable contributor in Q4, despite being the first quarter with no personal promotion.
We continue to see a growing paid prescriber base <unk>.
<unk> thousand 414 as of year end, an increase of 1467 or 9% over Q3.
A steady flow of new prescriptions, and an ever expanding base of refills.
These factors along with growing awareness are expected to drive continued growth in 2023.
Overall, we expect <unk> to be about 20% to 30% of revenue largely dependent upon the ultimate growth from the aesthetic channel.
Now some updates on our medical aesthetic launch as mentioned upfront 2022 represented the establishment of our aesthetic business and the introduction of up to a large and diverse new group of providers.
What began as about 50 reps and a 1000 new locations in Q1 of 'twenty two.
<unk> into a stronger and more talented footprint of between $65 70, and over 4300 locations with up Nique by year end.
We are extremely proud of the leadership and execution across this team.
Throughout the year. This segment of our business has continued to grow quarter over quarter, and importantly, though not the focus the composition of revenue from quarter to quarter was increasingly from reordering accounts.
<unk> in Q4 aesthetic revenue contribution comprised of about 50% new 50% reorder.
As we move further into 2023, our strategic priorities are anchored in growth from this channel specifically our sales effort is going to be more heavily focused on supporting the existing practices around integration and ultimately realizing the true potential of up meek and each practice.
Having established a meaningful breadth of ordering locations. We believe this will be the greatest return on the team's time and effort.
Conservatively, our data and market research continue to suggest a low end of 10% to 20% of patients within these practices as potential patients.
If you assume approximately 2000 unique patients within the average practice.
Somewhere between two to 400 patient starts per practice when providers are integrating <unk> into their treatment protocols and patient assessment.
Lastly, we are seeing and continue to expect new accounts to contribute as a function of growing awareness and desire to carry the product, though to a lesser extent than the more than 4000, new openings from last year.
More recently, we strategically layered in a third channel of our business, which we call telemedicine.
During the latter part of this past year and early part of Q1, we have partnered with two national providers of telemedicine to position the brand for broader access to a segment of patients who do not rely on traditional eyecare <unk> aesthetic providers for treatments. Additionally.
Additionally, these channels serve to further enhance consumer awareness and education, which in turn supports our efforts of establishing this new market.
Importantly, we view this channel, it's synergistic both retail pricing and patient base do not compete with our ongoing efforts within the practice and subsequently requires minimal investment from our P&L.
The early quarters involve ramp up and optimization on the part of our partners and we expect this segment to contribute more consistently as the year progresses.
Lastly, we do not anticipate expanding this effort through additional partners and feel confident we have the existing capabilities to deliver <unk> via telemedicine with our current consortium.
Beyond the segments that comprise our growth in revenue we continue to believe in the Underpenetrated, yet outsized commercial opportunity for <unk>. Just recently, we updated our consumer research study of awareness among adult women of up Meek.
This nationally projectile group of 1500 adult women only 4% had at least some knowledge of the brand, 1% very aware and 3% a little aware.
When coupled with the broad points of access established and a growing real world repository of positive patient feedback and provider buying.
We remain excited by what's in front of us and confident in our ability to continue to build.
Lastly, we believe the strength of our business and unique model leaves us well positioned to capitalize on strategic opportunities to further scale through business development.
We look forward to updating our progress throughout the year and continuing to deliver on our mission to establish <unk> as a meaningful brand in the U S and with that I'd like to turn the call back to Brian for any closing remarks.
Thanks, J J and thanks, everyone for listening to our prepared remarks today.
As you can tell we are really excited about our progress with uptake and with that what I'd like to do is ask the operator to open up the lines for questions. So operator.
I'll turn it to you.
Thank you at this time, if you would like to ask a question. Please press star one on your Touchtone phone.
You may remove yourself from the queue at any time by pressing star one.
Once again that is star one to ask a question.
We will pause for a moment to allow questions to queue.
We will take our first question from Louise Chen with Cantor.
Hi, congratulations on all the progress this quarter and thanks for taking my question. So I had a few questions first one I wanted to ask you how do we think about revenue in 2023, maybe in the.
Quarterly progression.
Little bit color for the first quarter.
<unk> accounting methodology for that and then second thing is that.
Following on that how do we think about opex.
The fourth quarter of 2020.
When proxies are building upon hold off.
And then last question I have for you is just kind of an impact to the economy.
That's a business that implies some concept being used out there.
Okay.
Thank you.
Yes, Thanks, Louise and good morning to you and the team.
Starting with the economy, I think bridging from J D 's last comments.
Our view is that with.
Fairly.
Underpenetrated across the board it is Fedex and even I care.
So while the economy is certainly.
Headline news.
We believe that.
We're not seeing a material impact in two new and as a category.
So it's hard for us to really judge based on what we're hearing from others as well so we're putting our head down and basically just continuing to grow the brand.
So I'm not really that focused on the economy with respect to our penetration into aesthetic accounts.
As far as revenue builds for the year.
Couple of things of importance in the first quarter, we're spending a lot of time working with the accounts that have previously ordered getting them to work through the product make it become a <unk>.
Everyday part of their practice.
And as J P mentioned seeing nearly.
50% Reorders in Q4.
It gives us a really strong signal that traction is gaining here, but I think the way our revenue shapes up for this year as we see it more ramping almost a reflection of how it looked last year because right now we're following the playbook, where we're focused on the reorder customer.
To make sure we have some traction and we're seeing it but.
The other thing I want to point out and it's really important.
Is you can't look at this product like a toxin or affiliate you cant compare us to those markets because we don't need to pay for market share we're not competing against anyone we're basically competing for.
A slice of the total market not just a piece of a market. So while the toxin and filler market certainly claim a lot of headlines we're going at our own pace, which brings me to opex.
I think Q4 is fairly reasonable reasonable way to look at our opex for the year.
We're going to be very disciplined in how we spend money and we're looking to create leverage within the P&L right now because we're one of the only and have no competition.
And we will take our next question.
With HC Wainwright.
Hi, Good morning, just curious if you can help us maybe understand.
Little bit.
The context of the shift in revenue from the fourth quarter and the one.
<unk> 23, how we should look at that in terms of the growth trajectory because obviously now when we look at the performance in <unk> versus <unk>.
We saw sort of basically flat revenues. So just trying to understand how we should think about that thank you.
Yes, and I think I think that's a fair question, Doug and good morning.
The way the way we're looking at it is the change in our accounting or a revenue methodology.
As you know as I said in the prepared remarks, it's based on firm unconditional orders. So it's real sales.
And again it will be following up with everyone. After the call.
To help in the refinement of modeling conversations but.
I think it's.
Fair to say that we will ramp in a similar manner to last year because right now in this quarter.
We're heavily focused.
On the reorder customer and making sure that we get traction because we don't want to end up sort of six months down the road from now and many people haven't really worked it into their practice. So that that's really important for us and I think.
J D. If you wouldn't mind add a little more color if you could.
Yeah.
Good morning, Doug.
I don't think the.
<unk> and revenue recognition is something that we view impacting revenue growth and opportunity.
The way I would look at kind of Q4 to Q1, given some of this shift is probably.
Obviously, we now expect a little bit better.
Revenue performance in Q1 than we otherwise would have.
Traditionally there is a bit of a drop off from Q4 to Q1.
We would expect it to be.
Significantly less.
With our business because of the revenue change and then importantly.
We look at the business.
The Red the makeup of the revenue is a keen area of focus for us in other words.
Nicky mix of revenue.
And one of the things we pay closer attention to in terms of the health and forward looking opportunity and I think that's where.
This business is going to continue to drive as we move through the.
The rest of this year, we could definitely go out and continue to meaningfully expand points of sale, but as the new category. Despite receptivity. We know that's not going to be something that becomes sustainable we've got to help these practices.
The product and integrated in a way that fits within each practice and thats going to be the focus and how we drive this business moving forward.
And but I guess the question I think I've gotten and trying to understand is how should we think about that performance and measure progress from Q3 to Q4 and.
In the context of the sort of shift because obviously before it was easy we could say, okay revenues were up 20% sequentially. The question I've got now is.
You know revenues look flat, so we get the <unk>, but how do we feel confident about the overall trajectory in the context of what on the surface looks like flattening. Thank you.
Yeah, Doug I get it and on the surface with the change.
And how we recorded revenue, yes, it would look flat.
But those orders were in the fourth quarter those sales occurred in.
The fourth quarter and now they're being simply recorded.
In Q1.
And again, we'll be.
More forthcoming later on the revenue trajectory, but the other.
Thing to keep in mind is we're in a number of important business development conversations.
And any one of those are likely to have an impact on the near term future. So we don't want to get over our skis.
We like what we're seeing we're going to be.
Out later on with more information to help in the modeling, but again as I mentioned to Louise I think our revenue trajectory.
We will look similar to how it did last year.
And growth, but again in the first quarter, we're going to be careful because we are driving that reorder business and we want to be mindful of that because we.
We're not spending nearly as much as what the consensus would have out there.
We have no competition. So there is no need for us to worry about.
Bundled rebates to physician practices with this product. So we are developing leverage within the P&L. So we can grow consistently.
Carefully.
Okay, great. Thank you.
Thanks, Doug.
And we will take our next question from Greg Sanjay <unk> with <unk> Securities.
Hi, guys. Thanks for taking the question one.
Once the practice and FX practices onboard and ordering how much attention described as required rapid clearly your focus is shifting towards according to current customers.
Curious what percentage of reps will be devoted to ordering customers going forward versus what they had been doing previously.
Yes, once once we see a cadence where we're getting.
A few patients per day.
I think that can be roughly 10% of their time.
Not a major.
Part of their day, but.
Right now most of our practice arent really giving us two a day or one a day.
So we spend a lot of time.
Events with them and trying to.
Bring in their local Influencers build the momentum and then also we've got to train the practice, which is quite easy for this product and quite frankly, we're getting a lot of help from the front desk in the assessment, which is unusual because it's very easy to diagnose if you will.
And look for a very interesting result, with this product because we're happy to provide samples. So there's no risk of the patient so.
At the end of the day it shouldn't require too much of their time, but right now depending upon the size scale of the practice.
It could be a fair amount of their time driving it through in camping out for a while but there is no replacement for the early boots on the ground here.
Got it Okay can you talk a bit.
More about the runway and the options that you're considering the strength of the balance sheet and then on business development.
Just some color on the types of things that Youre looking at and do you have to strengthen the balance sheet before moving forward with.
Looking forward with one of these deals that youre contemplating thank you.
Yes.
Yes, certainly from a cash flow and covenant perspective, we're comfortable for the year.
Thank.
When when you look at single product companies.
I think it's very clear that you need to leverage that base of expertise.
I.
I think if there's one thing that is very clear is our sales organization has really crushed it and introducing a whole new category and carving out sales where there was nothing.
So we really want to leverage that team.
And we are in a number of conversations right now that.
I think gives us a lot of confidence that we're going to get there.
Yeah.
And we'll take our next question from.
John advantage of Michigan.
Zacks.
Good morning, guys.
Explore.
E Commerce platform is going and what are some of the hurdles I guess that you've.
Seen so far with that and what do you expect going forward.
Yes, John Thanks.
Thats really a key part of our revenue build as we go through the year.
And I'll, let J D elaborate on it in a few moments but.
This will be.
The sort of final piece that we were really missing.
From the very beginning of our launch both into <unk>, and then into aesthetics and thats the ability to create a subscription model.
Which is really what the telemedicine companies have down to a science. So JD you want to take it a little bit.
Yeah, Yeah, and thanks for the question John .
And we are currently in.
In the midst ongoing testing and I think that's been a really important part of the rollout for us.
<unk> technology, driven and we've seen this time and time again.
Across the industry, but we got to make sure that this is working bugs the simplicity.
<unk> C et cetera, both from a provider or a customer standpoint.
But also from a patient perspective, and so we're spending time right now ensuring that all of that is working and remember.
This is a fairly unique.
And complex platform in the sense that we're able to connect.
Patients that are coming into offices, we otherwise would not have direct visibility or line of sight in terms of walking out the door with an up meek prescription or box and our direct expense model.
And giving.
Our business, but also provide earns the ongoing connectivity.
Scribe and allow our pharmacy to pull through refills and ongoing customer orders. So it's going well we're excited about it and I think it's going to add and Brian touched on this a completely different dimension too.
The scalability of our business because we know from the original business model, where everything was coming through our pharmacy, which still constitutes a nice piece of the business that patient behavior.
<unk> and Greenfield, but when we're able to be connected with new patient starts in that way, we're able to pull through greenfields.
So it is going to be a meaningful addition, and enhancement and I think a value add to both patients and providers.
Okay. Thanks, Thanks, Judy I'm getting the message throughout the whole business, it's really a big focus on on the Reorders and getting customers to stick with the product.
As I do my work.
Frequently see your social media ads and wanted to ask about that how are those campaign is doing.
How do you see the effective effectiveness of those.
Is that the best place for their marketing dollar what is it.
What are your thoughts on that and how do you how do you.
Since that it's working.
Yes, John .
Question, and I'm going to flip it to two.
J D, but I think.
The social media is very interesting most of what you see.
From our providers that are posting results within their own practices.
Whether it's on actually themselves.
For the most part.
Or in fact, some of their patients and also it's influencers that are managed or treated at the practices.
But I think the real opportunity for us.
Is in the total scheme of consumer awareness.
I don't think people know this brand really exists yet.
J D. You want to add to that I know this is a.
A topic very close to your heart.
Yeah, and look I think.
One of the questions Jon as you know is that the.
Most effective use of marketing dollars and I think you can tell right we're trying to create.
Operating leverage here and be disciplined in our spend and so one of the ways that we are able to do that is through providers driven social media, because thats not something that cost us a lot of money in terms of deployment of cash and investment that's more of an organic.
<unk>.
Marketing tool that we can leverage based upon the experience and enthusiasm of this product being introduced to a practice and I think where it really helps though.
<unk> raised not just broader awareness in terms of patients that.
That are going to new practices that are added and having the ability to learn about the product, but also the consistency of it.
Experience across a growing number of accounts.
Not something that is just.
A handful of practices that were prompting to post great before and after this is becoming a routine part of how each practice introduces the product to their patient base and I think it is helping.
At the end of the day, we've got to expand the top of the funnel and help practices pull through.
That expanded top of the funnel and it's a little bit of the traditional pushed Paul concepts. So we leverage their social media to introduce patients and then were in Theyre rolling up the sleeves figuring out the most efficient way to make this a routine part of what they're doing because of the patient satisfaction.
And the result that we're getting as we continue to expand the new patient start.
Piece of our business day in and day out.
Great. Thanks for that and also.
Wanted to ask about gross margin, we've seen inflationary pressures throughout.
Sure.
Last couple of years and your gross margin has been very strong where do you see that in the next year in 2023.
Some of those pressures continue does that does that affect your pricing decisions at all or maybe you can give us a rundown on how youre looking at that and what.
Pressures you're facing.
Hey, John Hey, Good morning, it's most of the features I think and I think we're not seeing a tremendous impact from inflation.
I'm Mary costs are kind of locked in so I think what youre seeing from us now.
Low to mid seventies.
Gross margin on our product sales I think thats I think thats, mostly locked in at this point.
Certainly in the near term.
And on the pricing front I think when we rollout the.
E Commerce platform elevate.
I think we're going to have a lot of pricing options for the consumer.
So while yes.
We enjoy a pretty good price right now and the practices and it provide us enjoy a very good margin.
We will be able to reward.
Continuing customers.
With many more price options if they find that price is an issue.
So I think we're really look.
Okay, and just just a follow up on that if I may.
At the second third and fourth quarter gross margin as you said Michael.
In the mid seventies, approximately should we see 2023 levels.
With that with the second third and fourth quarter or.
Might it go up or down a little bit from there.
It might improve a tiny bit but not much its pretty much as we've described.
Okay, Yes.
Alright.
Thank you so much I appreciate it okay.
Operator next question.
Thank you we'll take our next question from velocity Amazon.
Our claims.
Yes.
Hi, Good morning. This is Michelle on the call for <unk>. Thanks for taking our questions. I Remember you mentioned, the 1000 and the ordering account exit in Q2.
Q3, and 600 exit in Q2, so maybe on this number but what is this number looks like for Q4 and expect similar uptake for the rest of the year. Thank you.
Yes, so I want to make sure.
We have it right. So JV do you remember the <unk>.
New account growth that we saw in Q4 over Q3 I'm not sure.
Joe had nearly 1000 accounts it was from 43.
<unk> thousand $500 to 4300, I think is the cadence the new in the new account openings moving from September 30 to December 31, and aesthetics perfect. Okay. Good. So I think as we look at 2023.
We're going to be a little more careful in opening new accounts I think we want to slow it down a bit.
We're not in a race here.
If anything anyone's what ourselves and.
Again, we're going to be spending more time with the accounts driving it's driving that sticky reorder business. So we know we're adding new accounts every single day this quarter.
And when we come out with our first quarter results will be a meaningful uptick, but I don't think it will definitely not be at the same pace.
As it was last year.
Lots of people out the product and we're just going to get to the people that are going to commit to us the most time and energy first.
Sure.
Got it very helpful Sarcoma, I talked it was unheard of adding to stay that you highlight 1000 will be ordering accounts.
In Q3, and 600 ordering a contact lens in Q2, so could I have the specifics of the auditing account number accidents in Q4.
And El Paso, sorry, thoughtfully going the wrong way.
Okay.
Unless J D has it on his fingertips, we're going to have to follow up with you after the call on that specific number.
Yeah. Thanks.
We'll close the loop on that specific but it's about the same absolute growth that you saw from Q2 to Q3.
That's very helpful. Thank you right.
Right around.
1400 or so.
Got it.
Thanks, once again bye.
To ask a question please press star one.
We will take our next question from Glenn Saint Angelo with Jefferies.
Yes, Thanks for taking my question, Hey, Brian I want to follow up on this on the telehealth business sort of introducing here or are you willing to disclose at this point, who the two national providers are in and what I'm trying to get a sense of is how the business model is going to work or are they going to be.
In the script to you and Youre going to do the fulfillment or are they going to do it I'm just trying to want to make sure I understand how the revenue recognition around this new initiative will work and Im kind of curious to get your thoughts. If you think it can be meaningful here in 'twenty three as you get it off the ground.
Yes, Glenn.
And the good questions and good morning.
I hope you didn't have to wake up extra early for this but.
The two telehealth Tele medicine providers that we're working with now are skin solutions MD Andrew.
And Roe.
Both of them are very different.
Both of them.
Arent in scale scope.
But have.
A meaningful presence in a bit of good history here and working and telemedicine. The way. It works is we're treating telemedicine as an aesthetic account.
So we are shipping to them.
When they receive the product will record the revenue and then they will be selling it through their channel through their providers to their patients.
So.
Patient needs an assessment that's done by the telehealth telemedicine.
Listen provider and they handle all the shipping so in terms of efficiency. They may be our most efficient channel. If you will because they handle fulfillment and shipping to the patient.
But we treat them basically as a provider.
Okay, maybe if I could just.
Follow up with just two quick financial questions I did want to follow up on the business development question because it seems to in your prepared remarks, you seem to suggest that.
Something may happen in 2023, and I think we're looking at the cash on the balance sheet looking at the SG&A you reported this quarter and I'm just wondering how would you expect to finance something like that.
Would your covenants allow you to take on more debt or.
It's hard for us to think about the size of anything.
May potentially do and then my last question is really around the lack of guidance it sort of seems like the aesthetic business is up and running now.
Now clearly established and maybe with a much better line of sight than what you had obviously last year and so I'm just kind of curious as to what the logic is to not provide guidance at this time.
<unk>.
Yes, and I think the main logic is it'll circles back to some extent the business development.
And also the fact that were brand new category. So while we're putting our head down right now driving that reorder business and again all the metrics there from our perspective are really very promising the other component of this is right now our sales force is spending 100% of.
Their time driving uptake.
We bring in new programs or new products to leverage the team that will take a little bit of time off of <unk>, and obviously they'll need to put it on the new program and that's a lot of the conversation that's happening as well right. Now there is also an opportunity in eyecare ware.
We are talking to people about do they want to go back into it with their platform because they are looking for the same thing we are looking for an aesthetics and I think ultimately if the model looks good and it makes sense, we can talk to our lender about increasing the debt, but we don't want to increase that and we don't want to do another offering what we wanted.
Do as is operate as efficiently as possible drive leverage off the P&L and we're doing it right now.
And bring in programs that can help absorb.
Our basic model right now and with the additional revenue streams and again Theres a lot of those conversations ongoing right now so guidance for me at this point would be premature.
Okay. Thanks for the thoughts.
Okay. Thank you.
It appears that we have no further questions at this time.
I'll now turn the program back over to Brian Martin for any additional or closing remarks.
Thanks, operator, and thanks, everyone for listening into our call today.
Think it's really important to keep front and center. The fact that we are a unique product in the marketplace. We do not compete in the traditional aesthetic markets of fillers and taxes.
We are a very simple product to administer and we make everybody look better who gets it.
Literally within minutes after they've received the sample. So we're excited about our product we love the growth, we're seeing and I want to thank again, everyone for sticking with us.
Listening to the call today, thanks operator.
That concludes today's teleconference. Thank you for your participation you may now disconnect.
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