Anika Therapeutics Inc. Q1 2023 Earnings Call
Good afternoon, ladies and gentlemen, and welcome to any cast first quarter 2023 earnings conference call. At this time of lines are in a listen only mode. Following the presentation will conduct a question and answer session.
<unk> if it's anytime during this call's required immediate assistance. Please press star cereal 40, operator. This call is being recorded on Tuesday may 9th 2023, I dunno trying to call over to Mister Mark number off Vice President Investor Relations E. S G and carp communications. Please.
Scott.
Thank you good afternoon, everyone. Thank you for joining us for Attic is first quarter conference call a webcast.
Press releases issued after the close of the market today and is available on or an investor relations website.
Annika dot com as our supplementary Powerpoint slides double used for the discussion today.
With me on the call today, a doctor Sherrill, Blanchard, President and Chief Executive Officer, and Michael <unk>, Executive Vice President and Chief Financial Officer and Treasurer. Please.
Please take a moment and opened a slide presentation.
<unk> decided number two.
Before you begin please understand that certain statements made today during the call authenticate forward looking statements as defined in the Securities Exchange Act of 1934.
Payments are based on our current beliefs and expectations and are subject to certain risks and uncertainties.
The company's actual resolved results could differ materially from any anticipated future results performance or achievements.
We make no obligation to update these statements should future financial data or events occur that differ from the forward looking statements presented today.
Please also see our most recent SEC filings for more information about risk factors that could affect our performance.
In addition, during the call we may refer to several adjusted or non-GAAP financial measures, which includes adjusted gross margin adjusted EBITDA adjusted net income and adjusted earnings per share, which are used in addition to results presented in accordance with GAAP financial measures measures.
We believe that non-GAAP measures provides an additional way of viewing aspects of our operation that performance.
Someone considered with GAAP financial measures. The reconciliation of GAAP measures. They provide an even more complete understanding of our business.
Conciliation of these adjusted non-GAAP financial measures to the most comparable get measurements are available at the end of the presentation slide deck and our first quarter 2023 press release.
And now I'd like to turn the call over to our President and CEO , Dr. Sharyl Blanchard Cheryl.
Thanks, Mark good afternoon, everyone and thanks for joining us.
Are you starting to slide three.
We are pleased to report the Annika had a positive start to the year, while I reported revenue showed growth of 3% the core parts of our business were up 9% in Q1.
As we've seen the environment for some orthopedic elected procedures improving.
After at the rate of pain management revenue stronger than expected and a quarter and remains the market leading business that continues to win globally.
We were excited to see double digit growth and joint preservation and restoration in the quarter, which included early traction from our recent product launches with X twist and read the motion.
An international growth driven by geographic expansion and timing.
R O a pain business, including our sales and marketing partnership with Jane J My Tech <unk> north of asking the U S.
Continues to provide a healthy financial foundation to support the investments driving our growth strategy.
In addition to our market leading products in the U S would also particularly pleased with our strong international performance as we grow market share of R. O a paint products, especially cingal as more and more conditions and their osteoarthritis patients realize the benefits of this truly next generation non opioid pain product.
With respect to thank all we are actively engaging with the F. D. A regarding next steps for U S regulatory approval and exploring commercial partnerships to advancing all in the U S and select Asian markets.
We're excited about our continued progress and momentum in our joint preservation and restoration portfolio.
We had great traffic and training opportunities at our booth at the American Academy Orthopedic Surgeons meeting in March with a lot of interest across our full joint preservation portfolio.
We're building traction and adoption as we continue to hear great feedback from surgeons. Following the Q1 full market release of X twist antiques cornerstone suit your anger system as we increase awareness and educate surgeons about its flexibility and surgical versatility across procedures in the shoulder and the foot and ankle.
We're receiving great early clinical feedback following the successful limited launch of our new read the emotion reverse shoulder system, which significantly expands our shoulder arthroplasty portfolio.
Patients are doing well in their early post op visit some now out to four months and surgeons are extremely pleased with the post op X rays.
We look forward to building on this momentum ahead of a full lunch, which were continuing to target towards the end of this year.
<unk> <unk> regenerative solution for insufficiency fractures and hardware augmentation received an additional five 10-K clearance further building the taxes that franchise tag.
<unk> said as now cleared for use without telling his bone marrow aspirate, a key component in regenerative healing.
I'm also happy to welcome Gary Chris Shetty, who was appointed as a new independent director in April .
Gary brings decades of relevant experience in the medical device industry, including more than 35 years, and Johnson and Johnson with both domestic and international leadership responsibilities and we look forward to leveraging his expertise as we advance our strategy and capture the significant opportunities ahead.
Now moving on to slide four.
Over the past three years, we've been investing with purpose to fundamentally reposition annika to be a global leader enjoying preservation with a focus on early intervention orthopedics, leveraging our core expertise and highly around like acid and are designed heritage of early intervention bone sparing devices.
Our efforts have successfully expanded anarchist market opportunity from 1 billion to more than $8 billion today and created a powerful growth engine for years to come as we remain focused on launching new products in the high opportunity spaces in faster growing segments within orthopedics.
The first update as for tack to set as a reminder, <unk> is an important franchise, we're building and a product we continue to get great clinical feedback on <unk>.
Now in the process of launching the new indication for use with bone marrow aspirate as we continue to expand our portfolio for regenerative healing with an additional five 10-K plant.
Moving on to X twist now that we're in full market release. We are also developing a biocomposites version as we continue to expand on our differentiated suit your anchor platform.
As we announced last quarter, we've developed a new <unk> acid based arthroscopic regenerative rotator cuff patch system, which will further strengthen antique is growing and differentiated shoulder portfolio.
We've initially designed the pet for the shoulder to provide augmentation to the tendon to support healing for rotator cuff tears.
Anarchist patch is mechanically stronger and further improves regenerative capacity compared with the first generation college in patches on the market.
We've completed multiple sites in case submissions at the end of 2022 ahead of a planned launch next year.
Sure additional details about the product once the entire system has been cleared and we're gearing up for first surgeries.
In short we believe our regenerative patch will be a game changer for patience and Annika is it helps complete an innovative and highly differentiated children portfolio.
We are also advancing are longer term opportunities, which will further augment and reinforce anarchist growth once they're available in the U S.
In addition to our active engagement with the F. D. A regarding next steps for Cingal approval, which we believe could potentially double R 1 billion dollar addressable market and O eight pain.
We're working to enroll the final subject in the pivotal phase three clinical trial for Halifax are highly differentiated single stage off the shelf cartilage repair product.
Last quarter, we announced that Hyla fast was designated as a breakthrough device by the F D a allowing for prioritized interaction and review to enable patients faster access to new therapies.
We remain on track to file a P M. A for heil fast in 2025.
And given its differentiation as a single stage off the shelf solution, we believe that Halifax has significant market expanding potential.
As you can see on slide five we're focused on building a robust and differentiated shoulder portfolio by providing solutions for the full spectrum of rotator cuff pathologies that brings that unique value proposition to surgeons across the a S. C in hospital settings.
Dispositions Annika for continued growth as we capitalize on the approximately 2 billion dollar market opportunity across the shoulder continuum of care.
Prevalence and progression of rotator cuff disease needs multiple strategies and solutions, which annika is addressing through our comprehensive portfolio of products across sports medicine, regenerative solutions and Arthur surface joined solutions.
Read the motion is a highly differentiated reverse shoulder system that now gives anika access to the full shoulder replacement market with a focus on a bone sparing design and a streamlined to instrument tray system.
The launch of Reeve emotion has dramatically enhanced the opportunity to drive our Arthur surface joint solutions products, specifically of emotion in in like <unk> are total shoulder system.
In sports medicine, or extra is designed facilitates soft tissue repairs that other systems are unable to accommodate.
We're adding new surgeon accounts and surgery centers as the product gave the acceptance and we drive deeper penetration into those accounts.
On the regenerative side, we offer the innovative solution of taxes set to augment hardware.
Specifically with suit your anchors when surgeons encounter poor quality bone.
This provides a truly meaningful solution to achieve a strong repair.
With the recent launch of extra list, we now have the opportunity to cross sell tack to set for augmentation, providing an additional growth driver is anika products are used in more rotator cuff procedures.
Finally, as we look to its plan launch in 2024 R. A J based arthroscopic regenerative rotator cuff patch system provides a strong foundation and regeneration alongside <unk>.
Giving me attractive market for regenerative patches. We believe this arthroscopic system has expansion opportunities beyond the shoulder and will also be a key driver for growth.
Was that overview I'll now turn it over to Mike for a review of our first quarter of 2023 financial performance Mike.
Sure. Please.
Please turn to slide six.
I will not walk you through our financial results for the first quarter of 2023.
I'd like to remind everyone that beginning in the first quarter veterinary sales historically reported with an O. Eight pain management are now included in the non orthopedic product family for all periods presented.
Total revenue for the quarter was 30 $749 million an increase of three per cent over the prior year is continued growth and nobody pain management and accelerated double digit growth and joined preservation restoration would partially offset by lower ancillary monitor computed revenues.
The lower Nonrepeat of revenues reduce total company growth in the quarter by approximately six percentage points.
Revenue in our largest product family always pain management increased 8% to $22.6 million due primarily to favorable ordering patterns from changing my tech and sales growth on increasing customer demand.
As a reminder, revenues can vary significantly on a quarterly basis based on ordering patterns by our partner in the U S and distributors internationally I work with that quarterly volatility generally stabilises on an annual basis.
Are joined preservation and restoration revenue in the quarter increased 11% to $13.5 million on growth from our new products as well as geographic expansion and favorable order timing internationally.
Or non orthopedic revenue declined 49% to $1.8 million, primarily reflecting unfavorable order timing by our veterinary distributor.
As well as our exit from legacy product lines, but do not support our growth and profitability objectives.
Our gross margin in the first quarter was 60 per cent and includes the impact of $1.6 million in non-cash acquisition related expenses amortization from the 2020th acquisition of Arthur surface and purchase medical.
Are adjusted gross margin, which excludes the acquisition related amortization with 64% of the quarter in line with the same quarter last year.
From a spending standpoint, our operating expenses totaled $35.4 million in the first quarter up from $25.4 million in the same period of 2022.
Our operating expenses in the quarter included $5.8 million of nonrecurring corporate cost <unk>.
Including a charge for $3.25 million related to an arbitration settlement in April .
Those any further claims from the 2020 acquisition of park is medical.
$800000 costs related to shareholder activism, which was also resolved in April .
As well as $1.7 million of other non-recurring corporate cough.
Apart from these non-recurring costs are operating expense broken the quarter reflects increased cost to comply with expanded global regulatory requirements and investments and operational capabilities to support our sustainable growth. The majority of which are associated with our early pain management and other legacy products.
As well as new product development and expanded marketing in support of key product launches.
Our net loss for the quarter.
$4 million or 71 cents per share compared to that loss of $2.9 million or 20 cents per share in the first quarter of last year.
Are adjusted net loss with $5.3 million or 36 cents per share compared to our adjusted net loss of $1.6 million or 11 cents per share in the prior year.
Again R lower bottom line reflects the impact of the significant monitoring expenses incurred in the quarter.
As well as the increase spending to support the continued sustainable growth of our legacy product lines as well as our growth acceleration initiatives.
Our adjusted EBITDA in the quarter was a negative $1.2 million.
Down from adjusted EBITDA generated a $2.6 million in the first quarter of last year.
The decrease in adjusted EBITDA was primarily due to $1.7 million of nonrecurring corporate costs.
As well as the cost to comply with expanded global regulatory requirements and.
An expansion of our operational capabilities to support our continued growth.
Lastly, with regards to our cash flow and capital structure and.
<unk> balance sheet remains strong with $79.7 million in cash and no outstanding debt as of March 31st.
We had operating cash outflows to $3.6 million during the first quarter compared to outflows of $1.9 million in the prior year period.
In our capital expenditures in the quarter $1.4 million up slightly from $1.3 million last year.
<unk> investments in support of our new product launches, an overall business growth.
We also recently announced that in April our board of directors authorized new stock repurchase program with $20 million with the first $10 million split between an accelerated stock repurchase program and an open market program.
And a second $10 million through an open market program subject a positive cash flows.
Please turn to slide seven.
Now I'd like to review our full your financial out look for fiscal year 2023.
Based on our progress to date, we are reiterating our full year 2023, total company revenue outlook of $158 million to $163 million representing growth of 1% to 4% compared to 2022.
And reiterating your outlook byproduct family.
As continued growth and nobody pain management and accelerated double digit growth and joined preservation and restoration are partially offset by lower ancillary non orthopedic revenues.
The lower non orthopedic revenues reduce total company growth by approximately three to four percentage points.
N O a pain management, we expect revenue of $93.5 million to $96 million up 2% to 4% over 2022 as our market leading products continue to gain adoption globally, but also reflects favourable international timing last year from a comparative standpoint.
With the timing of multiple product launches this you're enjoying preservation and restoration, we expect full year 2023 revenue growth to accelerate to $55.5 million to $58 million up 10% to 15% over last year with that group waited more towards the second half of the year.
We expect non work with <unk> two decreased approximately 35 per cent to $9 million as an anniversary out of revenues in the prior year from last time buys a legacy products, we exited and reflecting order timing in veterinary sales last year.
With regard to gross margin, we continue to expect adjusted gross margin for the year to be roughly in line with last year's gross margin as marine focused on driving margin expansion, but also anticipate the ongoing headwinds from the global trends in supply chain and staffing challenges will likely continue.
With regards to spending.
While spending will be higher than the first half of the year due to a number of nonrecurring situations such as the park is medical arbitration and shareholder activism.
Now that we've settled both of those in the second quarter, we expect operating expenses to normalize in the second half of 2023.
We continue to expect operating expenses for fiscal 2023 to increase over 2022 is a percentage of revenue as we sell fund our growth strategy.
Including both the cost of complying with expanded regulations globally and investments and operational capabilities. The majority of which are associated with R. O a pain management and legacy products.
As well as our product development and launch initiatives to drive accelerated growth.
We continue to expect our adjusted EBITDA margin for the year to be in the low single digits and capital expenditures to increase in 2023 above historic depreciation to support the rollout of key new product introductions and equipment to support our legacy business.
Our team remains focused on both Anarchist's mission to restore active living on.
Driving value creation for our stakeholders and we look forward to updating you on our continued execution of this strategy I.
I will now turn the call back over to Cheryl.
Thanks, Mike Please turn to slide eight.
Before we open the call up for Q&A I want to reiterate our excitement for the coming year.
As our first quarter results demonstrate we're just starting to realize the significant potential of our comprehensive and expanding portfolio are.
Are targeted investments have helped us build that uniquely focus joint preservation portfolio across the continuum of care in regenerative solutions sports Medicine, and Arthur surface joins solutions.
Annika is well positioned to continue to execute on our growth strategy with multiple near term value drivers, including the full market release of X. Two is now underway and a <unk> motion later this year.
And the launch a R. A J based arthroscopic regenerative rotator cuff patch system in 2024.
And finally, we have a healthy balance sheet with a solid cash position and no deaths positioning annika to drive significant shareholder value.
I would like to take a moment to thank all of our employees for their continued hard work and dedication to supporting our efforts. We're building momentum as we work to achieve our mission of restoring active living for people around the world.
And with that will open up the line for questions.
Thank you.
Gentlemen, we will now begin the question and answer session should you have a question <unk> followed by the one on your telephone keypad.
<unk> I see it on comp acknowledging request questions will be taken in the order received should you wish to cancel request. Please press the star followed by did too if you're using a speaker phone.
Handset before pressing any keys one moment. Please for your first question.
Your first question comes from the line of charge Solace from Stephens, Inc. Your line is now open.
Hi, This is personal for George good afternoon. Thanks for thanks for taking my questions.
I wanted to start by asking you about what you're saying in terms of <unk>.
Procedures move into the F C. A S C. Specifically in terms of the reverse shoulder.
Shoulder.
That emotion.
<unk>, so what kind of impact are you seeing from that dynamic now while still in the lemonade market relief and how do you see that movie.
Moving longer term.
Thanks for the question Harrison It it's a great question and we did design reeve emotion with the AFC in mind, we are in in our limited release, we are seeing procedures done in the AFC and the hospital setting and the majority of that market. Those procedures are still done in the.
[noise] hospital setting just because of the current situation with reimbursement from CMS, but the the patience to qualify and the the payers that are inclined in that direction will support those procedures being done in the AFC. So for our limited release <unk>.
<unk> whenever their respective share of patients that they do in the a F. C. We are seeing it being used there with really great feedback and the feedback in general on that system has been very positive I I mentioned in my prepared remarks that we're seeing.
Really great X rays coming back from the surgeons. The surgeons are reporting that their patients are doing very well many of them out to four months at this point in time and that the system is working very well in both the hospital and the AFC setting. So we we look forward to continued to serving both of those <unk>.
Points with the opportunity for our system to really have uptake in that <unk> because of the way it was designed.
Yeah, the the skirt sounds good add another question on <unk>. The additional five 10-K, Clarence <unk> I was wondering how how we should think about that market opportunity on their you've you've tact tact set as as.
$100 million plus market is that additional.
<unk> clearance.
Incremental under a thousand.
Sorry $100 million market.
Or is that just kind of filling out filling up the market.
Yeah, we we really felt like bringing that bone marrow aspirate indication to taxes that was still targeting that hundred million dollar market and was an important part as we continued to build out that franchise. So I would think of that market opportunity really <unk>.
Bringing that additional five 10-K clearance to fill out that full market of $100 million.
Got it thanks for taking my questions.
Absolutely.
Thank you and your next question comes on the line <unk>.
Research. Please go ahead.
Hey, guys a couple of questions like on the R&D expense.
When you refer to the global.
Global requirements.
I'm, assuming that an M. P R or is that or is there something else. There. This driving an incremental costs and can can you just speak to sort of what's what's the new normal in terms of.
Andy expense going forward.
Hi, Mike Yeah, you're absolutely right.
The the increased regulatory requirements are largely associated with M D or in Europe , but they're not limited to that so we had in the quarter about $800000 of external spend alone related to empty. Our we think it's gonna be probably three or $4 million for the full year because.
There is a bolus of costs associated with getting all of those filings in and all the associated testing and work.
To support those filings. So it is definitely an incremental spend it's something that we would expect will come down over time I as as we get through this because a lot of that spend the majority of that spend is related to our legacy products, where we sell those in Europe and globally, but it's not just limited to M. P. R. So when we think about.
The incremental cost there's the external costs associated with N B R.
And then there's the internal cost to support all of that extra work and the complexities associated with that and what we're seeing is the same.
Discussions that you're hearing on the M. D. R. Sorry, you're seeing expanded global requirements, we're seeing expansion globally and our business both in <unk> and in sportsmen and so between Joy preservation and O. A P management as we had three different countries. There's just more more work and more complexity. So we.
Got the external costs associated with M. P. R. And then we've got the the work Israeli supporting those and those are the things that are that are driving me already crossed up.
So I mean, eight and a half.
9 million Bucks a quarter I mean is that.
Research.
Sort of peg, that's going forward or or.
Can you just speak to that.
Yeah as I said, there's about so as I said, there's about 888 hundred K this quarter related to M. P. R and I think you know, it's gonna go up and down on a quarterly basis, depending on the work Uhm I do expect it's gonna be three or $4 million cost, which is probably maybe $2 million or so.
And last year.
If you wanted to look at it from a run rate basis, and then there's the <unk> as I said the incremental costs associated with all the internal team work to manage all of these different efforts. So.
We haven't given guidance specifically for the line items within Opex Uhm boat I did reiterate our guidance expectation from a total EBIT standpoint, so nothing's changed as it relates to our expectations for the year.
And then I guess on Cingal Cheryl Cobb.
Conversation.
How active these are but I mean, when would you expect some roadmap as far as hey. This this is what you need to do or don't need to do sort of to to move this forward down the track I mean, when do you think you'll have a.
Sort of a slight wind towards what you need to do.
Yeah, Great question, and we are actively engaging would that be a right now it is difficult to predict timing.
In some cases with active interactions with F D a but.
I would tell you that those engagements are actively occurring and I you know I would look forward to being able to give an update to you all as soon as possible.
Alright can I, just ask you and I I understand speculation, but I mean do you think do you think the timing of the next conference call you you'd likely have a path forward or or do you think it could drag through you're no longer than a year.
Yeah, I I don't I don't know that it's healthy for any of US for me to speculate on timing like I said, we are actively engaging with them and I as soon as I have an update I will provide it.
Would that be the kind of update that would wait til we conference.
Conference call or would that actually be a press release.
Not not necessarily it could be a press release it could be an update that I gave it a future investor confidence is it just kind of depends on the timing of it and the content of it but I it doesn't necessarily have to wait until the next conference call.
Alright, and then I was just wondering in in this this may also be tough too to provide but obviously people love love to hear any any further commentary around the twist.
Oh, it's very early innings properly, but at the top of the first inning, but I mean anything you can say around you know a number of dogs.
Tried the product reorder rates I mean any any.
Anything you can share their even anecdotally as far as what you know getting traction means thanks.
Yeah, I mean, I I guess, what I would say is we are.
We really are building traction and adoption we've done a lot of training. We are are starting to see.
Additional kind of depth in accounts with additional surgeons and <unk> that are beginning to use it.
It's still early days, where a quarter into the full release. So that's why we're not providing like specific numbers at this point in time.
But we are are really getting a lot of very positive feedback on the product itself and we are seeing really nice traction once adoption occurs within a given account. So I'll look forward to giving additional matrix on that going forward. Once we we have a bit more of experience under our belt.
We're we're just now you know one quarter into a full market release.
So and then just the last question on the obviously balance sheet remains Christine.
Are you guys seeing any interesting assets are you being shown things what's evaluations I mean, what is there anything you can.
Talk about there.
Yeah, we we continue to look at opportunities that we think are on strategy for us. We we feel like there. There are are things that we will continue to look at valuations remain high and I've seen other C. E. O's make the same comment in the last couple of weeks with earnings calls.
And at the same time I think we we have a pretty significant pipelines that we've developed that were pretty focused on driving commercially right now and you know I'm I'm always balancing distraction with what we've got right in front of US. So we will stay focused on what we've got coming into the market right.
Now and continue to look at things that might be available out there from an inorganic perspective.
Very good thank you.
You're welcome thank you.
Mmk and your next question comes from the line of James utility from Sidoti.
Go ahead.
Alright, good afternoon, thanks for taking my questions.
The settlement you made with the related to park as to the shareholders through those were both completed.
April so I was surprised to see that they were on the March quarter income statements alright.
Well you know why why was that.
Hi, Jen.
We will see costs associated with both of those in the first quarter and in the second quarter Uhm, because you're absolutely right. They were both resolved in April .
For the arbitration settlement that wasn't an ongoing contingency in under GAAP, you would record that <unk> current open period. So we reported the settlement there of $3.25 million in the first quarter.
And we have we broken that out separately and are excluding that come from a non-GAAP basis also in the first quarter, we had our own legal costs associated with the purpose arbitration and otherwise and so we've we've kind of taken out amongst other related non-recurring costs and call back out of this one.
$7 million in the quarter not related to those legal costs and in others.
We believe to be non recurring.
So you've got that and then we also incurred $800000 of costs associated with the the activist matter.
That was costs incurred in the first quarter Uhm, we will have we have three in another maybe two and a half million dollars of non-recurring costs in the second quarter and that would include all the active aside.
<unk>, yeah, as well as the cost of where you're going to cover under the cooperation agreements that were incurred by by the activist.
And then we also have the cost of <unk> legal costs associated with the purpose arbitration matter.
And you know in the beginning of this quarter so.
We called him out as non-recurring we've got $5.8 million of those in the quarter as I said, another two and a half million dollars in the second quarter Uhm and we've we've broken off a settlement Andy activist matter as non-GAAP adjustments the ongoing legal costs they've been in.
[noise], our run rate and and haven't been material enough to call out before we're calling them out now those are not excluded for non-GAAP , because we're treating those consistent with how we've treated them before but we wanted you to understand they were elevated in the quarter and that's why we called the amount is not accurate.
Okay I got it now do you think you'll have an additional charge in the second quarter for park as soon as well.
Yeah that was included in what I was just describing so I think there's two and a half a million dollars <unk>, we'll see how old the cost come in but two and a half million all end up non-recurring costs.
And I would say you know it was a small amount of that is finishing up with the of the park is arbitration from our internal spent.
Got it got it okay now with regards to the rotator cuff patch I think you've filed for that last year are you do you have the approval to launch that at this point or at least they're still regulatory work to be done for that.
Hi, Jim Yeah. There there were multiple sites in case that we file. This is a it is a regenerative patch based on how erotic acid and also other elements of a full system. So that's why there are multiple sites in case, we are not announcing kind of.
The parts and pieces as they come along but we will provide a more fulsome update once we have everything fully cleared through the F. D. A and because one element of that is a regenerative patch that tends to take longer from a timeframe perspective relative to how you might think about normal turnaround time for five <unk>.
In case, if there's a an element to it that's regenerative in nature of they tend to take longer. So the timelines that we've provided we still feel good about and.
You know there that's within the update that that we have communicated and as soon as we have anything more fulsome to announce we will do so we'll we'll look forward to that we're very excited about the system. We think it really completes the.
The full continuum of care on the rotator cuff side, and we see an awful lot of advantages of this system relative to the first generation college in patches that are in the market. Today. So we'll look forward to updating you further on that.
Okay, and then with regards to how fast I think you said you had one more patient to complete the enrollment and I assume it's it's 12 months follow up on that and then I guess, you're giving your cell phone to submit the the PMA and then <unk> to work with the F. D. A is that why you have a 2025 estimate for that.
Yeah. So you're correct, we have one more patient to enroll and will be as excited as anybody when we we get that study fully enrolled the team is working hard on that that that has a two year follow up which is why the PNA filing is 2025, so that that will be the the clinical.
<unk> module of that will be the last module filed but we're still on track to file that in 2025 and <unk> yeah.
<unk> final enrollment to announce we will do so.
Okay. So your file in 2025, I would think <unk> you know <unk> you anticipate a launch sometime in 2026.
Yeah, we haven't provided guidance on launch timing until we get a little closer but.
Suffice it to say that we'll get we'll get everything filed in 2025.
Okay, Alright, and then the last one for me Cingal sounds like pursuing strategic agreements would that'd be structured.
Under the agreement you have in place now for.
For your only pain management products.
Milestone payments attached to that or would that just be a straight distribution group.
Yeah, I I think you can think about especially the ones in select Asian markets to to look more like kind of a biotech pharma type arrangement.
In terms of structure and in terms of the one in the U S. We haven't really talked much about how those would be structured but the the select agent market type agreements are probably more how you would think about a strategic relationship that has structured payments. In addition.
Two supplying product.
Okay alright, thank you.
You're welcome thank you.
Thank you there are no further questions at this time and that does sound <unk> conference for today. Thank you for participating you mean now disconnect.