Q2 2023 Treace Medical Concepts Inc Earnings Call
Yes.
[music].
Good day, and thank you for standing by welcome to the trace medical concepts second quarter 2023 earnings conference call.
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I would now like to hand, the conference over to your speaker today, Julie Dewey.
Please go ahead.
Good afternoon, everyone and welcome to our second quarter 2023 earnings Conference call. We appreciate you joining us I'm, Julie Dewey treats as Chief Communications and IR Officer with me today are John trees, Chief Executive Officer, and Mark hair Chief financial.
Officer during the call John and Mark will offer commentary on our commercial activities and review our second quarter financial results released after the close of market today.
After which we'll host a question and answer session.
Press release and supplemental materials can be found in the Investor Relations section of our website at investors dot trees dotcom.
This call is being recorded and will be archived in the investors section of our website.
Before we begin we'd like to remind you that it is our intent that all forward looking statements made during today's call will be protected under the private Securities Litigation Reform Act of $19 95.
Any statements that relate to expectations or predictions of future events and market trends as well as our estimated results or performance are forward looking statements all.
All forward looking statements are based upon our current estimates and various assumptions.
These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.
All forward looking statements are based upon current available information and Trieste assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements.
Please refer to our SEC filings, including our Form 10-Q for the second quarter to be filed tomorrow. Our Form 10-Q for the first quarter filed on May nine 2023, and our Form 10-K for the full year 2022 filed on March eight 2023 for a detailed presentation of risks with.
I'll now turn the call over to John .
Thank you Julie good afternoon, everyone and thank you for joining us on our second quarter 2023 earnings Conference call.
Before we begin the call I'd like to start off by saying how proud I am of what our team was able to accomplish since our last earnings call and in the first half of the year.
We're pleased with the progress, we're making and we believe we are well positioned for the second half of 2023.
In the second quarter, we continued to execute on our strategic plan, resulting in sustained strong revenue growth encouraging adjusted EBITDA progress and continued gains across our key operating metrics reaffirming once again that we have the right strategies in place to expand the market penetration of our differentiated technologies.
Before I go into details about the quarter, let's start with our market summary on where we stand today.
Our disruptive <unk> solution was specifically developed to correct the root cause of the opinion and address a large and underserved market.
We have identified an estimated addressable $5 billion plus U S market.
An estimated $1 1 million annual surgical candidates of which only 450000 undergoing bunion surgery, each year, which we believe is mainly due to limitations associated with current standards of care.
We believe our proprietary lap a classic system addresses these limitations by surgically correcting all three planes of the bunyan deformity and securing the unstable joined thereby addressing the root cause of the ammonia.
As of the second quarter 2023, we've penetrated approximately six 2% of the estimated 450000 annual surgical bunion procedures in the U S up from four for four 6% in the second quarter of 2022.
And reflecting approximately two 5% market penetration of the estimated $1 1 million annual U S. Surgical candidates that constitute our $5 billion plus of total addressable market in the U S.
Turning to our Q2 results.
Revenue in the second quarter was $42 million, representing 40% growth over the second quarter of 2022.
During the second quarter, we continued to execute on our commercial strategies and benefit from our investments even if we saw some patients and surgeons prioritizing travel in time away from their practices.
We're extremely pleased not only with our topline growth, but our sustained positive trends in our key operating metrics, including.
Our expanding direct bunion focused sales team, which accounted for 79% of our revenue mix in Q2 compared to 68% during the second quarter of 2022.
Steady increases in the number of new surgeon users and in Q2 with 2581 active surgeons up 26% year over year.
Our year over year increase in trailing 12 months surgeon utilization with an average of $10 seven kits per active surgeon in Q2 up from $10, one kits a year ago.
Strong blended average selling prices of $6176 per lap a classic kits sold in the quarter, representing 8% growth over the prior year as our expanding direct sales team educates our customers on our broader portfolio of problem solving complementary products such as Dr. <unk>, our fast pitch screws or speed.
Release, and try to home tissue release instruments and other products.
Our strategic investments in commercial focus have continued to support the growth of our business, giving us confidence that we have a well defined proven and scalable commercial strategy.
Given these positive trends, we are raising our full year 2023 revenue guidance to $191 million to $197 million, which reflects an increase of 35% to 39% over 2022 revenue.
We remain committed to balancing aggressive execution of our targeted commercial initiatives to maximize our growth and market penetration, while delivering modest improvement in expense leverage.
Shifting to our commercial and market development activities.
As we previously discussed we have continued our targeted investments in 2023 with the goal of increasing our market penetration by <unk>.
Expanding the footprint and coverage of our bunion focused direct sales channel.
Advancing our patient awareness DTC initiatives and driving more targeted R&D innovations into the market.
We have a highly specialized team of trees, including a rapidly growing direct sales force one that it's 100% focused on bunion and related Midfoot surgery and he only such organization that we're aware of in the U S Med Tech industry.
We believe this has contributed meaningfully to our revenue and market penetration over the past years.
As previously mentioned in the second quarter, 79% of our revenue was generated by our direct sales force up from 68% over the same period last year.
We continue to see increasing productivity from the direct sales reps that we added during 2022 and as we've discussed in the past our historic data demonstrates that our direct sales reps typically scale with significant revenue and cost leverage achieved within 24 months, primarily because they are exclusively focused on our products and fully utilize our suite of corporate resources.
Programs.
Further over the past year and a half we've aggressively invested in our direct sales channel. We ended 2022 with 168 quota carrying direct sales reps and began this year with a target of having over 200 quota carrying direct reps by year end with.
With strong interest from candidate to join our direct sales team, we're happy to announce that we've already achieved our full year target by the end of Q2.
We plan to continue to Opportunistically hire to ensure that we are prudently balancing growth and delivering modest improvements in expense leverage all while increasing revenues from our direct sales channel.
Our patient awareness DTC initiatives are a key component of our commercial strategy.
As you May recall, our investment in DTC is resulting in hundreds of thousands of potential patients visiting our website every month.
On this strong momentum we have increased our DTC investments in 2023, incorporating new digital tools to make it easier for patients to connect with lap a classic doctors and as a result, we've seen a significant increase in patient initiated physician contacts on our website, which more than doubled in the first half of this year compared to the same period last year.
With one in four surgeons in the U S. Using the lack of classy procedure, we have a large and expanding national surgeon base that can now field inquiries from this higher volume of potential patients.
To further support this increased patient interest during Q2, we ramped up our new lap a classic call Center.
This call center is integrated with our patient website and serves as another communication and education channel for both potential lap a classy patients by answering basic basic questions about the lack of classy procedure with the goal of ultimately connecting these patients with train surgeons in their area.
Although early we are encouraged by the volume of calls this center is already receiving and believe this will meaningfully increase the number of inform patients who enter the lap of classy treatment funnel overtime.
Our surgeon education and training programs continue to be well received these.
These programs play a key role in the effective onboarding of new surgeon users and increasing the skills of existing surgeons broadening their patient indications.
We're encouraged to see continuing growth in our active surgeon base with 2581 active surgeons in Q2, which is up 20, 26% from the prior year period.
Demand for our introductory and advanced surgeon training programs, both online and in person remains robust and we look forward to executing additional training sessions that we have slated for the back half of this year.
As our surgeon base continues to develop we anticipate utilization gains with increased use of our lap a classing of Dr. Plastic systems as well as further adoption of our growing portfolio of complementary products all supported by our expanding direct sales channel differentiating clinical datasets and patient awareness DTC initiatives.
Speaking now to our product development strategy we.
We have an R&D team committed to driving innovation to maintain our industry leadership with programs for both next generation bonding correction systems as well as the development of new complementary technologies addressing other bunion related pathologies and IP defense of our technology and innovations. We now have 49 granted U S patents and 72 U S.
Patent applications pending.
We continue to advance our product pipeline with the development of several new technologies.
First our micro lack of classic system.
This is an advanced instrumentation option designed to further reduce both the incision size and related tissue dissection with the lack of classy procedure.
This exciting evolution of our instrumentation allows our patented lap a flashy procedure to be performed now through a two centimeter incision.
And our <unk> implant fixation platform.
This is a new fixation technology platform designed for rapid insertion, while providing dynamic compression of the joint surfaces.
And since it can be implanted through small two centimeter incisions speed play not only offers broad applicability with both our standard lap a classy and inductor Plassey systems, but also serves as the enabling fixation technology for our micro lap a classic system.
We have been performing limited launch clinical cases with speed play for several months in preparation for our full anticipated launch in Q4.
Initial response from Surgeons, who received early clinical access has been overwhelmingly positive specifically with regard to time savings stability and a dynamic compression benefits that the <unk> is designed to provide.
We're also hearing positive feedback from these early surgeon users related to the bone healing theyre seeing <unk> treated patients.
We continue to anticipate the commercial launch of our <unk> implants, and micro apoplast the instrumentation to begin in the fourth quarter of this year and will continue to build during the first half of 2024.
We're excited about the potential benefits. This micro lap a classic <unk> play combination can bring to patients as with any procedure that involve smaller incisions and less tissue dissection in trauma. We believe this could translate to even faster recovery with less pain and swelling.
We will provide additional updates on our new product innovations as we continued to develop our pipeline centered upon our core technologies and IP aimed at improving surgeon user experience patient outcomes and supporting continued market penetration.
Turning to clinical data.
Key differentiating driver for our business is our commitment to clinical evidence, which we believe resonates with both surgeons and patients.
From what we can see in the marketplace. We believe we're the only industry participant with a growing body of clinical data.
We look forward to presenting new interim data, including our two year primary endpoint data on 157 patients from our aligned <unk> lack of classic study at the upcoming 2023 American orthopedic foot and ankle society or <unk> conference in September .
Although the primary endpoint of this five year study is it two years, we now have a sizable number of patients demonstrating significant improvement in clinical and radiographic and patient reported outcomes at three years post procedure.
Building. Upon this later this year, we plan to submit our primary endpoint align <unk> manuscript for publication in a top tier peer reviewed foot and ankle journal.
This is an exciting milestone culmination of activities that began five years ago with the first patient enrolled in 2018.
Again, we believe the positive interim patient data coming from our differentiated align <unk> study resonates strongly with surgeon and patient communities and as reinforcing further market adoption of our lap of classy procedure.
I would also like to highlight that at the end of the second quarter, we acquired certain assets from bread point medical <unk>, adding FDA cleared patient specific instrumentation or tsi technologies and capabilities to our portfolio building upon our pioneering <unk> bunion correction and related Midfoot solutions.
This transaction is well aligned with our commercial strategy to increase investments in R&D to continually advance our core lap of passing of Dr. Plashy procedures, delivering an expanding portfolio of unique problem solving technologies for our customers, which are marketed through our direct bunion focused sales force.
We're excited about adding this technology platform, which is highly complementary to our core lap of passing of Dr. <unk> systems.
Finally, I'd like to note that CMS recently released its proposed 2020 for Medicare payment rates for hospital outpatient and ASC services to cover facility costs for surgical procedures, including supplies of implants used in the surgical case.
As a reminder, our products are used in procedures covered by specific well established CPT codes and we're pleased to report that the proposed 2020 for reimbursement rates for these codes are slated for low to mid single digit increases.
Assuming the proposed 2024 rates are finalized this will continue a multiyear trend of low to mid single digit increases in facility reimbursement rates for CPT codes associated with our procedures.
In closing I am proud of another great quarter of execution of trees with solid execution from our talented team of employees.
Our proven strategic investments supported by our strong balance sheet continue to drive our momentum on both the top and the bottom line.
We have a specialized and scalable business model, that's fueling our growth strategy and our mission to advance the standard of care and our surgical correction, a bunion and related mid foot deformities.
With that I'll now turn the call over to Mark to review our financial performance Mark.
Thank you John Good afternoon, everyone revenue in the second quarter was $42 million, an increase of $12 million and 40% growth over the prior year growth was driven by increases in procedure volumes and an increase in blended average selling price due to adoption of our newer complementary technologies.
As a reminder, we commercialized a lap of class a procedure nearly eight years ago and in the past two years alone. We've added 1089 active surgeons or about 42% of our total active surgeon base on average this growing number of active surgeons have steadily increased utilization each year.
Lack of classy, which we believe is due to positive patient outcomes and expanding indications in their practices.
We sold 6793 lap of Plassey procedure kits in the second quarter, a 30% increase versus the prior year second quarter blended.
Blended average selling price in the second quarter was $6176, an 8% increase over the second quarter in 2022.
This blended average selling price includes the contribution from lack of classy and from our expanding portfolio of complementary products such as our Doctor Plassey system try Tom and speed release instruments and fast pitch scroop kits as our expanding direct sales channel helps provide surgeons with our problem solving technologies as <unk>.
Ron mentioned earlier, we continue to anticipate strong year over year increases in our blended average selling price, but there could be some variability from quarter to quarter.
Gross margin was 81, 7% in the second quarter of 2023 compared to 82, 3% in the second quarter of 2020 to 60 basis point decrease was primarily due to changes in product mix and an increase in inventory provisions.
Total operating expenses were $47 3 million in the second quarter of 2023, which includes sales and marketing expenses of $33 8 million.
Research and development expenses of $3 5 million and general and administrative expenses of $10 million. This compares to total operating expenses of $36 6 million in the second quarter of 2022, which included sales and marketing expenses of $26 6 million.
Research and development expenses of $3 million, and general and administrative expenses of $7 million to.
The increase in operating expenses reflects strategic investments and our expanding direct sales channel investments in product innovation increased capacity requirements.
As well as support for other commercial initiatives.
Second quarter net loss was $12 3 million or <unk> 20 per share compared to a net loss of $17 2 million.
Or <unk> 31 per share for the same period of 2022.
Due to our continued focus on operating expense management and the scalability of our business, our adjusted EBITDA loss improved 20% in Q2 compared to the prior year.
We continue to expect modest adjusted EBITDA improvement this year.
Cash cash equivalents and marketable securities were $139 5 million as of June 32023. This represents a decrease during the second quarter of approximately $31 million, which primarily reflects the red point acquisition payments. We believe we have sufficient balance sheet strength and flexibility to continue.
New aggressively executing on our strategic investments and growth initiatives.
Before concluding let me turn to our outlook for full year 2023.
As John mentioned, we are encouraged by the underlying strength and momentum in our business and are raising full year 2023 revenue guidance to $191 million to $197 million, which reflects an increase of 35% to 39% over 2022 revenue.
This is an increase from our prior full year guidance of $190 million to $196 million.
To help you with modeling the back half of the year. We expect Q3 revenue will be roughly similar to Q2 due to seasonality and believe Q4 will be driven by typical <unk> seasonality tailwind new product launches, including speed play and the positive impact of the incremental sales rep hires that occurred in Q2 for these reasons we.
Believe Q4 will once again be our strongest quarter of the year.
Turning to the middle of the P&L, we expect that our operations that expenses will continue to grow throughout 2023, as we increase our DTC investments and further expand our direct sales force, while increasing leverage of our fixed costs and overhead expenses. Therefore, we still expect to show modest improvement in adjusted EBITDA for the full year.
Compared to 2022 with that let me turn the call over to the operator to open the line for your questions.
Thank you we will now conduct the question and answer session. As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced.
To withdraw your question. Please press star one again.
Please standby, while we compile the Q&A roster.
Okay.
Our first question is from Robbie Marcus with Jpmorgan. Please proceed with your question.
Okay.
Hi, This is actually Lili on for Robbie Thanks for taking the question, maybe if you could dig a little bit deeper into the guidance and the cadence commentary you just gave I think historically you've been a pasta John drew three Q over Q sequentially. So any reason why we shouldn't see a bigger step up into the third quarter.
This year.
Yes.
Great question. Thanks, Thanks for joining US let me let me take that this is mark hair.
First of all we again are really pleased with all the execution in the second quarter, we had 40% growth, which we're really pleased about.
And as we've mentioned on prior quarters, the orthopedic industry traditionally does experienced lower sales volumes.
In the third quarter as elective procedures generally declined during the summer months.
And as we've talked about in the past we're now at a scale, where this seasonality has become apparent to us and we feel very comfortable with that guidance range.
And.
As we've said in the past, we just want to be prudent with our guidance as we continue to execute execute on all of those commercial strategies that John has talked about.
Okay.
Got it got it that's helpful.
Just on ASP.
That stepped down a little.
Sequentially for the first time.
You're continuing to roll out new products.
So anything to call out there and how should we be thinking about asps trending from here.
That can continue to move higher as you expand the portfolio or are there any sort of headwind Brian . Thanks, a lot.
Yes, Hi, Lilly John here.
Yes, so we continue to anticipate strong year over year increases to continue with our blended ASP, but as we have discussed before you can see some variability in quarter to quarter based on mix and other factors.
We're continuing to see lift from our new plating systems, I guess foray in our expanding portfolio of complementary products like a Dr. Platt the speed release instruments fast pitch screws.
And some others and beyond that we've got a pretty robust pipeline of future product launches in the works, including our speed played implants coming towards the end of the year, which we believe will help continue to sustain.
Asps going up into the right over time.
A little color on on the <unk>.
Softer versus Q2 Q1 number.
We're really focused on penetrating this market in order to do that we need to ensure that our docs can get access to lap a classy wherever they operate even more.
Cost sensitive settings like an ASC.
And in Q1, we did add a new lap a classic kit configuration to our menu of offerings.
To allow our surgeon customers to get greater access in these more cost sensitive settings.
And we're really pleased with the success, we're seeing here, but it did put a little bit of a slight and what we believe to be a short term dampener on our Q2 blended ASP.
Got it thank you.
Thank you for your question.
Please standby, while we get our next question.
Our next question comes from drew Ranieri with Morgan Stanley . Please go ahead.
Please standby for our next question.
Our next question comes from Ryan Zimmerman with <unk>.
Alright.
Good evening, thanks for taking the questions and congrats on the progress.
I wanted to ask a little bit about the cadence of softer editions.
We saw this quarter.
John just to get your thoughts around kind of the pace at which you expect to educate and bring in physicians.
The lack of lastly users going forward.
Sure Ryan Thanks for the question.
Yes, we ended ended the quarter with 2581 active surgeons.
We feel really good about our annual progression of our new surgeon adds as we continue to onboard new reps make new relationships with doctors put those doctors through our training events.
Certain additions may vary from quarter to quarter.
For example, during the second quarter, we saw some surgeons and patients sort of prioritizing travel in time away from the office.
First one is just as you add new products to speed played the micro incision lack of Lassie system. You know one of the things that you've talked about is is the penetration of.
Yusuf say for example in the a doctor a plastic product right and how you could eventually get to maybe 15% you know of mid foot deformities, and you're not there yet and there's kind of a long right. Here you know runway there just to help us understand kind of how you think about the penetration rate of some of these newer products as they launch and where you'd be happy.
With kind of their adoption over time I mean.
You know I don't think it's reasonable to assume that 100 per cent of cases would use all of those products necessarily but what's the right way to think about kind of that adoption overtime and then I have an expense question for <unk>. Thank you.
Sure sure.
You know with things like go into a duct apply to specifically that mitford deformity effects about 30 per cent opinion patients.
Our customers tell us they could foresee at some point in time using it on half of those so 15% of their lap a classic cases.
We continue to train more doctors get them more comfortable with this procedure.
I asked one of the doctors at this Boston Labs.
Why are you here for him.
I've done a couple of duct apply to you don't want to I want to get more experience I think this is a breakthrough.
Operating on patients that are either used to have to refer or I would only do the bunion on and I knew it wasn't a comprehensive fixed so we see this gaining more and more traction.
And we have next generation of Dr Philosophy systems in the works.
Another catalyst there I think is going to be our speed play implant platform because that can be used in a dr. Plastic cases and inserted through some smaller incisions. It goes quicker and our current place and doctors are really really liking that and some of the free market cases, as a as a key application for fee place. So.
I would like to see us work our way towards at 15% over time I just can't tell you the exact pace at which it would it would occur.
Right.
Okay.
That's helpful and then.
Just <unk> go ahead go ahead, James Hello, Sorry, Jose speed play it could get could get significant traction as an overall platform pretty quickly. There is a lot of enthusiasm from the doctor community about that technology and the sales reps that have used that have a lot of customers, saying. This is the way I want to go for most of my patients. So we're.
Really excited about that platform coming on not only in its ability to make the procedure faster less steps, but bring on new customers that have look for different fixation options and maybe have an embrace lab apply because we don't offer something like speed place.
That's helpful and apologize for jumping the gun there.
Just last question for me.
Humpback in queue.
Mark.
Excuse me through your thought process, a little bit about balancing additions to BCC versus expense leverage and.
What.
How you're pushing and pulling on those two components and did you think about rampion head count or maybe slowing the pace of ramping head count versus maybe what you need to do in terms of further additions and increase you can do.
Thanks for taking the questions.
Thanks Ryan.
Great Great question, and it's something that John and I talk often about is what is what is the right mix of the DTC and the investments into our business and the overtime <unk>.
Profitability of the business and so I can tell you what we said in the past is our primary objectives right now it's to really execute on all of those commercials strategies that had been working for us and that is building the bigger direct sales channel and and.
Really helping patients be educated about the benefits of lack of Plas historic DTC platform and and so we'll continue to do those things we have an eye on profitability. We've talked about on this call and the prepared remarks and in the past that we want to have leverage this year compared to.
Last year and so we're still on track to do that.
Again, as we announced today that we had some really strong improvement from an EBITDA bottom line perspective. So we think we can do a little bit of both with the primary objective is to really execute on the top line and as John said, we really want to introduce products that are going to be helpful to our surgeons that are.
Going to be useful in bringing new surgeons too.
To become customers and to continue to drive our top line through more and more direct sales reps, who who really leverage our whole portfolio with with our serving customers.
Thank you thanks for taking questions. Congrats on was just sort of.
Thanks, Thanks Ryan.
Thank you as a reminder to ask a question. Please press star one line on your telephone.
To be announced please stand by while we get our next question.
Our next question comes from Richard <unk> with tourist Securities. Please proceed.
Hi, Thanks for taking our questions. This is actually <unk>.
To start out with guidance question it looked like.
Unit growth accelerated on an underlying basis.
With a lack of classy just with.
Coming up against a little bit easier as in workers comp and the second half vanilla little bit harder as G. Currently in.
The second half how should we think about the components.
Of growth.
<unk> is this is this level of.
Sustainable through the second half, we should we think about a little bit softer on IFC.
And I think there's a couple of questions with respect to Aspie I think John talked about that that we believe that we're offering these be very beneficial ancillary complimentary products and so that's going to fluctuate from time to time from quarter to quarter, but we think overall, we're going to continue to offer.
Products that are going to add to our overall blended ISP overtime. So that's going to continue to happen as we think about.
Really the cadence and the volume Q3 versus Q too.
I mentioned, a little bit there is some some seasonality that will that we do feel at this scale of business and so we feel really good about what guidance, we gave which is really consistent with the Q2 levels of volume.
So that's going to translate into very similar.
Unit volumes and blended espy as well so it's gonna be pretty consistent is the way we're thinking about Q3.
Okay and then just.
You mentioned that I think a.
<unk> for the AFC settings.
Wait a little bit on price just curious why should we should we expect that to be.
A more sustained impact on E S P going forward given.
Assuming curling next type of classy today, Nancy Thanks for taking my question.
Yes, Hi, Sam This is John I wouldn't say, it's gonna be a long lasting dampener, we tend to see whether we sign a GPO agreement they tend to be short term.
Dampener on our <unk> and then the new product.
Complementary product contribution starts to outweigh those dampener. So we're really pleased with the incremental uptake we got from that product.
I'd say you'd have a little bit to do with that strong kick.
<unk> volume <unk>.
<unk> number and.
It's a great thing to have in our in our menu of offerings.
Thank you.
Please stand by for next question.
Our next question comes from George Tellers with Stevens. Please go ahead.
Hi, This is Harrison on for George Congrats on the corner and thanks for taking the time and for taking my question.
I wanted to start on the two distinct sets of surgeons y'all have often talked about the.
On one hand, the ones, who primarily use osteotomy is to treat patients and.
Reserve the.
Lepidus fusion for the select few more severe cases, and the surgeons, who you know have more fully adopted lepidus fusion procedure I was wondering if you could.
Sort of parse out a little bit more and maybe quantify those searching populations in the mix of 10000.
Total and then if you could break out how penetrated.
At this point and both of those markets.
Yes, Hi, Harrison John I'll I'll.
I will try to clarify that a little bit you certainly have surgeons that had been through training programs that are more lapidus fusion centric as their.
Primary way of fixing the Bun and then you have the.
The majority of surgeons that had been educated through.
<unk> the osteotomy is for the majority of onions, and <unk> type procedures or for the minority to more severe.
Bunions.
I would say the majority are of the 10000 or in that latter group, where they view lapidus fusion is for the more severe than osteotomy as for the less severe so by numbers, but we make excellent inroads into both of those camps with our training programs in our products.
With a more lapidus centric surgeon.
Tend to embrace it pretty quickly for all of their procedures, just a better way to do a lot, but as of now the third plane a correction to what.
Prior to this was a two point correction so.
That camp embraces pretty quickly and then the other group we typically.
Get their next lapidus case, which might be a more severe deformity of a patient.
And then we work on them over time, and educate and they get more proficient with the procedure and they start to carve more and more into their osteotomy practice and do a higher overall.
Overall percentage of lap apply sees relative to their osteotomy overtime.
Got it. Thank you that that makes sense and then.
Hello up there I was I was wondering did did the did those sort of.
Search surgeon.
To those different types of surgeons do do your sales force.
Do they choose a specific.
A surgeon to go after or your.
Really just just trying to reach out to as many surgeons in there as possible.
Yeah, Great Great question, I mean, they certainly have data to help them.
Ascertained, who the busier surgeons are performing bindings and they they typically take that approach, but sometimes it can be a bit opportunistic.
We say with lap of Plassey, we're never selling asserted hard and trying to get a case, we're trying to get the surgeon to embrace our philosophy and once they have embraced our philosophy.
We can we can we can be very successful with them and getting them trained onboarded and getting them up that utilization curve.
But that's that's been the approach.
Understood. Thanks for thanks for taking my questions.
Thank you.
Please stand by for our next question.
Our final question comes from Rick lies with Stifel. Please go ahead.
At this time I'm showing you.
No further questions and I will now like to turn the conference back over to Julie Julie for closing remarks.
Thank you on behalf of treats medical thanks for joining US today. If you have any more follow up clutch questions. Please reach out and we look forward to talking to you. Following the close of our call for the third quarter of 2023. This concludes our call today. Thank you.
Thank you for participating you may now disconnect.
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