AVITA Medical Inc. Q2 2023 Earnings Call
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Thank you operator, welcome to BD Medical second quarter 2023 earnings call before we begin let me remind you that this call will include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
These statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results to differ materially from any expectations expressed or implied by the forward looking statements.
He's review would be the medical <unk>, most recent filings with the SEC specifically the risk factors described within the Form 10-Q for the quarter ended June 32023 for additional information.
Any forward looking statements provided during this call are based on management's expectations as of today.
Medical's press release with second quarter 2023 results is available on our website www Dot Davita medical Dot com under the investors section a recording of today's call will be available on our website by five P. M Pacific time today.
Joining me on today's call are Jim Corbett, Chief Executive Officer, and David O'toole, Chief Financial Officer, I will now turn the call over to Jim for his comments.
Good afternoon, and thank you for joining us today.
I will begin today's call by discussing highlights for the second quarter.
Load by an update on 2023 priorities.
Following this update you will hear commentary on our financial performance from our new CFO David O'toole.
David is an accomplished financial executive with extensive experience in both public company operations and capital markets.
David most recently.
Served as the CFO of Opiate Pharmaceuticals, a biopharmaceutical company developing treatments for addiction, and drug overdose, which was acquired by <unk> in March of 2023. Please join me in walking welcoming David.
Now turning to the quarter, we had an extraordinary second quarter with two landmark FDA approvals and a pivotal FDA submission.
These approvals and submissions are critical to advancing our platform and will continue to enable us to unlock the growth potential of our beta medical I will discuss these in more detail later on this call.
In addition to our FDA successes, we continue to deliver strong financial results.
With commercial revenues of $11 7 million.
Which is a 42% increase over the same period in 2022.
And what's at the top end of our guidance of $10 7 million to $11 7 million.
This 42% growth.
Is an acceleration of our first quarter year over year growth of 40%.
Which itself was an acceleration of our fourth quarter year over year growth of 37%.
We have accomplished this with virtually no new burn center accounts, indicating increased adoption within our existing accounts.
As mentioned on prior calls our commercial revenue is comprised of two components.
U S revenue and foreign revenue.
Japan represents.
A majority of the foreign revenue line items.
With that overview of our recent performance, let's now move on to our 2023 priorities and activities that continue to transform our business.
On June seven we achieved a major milestone as we received FDA approval for the use of resell to treat full thickness skin defects.
Although we had a high level of confidence in the Fda's approval of the initial scope of the PMA supplement which was based on our pivotal study for soft tissue repair and reconstruction. The fda's approval represents a significantly broader label for resell than what we initially anticipated.
This label further validates the effectiveness of resale and opens up new treatment options.
To fully appreciate the indication for full thickness skin defects, we need to take a look back at the original soft tissue repair market.
When we submitted our PMA supplement for soft tissue repair and reconstruction.
We expect that the approval to cover traumatic wounds like deep loving and surgical wounds, such as Fasciotomy necrotizing fasciitis.
These wounds represent approximately 127000.
Eligible procedures across the U S trauma centers.
The expansion into trauma centers allows our commercial team to capture the remaining portion of the burn market that exists outside of our existing burn center served market.
Thus our initial target market of approximately 127000 eligible soft tissue repair procedures and $35 to eligible burn procedures represents a tam of over $1 2 billion.
As a reminder, this represents a six times increase of our existing burn center served market.
The FDA approval for full thickness skin defects includes these 127000 eligible procedures.
Less traumatic wounds like gunshot wounds and traumatic hematomas surgical wounds, such as muscle only flaps laparotomize chronic wounds that covered <unk> and V. L U non pressure ulcers and pressure ulcers and surgical excision of cancer.
These wounds represent at least 264000 eligible procedures is important to note that this market size is derived from third party claims and internal analysis based on skin grafts CPT codes tied to diagnosis codes of specific wound types.
Further as a soft tissue repair indication uses the same reimbursement coaches burns. So does the broadened label or full thickness skin defects.
In other words, our new FDA approval, our expanded indication has in hospital reimbursement through a DRG and outpatient reimbursement through a transitional pass through code.
Consequently.
On June eight.
The day after we received FDA approval initiate the commercial launch of full thickness skin defects and the additional eligible burn procedures with our expanded U S commercial organization.
For those new to the <unk> medical story.
Second quarter of 2023, we initiated the expansion plan of our commercial organization, which would more than double our original team of $32 70.
As previously noted this will result in a peak operating expense as a percent of revenue in Q3 2023.
However, I emphasize our contribution margin on a new commercial professional is breakeven with approximately five resale kits sold per month per individual.
Prior to this quarter the average productivity of a direct rep exceeds 2000 kits per month.
Last quarter I called this weaponized, our gross profit to enhanced market adoption and penetration where the salesforce pays for itself quickly.
Turning to the additional 264000 eligible procedures related to both thickness skin defects that I mentioned.
We have analyzed third party claims reports and conducted an internal analysis of these eligible procedures. Consequently, we are currently developing our strategic plans to pursue this significantly larger market.
Similar to full thickness skin defects, we expected a June FDA approval for vitiligo.
In line with the 180 day review period through the breakthrough device program.
We received approval of resell for the re pigmentation of stable Depigmented middle legal lesions on June 16th.
This approval represents a first in class treatment.
<unk> mutation through the delivery of normal healthy skin cells.
The approval was based on our pivotal trial for vitiligo, which met both safety and efficacy primary endpoints.
However, the study did not evaluate the mental health benefits and the reduction of derivatives healthcare costs associated with the treatment of vitiligo.
While <unk> is not contagious nor is it federal is an autoimmune disease patients with the highly visible chronic condition or a high prevalence of psychiatric issues, including body just morphia.
The mental health conditions, and the derivative cost of treatment are often high and without a cure and recur throughout the patient's lifetime.
For these reasons, we are conducting a post market study of 100 patients called tone, where we will seek to demonstrate both the re pigmentation and mental health benefits of vitiligo treatment by resell and the reduction of associated health care costs.
Following the completion of the six month study analysis.
We will pursue a commercial payer policy to do this we plan to combine the tone data.
With third party broadly developed economic cost of treating the Lego, which focus on the Cascade of mental health issues to demonstrate that treating vitiligo with resolve greatly reduces the lifetime health care costs of vitiligo.
It is our goal to secure reimbursement in 2025.
Now an update on <unk> <unk>.
Previously promised on June 30, we submitted a PMA supplement for you suck up which.
<unk> the FDA breakthrough device designation.
We sell go revolutionize the current manually operated resale device by eliminating the need for manual disaggregation of the autologous samples.
Automating the process of self disaggregation will substantially reduce training requirements, allowing us to leverage selling time more effectively.
Additionally, you will ease the burden of additional training required by physicians and operating room staff to manually perform disaggregation.
Which we predict will lead to increased adoption across our indications further amplifying our impact in transforming the lives of patients.
Moreover, <unk> is a critical component of our international strategy, which we will be discussing in more detail on our third quarter call.
As such we saw go is arguably the most significant enabler for our platform, which we believe will greatly accelerate our growth.
Lastly, given our June 30 submission under the breakthrough device program.
Submission will receive prioritized interactive review with an expected December 27 approval and subsequent launch on January <unk> 2024.
With respect to 2023 guidance for the third quarter of 2023, we expect commercial revenues to be between $13 million and $14 million at midpoint of this guidance. This reflects a growth rate of approximately 50% over the prior year.
To that end, we are increasing our 2023 annual revenue guidance from $49 million to $51 million.
Two.
$51 million $253 million, which at midpoint of guidance would reflect a 53% growth over 2022.
Looking ahead, our intent is to provide 2020 for guidance on our fourth quarter call in February 2024.
In closing we continue to execute the 2023 priorities, we have laid out and remain committed to delivering strong results with that I'd like to turn the call over to David.
Thank you Jim It is a pleasure to be here and be part of the beat our medical team and.
For the three months ended June 32023, our commercial revenue increased by 42% to $11 7 million.
<unk> to $8 2 million in the same period in 2022.
The increase in commercial revenue was largely driven by broader surgeon usage as well as deeper penetration, particularly within smaller burn procedures.
Along with commercial sales with our partner cosmetic and Japan.
Although our expanded commercial team was in place for the launch of full thickness skin detects on June eight there was no meaningful revenue attributable to the commercial expansion in the quarter.
We expect the expanded commercial team will begin to have an impact in the third quarter.
Gross profit margin was 81% compared to 83% in the same period in 2022.
The decline was primarily attributable to a decrease in product production and one month of the quarter caused by the need to qualify new vendors for certain manufacturing components.
However throughout the process of strengthening our supply chain, we maintained our perfect service level.
Since then we have resumed manufacturing volume to keep pace with our expected third and fourth quarter sales growth.
As we have emphasized previously approximately 50% of our product costs are fixed.
Tribute to both to the manufacturing facility.
Which means our gross margin will increase as product volume increases.
Further I would like to note that the decrease in gross margin for this quarter was unusual and we fully expect our third quarter margin to show an increase compared to the gross margin in the third quarter of last year.
Total operating expenses for the quarter were $21 2 million compared to $13 9 million in the same period in 2022.
The increase in operating expenses was primarily due to the costs related to the significant increase of our commercial organization in preparation of the both thickness skin defect launched during the quarter.
The additional sales and marketing cost included approximately $2 9 million in employee related expenses, including wages commissions and benefits.
One $4 million in seminars promotional cost and travel expenses for both the existing and expanded commercial team and 400000 and recruiting expenses.
In addition to the increased sales and marketing expenses noted research and development expenses increased by approximately $2 million due to the ongoing development of resale go and cost associated with our medical science liaison team.
As Jim noted previously the expansion of our Salesforce team will result in peak operating expenses as a percentage of revenue in Q3 2023.
Net loss in the quarter was $10 4 million or a loss of <unk> 41 per share.
Compared to a net loss of $6 3 million or a loss of 25 per share in the same period in 2022.
As of June 30, we had cash cash equivalents and marketable securities of approximately $68 8 million compared to $86 3 million as of December 31, 2022.
Before we open the lineup for questions I'd like to emphasize our increased revenue guidance for 2023 for.
For the third quarter, we expect commercial revenues to be between 13 and $14 million.
Additionally, we are increasing by $2 million, our annual revenue guidance for 2023 to now be in the range of $51 million to $53 million.
With that we thank you for your time and now I will turn the call back to the operator for your questions.
Yes.
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Our first question comes from the line of Joshua Jennings with TD Cowen.
Hi, good afternoon, Thanks, Jim Dave it's great to see the <unk>.
The approvals come in and the strong <unk> results and Dave Congratulations on that.
On the CFO seat at Davita.
Good morning, Josh Sorry, Tom Absolutely I wanted to just wanted to start off and just.
I think Jim you talked about the broader label that you secured for the soft tissue data.
Fantastic outcome.
You mentioned that you are potentially rethinking the commercial organization structure with many more indications opened up and anything you can build on that add on that just to help us understand how you or how are you.
We're thinking.
Yes, I think Thats a terrific question because.
It was the label indication is significantly broader than what we anticipated.
So what we're doing I think first and foremost to staying focused.
<unk>.
Previous understanding under the what we believe we'll see.
Soft tissue repair and reconstruction, which is 127000.
Procedure expansion.
For the time being we're staying REIT focused on that.
Because theres plenty there for us to grow and get the momentum we want in and build the underlying adoption on the other hand, there is a number of applications that come under full thickness skin defects that create a much bigger opportunity for us so rather than rush into.
Because we have no need to we're going to spend some time assessing.
So to speak.
Low hanging fruit so.
The lack of a better word.
And conduct some clinical research on some of some of these spots indications we have some that's anecdotal.
That all together and I think by the time Q4, which really is Q3. The November call comes around we'll have some of these.
New indications circled and will have a strategy about how to go about them. So it's really just great news. It just fills our pipeline we stay focused I think for us to try to.
Adjusted to final moment before launch.
Might cause us to defocus and be less effective.
And right now we've been rewarded.
By being a very focused organization about how we go about doing things. So look forward look forward to some more.
Insight as Q4.
Really Q3 call comes around.
Understood. Thanks for that and just I guess a strategy question I mean, just.
Just noticing that you are moving from a focus on burn centers to now cooperating.
Hospitals trauma centers outpatient setting is on the on the list and also potentially a physician office setting.
I mean is there an opportunity.
Not in the near term.
Front of you here in the short term, but over time to kind of build out the portfolio.
Look at some external business development opportunities. Thanks for taking my questions.
Yes, Josh Josh there is certainly as we are.
We're expanding immediately into into the trauma center world and that incorporates the burn centers as you know half of the burn centers are already <unk>.
One trauma centers. So it helped us get off to a fast start but it is in our <unk>.
One site so to speak.
There is technologies that are used with resell their used before and after resell that are very important to the physicians who are treating the patients that resell as applicable to.
We have.
I would describe as significant effort underway to identify some technologies that fit that category.
Some work underway to choose them and again I think that will.
Show some fruits of that labor by the November call. So it is a focus because.
No.
What we are we are a very consultative salesforce and as such the physicians interact with our sales team.
For our sales team to have some other technologies are applicable to their patients is a very common sense from a port.
Our portfolio of business models.
On a view and.
It will basically it costs very little to execute in terms of cost of sales because there'll be our same sales team. So I think your insight there is right on the money.
Alright, I appreciate those answers thanks chip.
Our next question comes from the line of Brooks O'neil with Lake Street capital markets.
Good afternoon.
I appreciate the comments you've made to Josh, but im curious if theres any color at all with regard to.
The response or any approach you've made the level, one and level two trauma centers and doctors to operate there.
Thanks Brooks.
It's on one hand early but on the other hand, we're six weeks in since we started it started our selling activity. What we are seeing is a.
Increased activity in all of the accounts that are outside burn centers and we are achieving.
Vac approvals and we're getting cases done and one of the reasons. We raised our guidance is because of that early momentum and.
And actually.
The consequence of our early preparation because when the approval came we were ready. So I think we're feeling quite bullish about the remainder of the year in 2004 ahead of us beyond that.
So without specifics.
The experience we're having.
Great and then I'm curious.
There's been Italy, some opportunity opened for you too.
Apply re sell to smaller burns in pediatric Burns.
Have you had any success in those areas so far.
Well, we have and it's a difficult thing to measure right because the hospital buys a resell kit, we don't get necessarily clear insight to who they use it on.
But we do get it in.
We do receive that feedback anecdotally and I think you can see it mostly on a macro level for us who have been growing actually faster against a larger base the last three quarters.
Without adding new accounts is very reflective of a penetration event going on with this with this technology resell. So we are getting we are getting those cases, it's difficult to quantify them because of what I just described but the macro numbers validate that there is just simply.
Increased adoption of resell overtime.
Great and then I just wanted to ask you one more and it really relates to your personal CGM about providing guidance.
In today's world. Some people are trying to sandbag and put out numbers that you can easily beat I.
I think you described.
Somewhat different approach of trying to build credibility, but could you just talk a little bit about how you view the provision of guidance for analysts and investors.
Of the indenture.
Yes.
Other important question.
<unk> I appreciate you asking.
We intend when we set guidance.
To hit the middle that is what we believe when we set it we are realistic and that is why we bracket. It. So in this case, we finished well ahead of them at $11 2 million would have been the middle we had a stronger end of the quarter.
Some of that is obviously reflected.
Three weeks of June we had the increased indications already and we were preparing so we have some early adoption that have contributed to that so my personal philosophy is to be within the range of guidance for sure perfection is a dollar over the middle.
Where we get the middle but we're on the upper side of it and.
The team said afterwards, so at the end of the quarter is that how do you feel quarter. When I said, we missed guidance.
We didn't get it quite right, we said it too low.
So the.
You should expect us to be within guidance.
The middle is our goal.
And that's how we think about it.
And it is about credibility I would like our investors and analysts who follow us to be able to depend on what we say and what we do and not believes that we're trying to play it easy.
We're here to grow this company.
And not to hold back about it so.
You will find the sandbagging.
Our practice.
That's great I am pretty excited about the opportunity you have so I look forward to seeing strong results in the back half of the year.
Thank you Brooks.
Our next question comes from the line of Matthew O'brien with Piper Sandler.
Hey can you guys hear me okay.
Very well, Matt How're you doing.
Okay. Thanks, Thanks for taking the question so Jim maybe the startup for you to follow up on Brexit question the guidance raise.
You just mentioned beating.
At the midpoint by about half a million dollars theyre, taking the guidance up by about $2 million in total so there's an extra $1 million bag in there roughly.
For the year and I'm just wondering.
You had expected <unk> to be in there it's not just <unk> in there, but what are you seeing that's giving you even more confidence in.
And the business and then is it a training thing or you're seeing a bunch of new centers. You can really point to that are coming on faster than you thought maybe you stop when we get into the Vac Committee, just a little bit more detail on why the guidance raise and what exactly youre seeing from a.
Enthusiasm perspective on soft tissue.
It's a multi dimensional question, Matt, but I'll, let me try and take you through my thinking process here.
First and foremost when we set original guidance, yes, we were expecting approval in June .
That said, despite having breakthrough device designation you don't know for sure.
<unk> got it till you got it although I was although we were quite confident as you know so that is one element.
The second element that led to that.
So therefore when it comes.
You can feel comfortable counting what you expect from it.
Now what reinforced that for US is we took the move as you recall in Q2.
To fully ramp up and trained the team.
And so when this.
Approval came on time.
Was actually <unk>.
No no space between the approval and are showing up promoting the full thickness skin defect.
Broader indication on the following day.
So when you combine those and then the <unk>.
Early response is very positive.
Again wanting to be <unk>.
<unk>.
It was very clear to us that our prospects were stronger.
And that is reflected in the increase in guidance.
Okay, just maybe just a little bit finer point on that Jim is there anything running ahead of schedule versus and I noticed you got the approval a little bit ahead of schedule, but like training center adds or anything along those lines.
Schedule, you can point to specifically.
I'd say most ahead of schedule definable element was having that team fully hired fully trained and in our market and our construct.
We certify a salesperson to be able to support a case.
And when June June 7th came.
Every new Rep was ready to do that so being fully prepared there is no ramp up youre right out in the field and I think thats the most.
Tangible thing I can point to.
Okay fair enough and I would love to get David involved here as well and again.
David Congrats on the new role.
Thank you you've been you bet <unk> been very clear as far as the spending goes in the back half of this year do we get to a point where there is leverage.
On the P&L in 'twenty, four or is it still going to be a deleveraging situation. As you are building. This market next year, and just talk maybe a little bit about your cash position and potential needs there. Thanks.
Yeah. So thank you for the question I appreciate it.
I'll take the second question first.
Around cash.
As of June 30, we have a solid balance sheet.
We've already indicated.
<unk> calls and discussions that we are in the process of developing our 2024 plan.
Which will include a number of.
Things that we will have to take into consideration as we move forward and that is we will be launching if it's approved resale go which will need additional working capital will need to build inventory.
For that we will also be looking at our strategy for vitiligo.
And we will have other working capital needs all of those will come out of our 2024 operating plan, which we will give more guidance in February .
Once we have that developed.
But I can tell you right now that we have a solid balance sheet.
As of June 30.
As far as as far as leverage.
We've talked about when we think a sales person.
Is.
Crosses over as far as paying for himself.
And that is himself or herself and that is when they are selling around five.
Five units per month.
And a fully trained sale.
Sales person is.
Is usually selling around 20 units per months.
As Jim indicated we were we hit the ground running on June seven.
And so we think that we're going to get leverage from those new salespeople quickly.
How quickly that will be.
Hard to say, it's still early days.
But as we move into 2024, you would expect that all of the sales field.
<unk> are selling at least enough to get to to cover what their costs are.
Perfect. Thanks, so much.
Our next question comes from the line of Ryan Zimmerman with BTG.
Good afternoon, thanks for taking the questions and congrats on the quarter, David Nice to speak with you.
So maybe just to start.
The margin guidance is encouraging, especially given the bounce back expectation in the back half of the year, but I'm just wondering David if you can kind of talk about maybe margins longer term.
We got resale go coming into the picture in 'twenty, four and just how you're thinking about margins.
Over the longer term.
Maybe trending towards the higher end of your guidance or potentially even above that.
As we think about gross margin.
Yes. Thank you for the question appreciate it.
Thanks for following us.
We've talked about this before and.
The biggest component of our cost of goods sold.
As the manufacturing facility that we have and it's fixed and it's 50% of our cost of goods sold.
It's not going to change as we move into resale go.
Within percentages, it's for the most part 50%.
So as we look forward.
And we've talked about this as our volume increases and we.
We would expect.
Our volume to increase over the next 18 months.
The sales force fully in the field.
And so as it's either for the ease of use product that we have now or the resell go cartridges that we will when it is approved.
In 2024 that volume as we look into 2020 for sure will increase.
And our margins should go up accordingly.
You will.
I will give more guidance in 2024 once we've developed our plan, but you can see a situation, where we would be approaching 90% margin as long as our volume our sales.
Are in line with what our expectations are.
Okay fair enough.
It's very excited I mean, those are those are fantastic margins and looking forward to it.
Thanks, Jim turning to the early launch and full thickness can defect.
Can you just share anecdotally given that you have been able to see early case adoption.
What specific cases.
Our doctors.
Most comfortable with.
Kind of.
If there's a trend in terms of utilization of this new <unk>.
Indication.
Where you're seeing success and then Conversely, where you may need to educate physicians about the potential in the latitude with which the label gives you.
For the new indication.
Yes.
Ryan that's a big question.
But let me give a shot.
First let me try and get specific.
We are having a.
Multiplying <unk>.
Over week effect of both new accounts being added.
And new Vac applications underway. So every week.
The numbers move meaningfully.
In this short time, we've had so that's a tangible way for me to speak about it.
The cases are still pretty broad because there is a lot of differentiation among them the ones the physicians.
So to speak capture most easily.
Or are the cases like <expletive> loving like necrotizing fasciitis.
Types of cases are very obvious resale cases, and they quickly gravitate to them.
So I don't have macro trends are numbers, yet on those because as you know it has been.
Just several weeks, but but but we see that they orange.
What's the right word.
They are quite aware of re so we've done.
Some market prep win.
During the time, because we had that salesforce was up principally in place and going through training and not promoting four.
In excess of four weeks on average before the launch so they had time to condition the market identify the high.
Grafting physicians, because you can do that through CPT analysis.
So.
The.
I think the bullishness that we feel is reflected in a.
We did finish at the high end of our guidance as you know.
I shoot for the Middle So high end is it means it went a little bit better than that.
I planned for and and the raising of guidance for the year.
I think reflect that as well.
Okay. Good good stuff working looking forward to seeing that play out.
Ed.
Thank you. Thank you.
Our next question comes from the line of Ross Osborne with Cantor Fitzgerald.
Hey, guys congrats on the quarter and thanks for taking my question. So maybe just circling back to the sales rep productivity just wanted to make sure.
I'm on the same page it's on a prior question you reply theres not really a ramp for our new sales reps to cover their cost.
In terms of hitting <unk> average productivity of about 20 kits for mob on do you think it will take for these new reps stay at that more efficient level.
It's a good question I have.
A different way to characterize that metric for you.
So the first element is not time base, it's just cost base.
So it takes five resale kits per month to cover the cost of the sales rep.
So once so we look at that as an investment.
So we hire sales rep, we know getting to five.
Everything after that becomes contribution margin to the rest of the business.
We do have a range of when that occurs it ranges.
As quickly as three or four months. It takes on some in some cases in a very brand new territory with no prior resell might take six months.
That's a range of when they get.
From cost breakeven to <unk>.
Contribution margin positive.
As far as the 'twenty referenced put it in context.
We have.
When we went to this expansion our average rep.
Exceeded 20 per month so.
That was shared to put in context.
That 5%. So once you get to five on your way to 'twenty and when you get to 'twenty. We're in really great shape. So what we expect is that this.
Wave of Salesforce hiring.
We'll be contribution margin positive.
Within the next four to six months.
Is that helpful to your question.
Yes, much more clear. Thank you very much for that and then one more if I may and parties were talked about.
A couple of calls but are you able to break out.
No, Japan, Australia, and U K I realize Japan is probably the highest contribution to revenue outside of the U S and if not would you be able to tell us what percentage of total revenue the U S accounted for.
Okay.
So in our international revenue, Japan is well over 90% of it.
What we do in Australia is.
Rather.
A strategic remnant.
From a few users who we've kept.
Supported and the same for Europe .
Now there is an international strategy coming in the November call, which will of course.
I don't want to say fourth quarter call because that's really the February call, but in November I have been guiding to so I think you can expect that our revenue for the year in Japan.
Bill.
We have no reason to.
Okay.
Express other than the current year to date run rate as a way to think about that revenue.
Got it.
Thanks, again for taking our questions and congrats on the quarter.
You bet. Thank you.
That concludes today's question and answer session.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
[music].
Okay.
Okay.