Q2 2023 Biodesix Inc Earnings Call
Yeah.
Good day and thank you for standing by welcome to the Bioplastics second quarter 2023 earnings conference call. At this time, all participants are in a listen only mode.
After the Speakers' presentation, there will be a question and answer session.
To ask a question. During this session you will need to press star one one on your telephone you will then hear an automated message advising that your hand is right to withdraw your question. Please press star one one again.
Please be advised that today's conference is over.
Be accorded.
I would now like to hand, the call over to Chris Frenzy of Investor Relations, Our first speaker for today's conference.
Please standby.
Thank you operator, and good afternoon, everyone. Thank you for joining us today for a discussion of Biodensity second quarter 2023 business highlights and financial results.
Leading the call today will be Scott Hutton, Chief Executive Officer, He will be joined by Robin Harper Kelly Chief Financial Officer.
After the prepared remarks, we will open the call for Q&A.
The audio recording and webcast replay for today's conference call will also be available online as detailed in the press release announcements for this call.
Today, we issued a press release announcing our business highlights and financial results for the second quarter 2023.
Copy of the release can be found on the Investor Relations page of the company website.
Actual events or results may differ materially from those projected as a result of changing market trends reduced demand and the competitive nature of <unk> industry.
Such forward looking statements and their implications involve known and unknown risks uncertainties and other factors that may cause actual results or performance to differ materially from those projected.
Forward looking statements discussed on this call are subject to other risks and uncertainties, including those discussed in the risk factors section and elsewhere in the Companys annual report on Form 10-K for the year ending December 31, 2022 filed with the Securities and Exchange Commission on March six 2023.
As well as subsequent quarterly reports on Form 10-Q filed during the 2023 as applicable additional information concerning factors that could cause results to differ materially from our forward. Looking statements are described in greater detail in the company's press release issued today and in the company's filings with the SEC.
I would now like to turn the call over to Scott Hutton, Chief Executive Officer Scott.
Thank you Chris.
<unk> is our patient centric mission driven lung disease diagnostics company.
With a mission to unite physicians patients and biopharma to transform the standard of care and improve outcomes with personalized diagnostics.
At <unk>, we've built a comprehensive portfolio of precision diagnostic test to support clinical decision, making across the lung cancer continuum of care.
Our core lung diagnostic testing portfolio ranges from initial risk assessment of lung nodules with notified lung testing to post cancer diagnosis treatment guidance and monitoring with IQ lung testing.
Notify lung consist of two blood based proteomics test notify CDP and notify XL too which are used by physicians to assess the risk of malignancy of a lung nodule.
IQ lung consist of three blood based test the Genesis Ret Mgs genomic test the agenda threat DD PCR targeted genomic tests and the ferrous scrap proteomics tests.
<unk> heard us options within IQ lung. These three tests are used to inform treatment decisions and monitor.
For the rise of resistance mutations while patients are on therapy.
All five of our core lung diagnostic tests are covered by Medicare and we believe we're the only diagnostics company with five on market test for lung cancer, all with Medicare coverage.
We've made significant strides.
And I'm thrilled with our overall performance in the quarter and the first half of the year.
We grew lung diagnostic test volumes and revenue.
Expanded our gross margin to low 70% ahead of our year end goal and reduced our operating expense and cash burn.
Our commitment to our cost disciplined approach, while growing and expanding the business continues to pay off and this quarter's results reinforced the team's progress and outstanding execution on our path to profitability.
In addition, we successfully completed a fundraising effort through a private placement raising $27 5 million in equity funding subsequent to quarter end to further support our growth and provide near term financial flexibility.
100% of the funds raised through this private placement where from insiders, including all board members. All section 16 officers and additional members of the leadership team, which continues to signify our confidence in the future of the company and the extraordinary value that we believe exist.
Time, and time again, our long term investors have demonstrated their steadfast support and unwavering commitment because they too believe in the biologics team and our goal to make a significant impact in the care of those patients with lung disease.
In the second quarter, we reported total revenue of $11 $9 million.
Which excluding noncore revenue from Covid represented growth of 48% compared to the same period a year ago.
The quarter was again highlighted by the impressive growth in our core lung diagnostic testing business, which generated revenue of $11 4 million.
Reflecting approximately 58% year over year growth.
We reported overall gross margins of 73% a significant improvement over the 64% gross margins reported in the second quarter of 2022, and the 65% gross margin reported in the first quarter of this year.
We are exceptionally pleased that our core loan diagnostic sales efforts continue to gain momentum during the second quarter as the number of tests delivered reached the highest in company history for the second consecutive quarter, increasing by 75% compared to the second quarter of 2022 and nearly matching the.
78% year over year growth, we saw in the first quarter.
The test volumes also represented 29% sequential increase over the first quarter of 2023.
This strong growth continues to be primarily driven by our notified lung testing volumes.
Our sales team continues to benefit from regular interaction with physicians and care teams and we are actively participating in an increasing number of peer to peer physician educational events. It.
It is worth noting that the positive momentum we witnessed throughout the second quarter has carried over into the start of the third quarter further reinforcing our satisfaction with the team's progress and performance.
To further support our clinical adoption and reimbursement we were pleased to have recently shared several updates on clinical studies that build upon and support the clinical utility of our notified lung and IQ lung testing strategies.
In May we presented original data in four separate poster presentations at the International Society for pharmaceutical and outcomes Research conference.
Providing evidence of the health economic benefit of the notify CDT and notify XL to test in the management of pulmonary nodules.
Most recently in July we were thrilled to share data from the prospective real World Oracle study and observational registry study to evaluate the performance of the notify <unk> test.
It is important to remember that demonstrating clinical utility is a critical steps necessary to drive the adoption of any diagnostic test and we're excited that the Oracle study successfully achieved its primary endpoint demonstrating a 74% reduction in unnecessary invasive procedures.
Overall, the findings from the Oracle study represent a significant advancement in the clinical evidence for use of the notify XL to test and nodule management.
In addition to the Oracle publication physicians from Beth Israel, Deaconess, Tulane University, and Einstein Medical Center published an independent third party Multicenter study demonstrating that the use of the notify XL to test resulted in a 73% reduction in the number of unnecessary <unk>.
Basic procedures conducted a benign nodules as compared to the control arm.
Looking ahead, we anticipate sharing additional data and updates on other studies, including our insight study assessing the clinical effectiveness of <unk>, our proprietary blood based proteomics immune profiling test at the upcoming International Association for the study of lung cancer World comp.
Prince on lung cancer being held in Singapore in September and additional abstracts at the annual chest meeting being held in Hawaii in October .
In addition to the growth in volumes driven by our sales team.
Rodney and reimbursement coverage remains an important part of our growth strategy in.
In July the Bioethics notify CVT test was awarded advanced diagnostic laboratory test or <unk> status by the center for Medicare and Medicaid services.
Receiving a DLT status is a major milestone for the <unk> team as this status is reserved for innovative test with Medicare coverage that provide clinical value and new diagnostic information that cannot be obtained from any other test or combination of test recognizing the unique utility of the note.
<unk> CTD test.
Now Bioethics has three test notify CDT notify <unk> and <unk>, all with ADL status.
We'll continue to expand and build upon our reimbursement coverage and expect to have additional updates in the second half of the year.
Moving onto our biopharmaceutical partnerships and services business in the second quarter, we reported revenue of $423000, which grew slightly over the first quarter, but it's still an area that continues to be impacted by delayed enrollment in clinical trials, we remain bullish on the biopharmaceutical.
Partnership and service business as we continue to have a strong backlog and incoming requests for proposals and we ended the quarter with $9 $3 million under contract, but not yet recognized.
While we're encouraged by the continued strength in the backlog we assumed the challenges our Biopharma partners are experiencing will remain for the next few quarters as projects slow and in some cases are delayed beyond the originally expected timelines.
I would emphasize this point before and cannot stress it enough.
Lung cancer is still the deadliest of all cancers as it claims more lives annually in the United States than the combined total of the next three deadliest cancers breast prostate and colon cancer.
Time is of the essence, when it comes to diagnosing and treating these patients.
Bioethics, we take great pride in our capability and capacity to discover develop and commercialize a wide range of test that deliver critical clinical results and insights to health care professionals and care teams swiftly.
We strive to offer the best testing turnaround times in the industry for all of our tests with the goal of improving patient outcomes.
Our company and team experienced a strong quarter and first half of the year we.
We maintain confidence in our ability to sustain this momentum driving continued growth in test volumes and revenue throughout the second half of the year and beyond.
Now, let me turn it over to Robyn to review the second quarter 2023 financial performance Robin.
Thanks Scott.
Second quarter total revenue was $11 9 million, an 8% increase over the prior year, including corporate revenue and a 48% increase over the prior year. Excluding Covid revenue was 3.0 million from Covid testing volumes in the second quarter of 2022.
<unk> lung diagnostic revenue in the second quarter with $11 4 million compared to $7 3 million for the second quarter of 2022, an increase of 58% over the prior year.
In the quarter, we recorded total lung diagnostic test volumes of approximately 9800 versus approximately 5600 for the second quarter of 2022, 75% increase.
The test volume growth was primarily driven by our notified nodule management lung testing, which includes notify <unk> and notify CDT.
The difference in growth rates between volumes and revenue was primarily driven by the timing of Medicare coverage for notify CDT achieved in the second quarter of 'twenty two.
Biopharmaceutical services revenue was 423000 in the quarter compared to 744000 in the second quarter of 2022 and 411000 in the first quarter of 'twenty three a decrease of 43% compared to the second quarter 2002, and an increase of 3% over the first quarter 'twenty three.
As a reminder, this business can fluctuate due to several factors, including contract timing and project execution, but in this instance reflects the continued delays of enrollment in prospective clinical trials to complete the projects and recognize revenue.
Scott mentioned, we ended the second quarter of 2023 with $9 3 million contracted but not yet recognized as revenue. These dollars are tied to multiple agreements with different timelines and will be recognized as these projects are executed.
Gross margin percentage in the second quarter, 2023 was 73% versus 64% in the prior year quarter and 65% in the first quarter of 2023.
Current gross margin trends reflect the growth in our higher gross margin lung diagnostic testing business.
So completion of projects to decrease cost and optimize testing workflows and cessation of commercial COVID-19 testing.
This margin achievement is ahead of plan and we anticipate maintaining margins in the low seventies going forward.
Overall operating expense, excluding direct costs and expenses was $19 6 million in the second quarter 23, compared to $18 6 million for the same period of 2022.
And $22 3 million in the first quarter of 2023 <unk>.
The increase versus last year is primarily from increased sales and marketing expense from increased travel related costs due to the return to pre pandemic level access to physicians.
And increases in other non employee related costs.
The decrease as compared to the first quarter is related to the realization of savings from our prioritization of projects that are expected to result in near term revenue and the delay of longer term projects.
Operating expense for the second quarter 2023 includes $1 1 million in noncash stock compensation expense as compared to $1 4 million during the second quarter 2022, and $2 3 million in the first quarter of 2023.
Net loss for the second quarter, 2023 was $13 4 million compared to a $15 8 million net loss for the same period of 2022.
And $18 7 million for the.
The first quarter of 2023, driven partially by the improvement in gross margin and operating expenses the.
The decrease in net loss for the quarter included a decrease in noncash stock based compensation.
The absence of a onetime loss on extinguishment in the year ago quarter of $3 zero million, resulting from the restructuring of the contingent consideration agreement with integrated diagnostics.
Set by an increase in interest expense, primarily associated with the perceptive term loan facility.
If we remove the 800000 from depreciation and amortization $1 1 million from stock based compensation and $2 4 million and interest expense the loss for the second quarter was $9 1 million as compared to $13 2 million when making the comparable adjustments to first quarter of 2023, a decrease of <unk> 31 per.
<unk>.
We ended the quarter was $17 4 million in unrestricted cash and cash equivalents as compared to $25 3 million in unrestricted cash and cash equivalents at the end of the first quarter a decrease of $7 9 million, which included the scheduled milestone payments of $2 3 million paid in April 2023 to.
<unk> diagnostics.
Change in working capital and also includes $5 8 million in tenant improvement dollars offset by $6 2 million in investment in the new facility.
The cash burn decreased from $17 8 million in the first quarter 2023, as a result of our commitment to our cost disciplined approach in growing the business.
The cash balance as of June 32023 does not include the $27 5 million raised in the private placement previously discussed which was completed subsequent to quarter end.
In the upcoming fourth quarter, we expect to move into our new state of the art facility in Lewisville, Colorado, just down the road from our current Boulder location. The new facility has improved capacity for lung diagnostic testing biopharmaceutical services testing and collection kit manufacturing, which we brought in house in 2022.
During the construction of a new facility materials and equipment were incorporated to optimize energy efficiency and reduce emissions advancing some of our longer term ESG goals.
We remain focused on two major goals growing our revenue by helping more physicians treat more patients than ever before and making sequential progress on our path to profitability second.
Second quarter results showed our progress and success towards both of those goals and we are maintaining the guidance provided earlier this year, our full year 2023 revenue of $52 million to $55 million. Our guidance assumes continued strong year over year growth in our core long diagnostic testing business broader reimbursement.
Of our five on market tests as well as modest expected growth in our biopharmaceutical services business now, let me turn it back to Scott Scott.
Thanks Robyn.
In closing I want to express my gratitude to all of the incredible members of the <unk> team, who have shown unwavering belief in and dedication to our mission vision and culture.
Our collective commitment and daily contributions are centered around making a positive impact on the lives of patients and I am truly thankful for your efforts.
We have again experienced remarkable double digit growth in the past quarter attributed to the exceptional performance of our loan focused sales team, who have been instrumental and fueling our growth and success.
We've published critical clinical data that demonstrates the utility of our test supporting both physician and payer adoption and achieved a major reimbursement milestone.
Additionally, we've improved our already strong gross margins ahead of plan.
Looking ahead, our focus remains on driving near term revenue growth, while maintaining a disciplined approach and reducing expenses and cash burn by aligning these strategic priorities. We are confident in our ability to sustain our growth trajectory make progress on our path to profitability and delivered value to our shareholders.
We look forward to moving into our new state of the art facility that affords us the opportunity to maintain our growth and expand in an efficient and effective manner.
Once again I extend my sincere appreciation to each and every member of the biotech team for your invaluable contributions to our success together.
Together, we're making a real difference and positively impacting physicians and the patients they treat.
Robin the bioethics team and I are as excited as we've ever been about the future of bioethics and the opportunities that lie ahead.
With that I'll turn the call over to the operator for questions.
Thank you we will now conduct a 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 one again please.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of Andrew Rachman. Your line is now open.
Hey, everyone. This is Maggie buoy on today for Andrew Thanks for taking our question.
First to start on the guidance for the year I know you reiterated your topline outlook today can you talk about kind of the pacing for the third and fourth quarter within these assumption maybe both on the core lung diagnostic side and then the Biopharma services.
Yeah, Hi, Maggie thanks for thanks for hopping on.
We haven't seen we don't expect any real change in the pacing for the quarters, we still expect it to look sort of like what we saw last year.
With a step up in the third quarter and then a further step up in the fourth.
With our Biopharma services.
That one is the one that is more.
More difficult to predict it's very lumpy.
We've seen great interest coming into the company more requests for proposal than ever before.
Just things are slow and sort of delay so.
On that one.
I hope to see some good uptick in the.
In the second half of the year, but put.
More.
More strength and more emphasis on the lung nodule managed mint and lung diagnostics portion of the revenue.
Got it that makes sense.
And maybe just one on volume growth on that core alongside so you've now had two really strong quarters of growth in a row can you maybe break apart that growth and talk about how much of it's being driven by greater existing account utilization or even new account utilization or any other geography here. Thank you.
Yes. Thank you Maggie this is Scott I appreciate the question.
Yes, as we stated before we've had an experienced great interest and adoption really across all Pulmonology groups, which also includes kind of community rural and academic.
So we continue to see growth across all segments.
Think that the Oracle publication will continue to increase that and we're exceptionally pleased with the sales rep access so for us there.
There is not one specialty within the Pulmonology group, where we're seeing greater or less adoption. It really is equal and I think it speaks volumes about the clinical utility, which was also supported an oracle, where we demonstrated a 74% reduction in unnecessary invasive procedures.
Great. Thanks, so much.
Thank you Maggie.
Thank you please standby for our next question.
Okay.
Thank you. Our next question comes from the line of Kyle Mixon of Canaccord Genuity. Your line is now open.
Great Hey, guys. Thanks for taking my questions. Congrats on the quarter. So similar line of thoughts.
75% growth year over year for test volume.
But could you just parse out how much of that Scott is from.
Recurring sort of like stickiness, among clinicians and reordering I think about like an interesting dynamic that just.
This is like such outsized growth it seems like it's a lot of like inorganic almost but a lot of your test of it on the market for a while and have Medicare coverage for years. So.
If you could just double click on that would be kind of good to hear.
Yes, Thanks, guys I appreciate the question Yeah, we haven't disclosed that metric obviously, we track that closely what I'm comfortable sharing today is that we've been pleased.
Really with that stickiness in that reorder rate and we've seen that not only stay kind of consistently strong but grow over time, which is what you want right as as an individual physician or health care practice gains experience.
Hope they see the greater value in the clinical utility of the test and Thats.
<unk> with what we've seen as we've tracked this overtime.
One of the other metrics, we've looked at and again, we don't we don't share the actual results.
<unk> is as somebody onboard and begun begins ordering the test and applying those.
Test results at what point in time do they become sticky and so for US we really we.
We expect to get into that 10% to 20 tests per account are physician range and then we go in and and we focus on what we call kind of a clinical utility review with them to make certain that they understand how each test result, but not only impacted that individual patient, but potentially chi.
<unk> their approach and so that's resonated for us over time, but it's a great question. It is critically important to us and we see it equal value and not only getting ordering physicians to continue to order and continued order more but also for our sales professionals to go out and open new accounts.
Okay that was great Scott thanks for that and.
So the nodule management side of the business continues to really drive a lot of this growth here.
I'm just curious the other side versus Rochester, IP driven guidance can you talk about like the competitive dynamics that are happening in that market and then maybe like your penetration and how that has been progressing so because we don't really hear about it as much on these calls.
Yes, no it's a good point.
The IQ loan portion of our of our test, which includes <unk> <unk> <unk> DD Pcr.
Gender strat portion is our genomic offering.
We see and received great value and feedback in offering both a broad based NGF panel and the targeted DD PCR panel I think where the greatest value is on the on the targeted panel is turnaround time right getting the physician those genetic results that they need and less than 36 hours.
That's critical especially early stage disease before you prescribed treatment.
We introduced as you said the <unk> test more recently and we felt like that complemented the DD Pcr tests.
Are the only company out there offering both in that clinical setting, but again I think part of our reach limitations are based upon focusing specifically on lung cancer, So where the Ngls test has a broader application our sales professionals have stayed kind of focused on.
<unk> lung cancer, and so we know that we arent expecting to hit.
Significant.
Competitive conversions and drive up that market share lift on the NGL front for us it's more about being that trusted consultative sales company that physicians go to for the answers they need in lung disease and lung cancer.
Perfect and on the gross margin.
This is great to see the 73% low 70%.
I'm already kind of approaching the mid seventies.
Sounds like we should expect low seventeens going forward. So that is helpful guidance I guess just to model out.
I was just curious how the kind of tempered biopharma revenue.
He is going to impact gross margins going forward to I know, it's probably somewhat uncertain and hard to predict but I was just curious if you guys could you just comment on that yes.
Yes, it's a great question and I think you think you've kind of answered. It. It is uncertain because we did state that we've got $9 $3 million under contract, we're able to forecast and plan accordingly.
And we have taken that into account so when we state that we fully expect to stay in that low 70% range, that's inclusive of the biopharmaceutical.
The agreements that we currently have in place now as that is our biopharmaceutical.
<unk> is out there trying to get more contracts that can obviously change in shift, but we don't see that directionally negatively impacting gross margins in the near future.
Awesome and then just a final one from me.
Robin you talked about the you guys are moving into a new facility is there any capex implications from that or is that already kind of built out and everything.
Yes, there is.
So we.
<unk>.
Have still have some tenant improvement dollars that we expect to exhaust here in the third quarter and then there'll be some capex in the third quarter and fourth quarter.
We move towards the end of the well at the end of the year.
And we will be live in the new labs.
Elaborate Tory and facility for.
For 2024 so.
Not performing test in the new facility until the new year.
So we would expect to see.
<unk> Capex.
And third and fourth quarter like we've seen in first and second.
So there wouldn't be like a step up.
Berlin.
No step up in the amount of Capex, but a step down in the tenant improvement dollars that come in so we will exhaust that here in the third quarter and then.
The final amount will be all out of pocket capex.
That's interesting thanks, Robyn Thank you Scott Congrats guys.
Thank you Kyle.
Thank you please standby for our last question.
Our last question comes from the line of Paul Hotspot of Morgan Stanley . Your line is now open.
Hello. This is Hugo on the call for <unk>. Thank you for taking our question.
Yes.
Following up on some of the Biopharma business comments here.
Could you comment on how delays from prospective clinical trial enrollment and sample delivery has trended over the course of the quarter and into July .
Also could you provide a degree of customer concentration for the $9 3 million under contract.
Hi, Hugo Thanks for the question.
Yeah, when do we think about the trends.
One of the things that we have found.
Encouraging and we're excited about is we have seen access to retrospective samples and prospective trial enrollment increase in pick up and so we've been watching that closely over time and really been waiting for that the nice thing about having the significant amount of dollars under contract that we have.
Half is knowing that it really comes back to to access timing and cadence and so we feel like there is movement and progress there.
And that's encouraging for US we've also seen a record number of requests for proposal moving forward and so we feel like we're in a really really strong position when we break down those requests for proposals and the $9 3 million currently under contract we haven't really.
Disclosed what the tests are.
We offer all of our commercial test as part of our biopharmaceutical offering and then we offer a number of additional test.
Both tests that we have created an offer for our UO youth.
And just you have chosen to not commercialized, but also we offer custom assay development and so it really is a broad spectrum of different projects in test or assays that we're offering and the biopharmaceutical partners are really coming to us at various stages of their own development and research. So we feel.
We're fairly balanced.
Were also balanced I would say across size.
The biopharmaceutical companies, where we've got some small biopharmaceutical companies coming in along with some of the major more significant names that everybody might know.
Is that helpful. Hugo Yes that was great. Thank you so much Scott.
Also with the upcoming chest conference presentation.
Presentation and presence do you anticipate to have there.
The conference that you are historically been present that and then is it possible that we could see interim data from altitude that Jeff.
Yes, great question.
We look towards towards the annual chest meeting as one of the biggest opportunities for us.
If youre not familiar with it it's the largest Pulmonology Society physician Society conference on an annual basis, usually held in October and November . This year's meetings has been pulled up so it's early October .
We're not yet able to disclose exactly what will be presented and published as a number of the items that we've already had accepted are embargoed until we get closer to the event and we've got a number of other efforts that are still in the works.
We put a lot of pressure on ourselves to make certain that we show up.
Representing who we are and so we think this chest will be equally as impactful as the last where we have an opportunity to get in front of a number of pulmonologist with.
And ever increasing book of data and so we're excited about that getting the Oracle data out now when we could give them more time to digest it to research it on their own and so we fully expect to have great robust conversation there.
And then the second part, yes, I was just going to say.
Sorry go ahead yugo.
No no no go ahead.
Yes, so for us when we look towards interim data on altitude. It really is going to be based upon enrollment we're very pleased with enrollment.
We've had a number of back to back months with record number of enrollment so.
I don't expect to have in term data or analysis that we'd be sharing at chest, because we would already be doing that analysis I think as we get closer to the end of the year, we will look at that and maybe do an interim analysis share sooner in the year next year not waiting for.
Chest.
But it is critically important for us we know that prospective randomized trial in this space is significant more excited to get that data out there and we're really proud to be working with the number of major academic institutions that we are on that study.
Great. Thank you so much for the color.
Yes, Thank you Hugo.
Thank you for your question.
Now concludes our question and answer session I would now like to pass the call back over to Scott Hutton, Chief Executive Officer for <unk> for closing remarks.
Thank you operator, we've worked long and hard to build the best Pulmonology focused sales team in diagnostics and I think thats just the beginning of our growth.
With a first mover status in lung nodule management, and an ever increasing body of robust clinical data were eager to provide updates on our progress and how we continue to build on the momentum already created.
As we increase our clinical data and payer adoption in this extremely large market opportunity Ulf.
Ultimately, it's all about physicians and the patients they treat and we believe in our ability to make a more significant impact in the future.
Our research development and laboratory teams are continuously delivering on operational improvements and cost savings maintaining a high level of compliance and positively impacting our already strong gross margins, while exceeding our standard of best in class operations as evidenced by our unmatched turnaround times on.
Test result delivery.
We have prioritized a quality focused <unk> team and culture and trust that our cost discipline approach and result in reduction in operating expense and cash burn will provide greater clarity and assurance around our path to profitability.
We look forward to updating you on our continued progress and successes on the next earnings call and hosting you in our new state of the art and highly accredited facility soon thank you.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
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