Q1 2024 Beyond Air Inc Earnings Call
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Yes.
Okay.
Good afternoon, and welcome everyone to the beyond Air financial results call for the fiscal quarter ended June 30th 2023 at this time all participants are in a listen only mode.
And answer session will follow the formal presentation and now I would like to turn the call over to Eduard Berger head of Investor Relations at beyond there. Please go ahead.
Thank you operator, good afternoon, everyone and thank you for joining us today.
Today after market close we issued a press release announcing the fiscal first quarter 2024 operational highlights and financial results.
A copy of this press release can be found on our website www dot beyond air Dot net under the news and events section.
Before we begin I would like to remind everyone that.
We've been making comments and various remarks about future expectations plans and prospects, which constitute forward looking statements for the purposes of the safe Harbor provisions under the private Securities Litigation Reform Act of 1095.
Beyond Air cautions that these forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated.
We encourage everyone to review the company's filings with the SEC, including without limitation. The company's most recent Form 10-K, and Form 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward looking statements.
Additionally, this conference call is being recorded and will be available for audio rebroadcast on our website www dot beyond their dot net.
Furthermore, the content of this conference call contains time sensitive information that is accurate only as of the date of the live broadcast August 10 2023.
<unk> undertakes no obligation to revise or update any statements to reflect events or circumstances. After the date of this call.
Joining me today on the call are Steve Lisi, Chairman and Chief Executive Officer.
Duncan Bakken, Chief commercial officer, and Douglas Larson Chief Financial Officer.
And with that I'll turn the call over to Steve Steve.
Thanks, Ed and good afternoon to everyone joining us today.
Since it's only been about six weeks from the last time, we spoke we will keep the prepared remarks short today lumpy.
<unk> ph continues to be well received in the market and we have begun phase two of the commercial launch.
We're very happy to report we have now in excess of $1 million in contracted annual revenue. So only a small portion of these revenues are recognized in the June quarter.
Continued to match our momentum in the marketplace with the thoughtful expansion of our commercial team.
Chief Commercial officer will discuss this further in a few minutes.
We provided a thorough review of our pipeline during the last call everything continues to be on track before turning the call over to Duncan I'll reiterate a few near term catalysts and highlights.
By the end of the calendar year, we expect to submit a PMA supplement to FDA for the lumpy ph cardiac label expansion.
Received CE Mark in the EU.
And present data from beyond cancer as a first in human trial.
Additionally, following agreement with FDA, we will be conducting a pilot study in viral community acquired pneumonia in the United States. This winter.
Now I'll turn the call over to our Chief commercial officer Duncan vacuum for an update on the lung fifth th commercial launch.
Thanks, Steve and good afternoon to our investors.
As Steve mentioned, we have eclipsed the $1 billion Mark signed annual contracts, we're very pleased with the momentum our team is building as we progress with phase two of our launch.
The overall feedback from hospitals regarding lung <unk> continues to be extremely positive and we would again like to thank all of our hospitals and clinical staff.
Partnered with us and committed to using our device.
Our plan is to build out our field team based on the opportunities develops over the past year.
And the growing interest in London, as we broaden our reach.
These additions will be carefully targeted and designed to ensure strong and sustainable foundation for growth.
We also expect to add to the team and in the anticipated cardiac label expansion, which we expect to significantly expand our reach in the hospital.
We have planned for a thoughtful and measured increase in the size of I've seen through to the approval of our next generation <unk>, which is anticipated in calendar year 2025.
In closing we are confident that <unk> is the best in class nitric oxide technology available today.
And we continue to be excited by the support we've received from hospitals throughout the U S.
I am looking forward to provide an update on progress in the upcoming quarters.
With that I will turn the call over to Doug Lawson.
<unk> financial officer to provide an overview of our financial results for the fiscal quarter ended June 30th 2023.
Doug.
Thanks, Duncan and good afternoon, everyone.
Our financial results for the fiscal quarter ended June 32023 are as follows.
Revenue for the fiscal quarter with zero point $1 million as compared with zero for the fiscal quarter ended June 32022.
Research and development expenses for the fiscal quarter ended June 32023 were $4 $7 million compared with $3 $2 million for the fiscal quarter ended June 32022.
The $1 $5 million increase was due to an increase in head count and incremental research mainly in cancer and autism.
SG&A expenses for the fiscal quarter were $10 9 million.
Compared with $8 $2 million for the fiscal quarter ended June 32022.
Almost all of the $2 7 million increase was due to salaries as additional head count as needed to scale operations in the field and in the back office.
Other income and expense for the fiscal quarter showed a zero point $8 million gain compared with a zero point $2 million loss for the fiscal quarter ended June 32022.
The gain this year was mainly driven by the re measurement of warrants and derivatives associated with our long term debt.
For the fiscal quarter ended June 32023, the company recorded a net loss of $15 1 million.
Of which $14 1 million or <unk> 45 per share was attributable to the shareholders of beyond Air Inc. Compared with a net loss of $10 9 million or <unk> 37, a share for the fiscal quarter ended June 32022.
Net cash used by the company, excluding onetime expenses was $10 $6 million during the fiscal quarter.
We forecast our average quarterly cash burn to be approximately $10 million per quarter as we move through fiscal 2024.
In June 2023 up to $40 million in debt financing was provided to the company by Avenue capital.
Of which $17 5 million in gross funds were drawn in the quarter.
As of June 32023, the company had cash cash equivalents and marketable securities of $57 million.
With that I'll hand, the call back to Steve.
Thanks, Doug we will now take any questions you may have.
If you would like to ask a question. Please press star one on your desktop telephone keypad now you will be placed in the queue. In the order received please be prepared to ask your question when prompted once again, if you'd like to ask a question. Please press star one on your phone now.
And our first question comes from Les Sulewski from sure with Securities. Please go ahead.
Okay.
Hi, good afternoon, Thanks for taking my questions and congrats on the progress guys.
Just to confirm the $1 million and now the annual base and then can.
Can you quantify the market opportunity out there that's been hanging over the remaining of this year do.
Do you have a sense of how many hospitals are out there in your end of contracts with a competing product.
Mark in your bulk for an opportunity to convert and I have a follow up.
Thanks, a lot I appreciate it so yeah.
Yeah, I guess, the $1 million as the base, but that would not be starting at the beginning of this fiscal year. So it wouldn't be a start from April one it would be a start from this quarter.
When we obviously signed the contracts to get us above that level. So I just wanted to be clear on that.
Yeah look I don't think that.
We're going to really reveal how many.
Hospitals were speaking to right now and.
And what it looks like for the rest of the fiscal year in terms of opportunities for us I don't think we want to share that information but.
I do think that we will be in a position when we report our next quarter in November to give you. Some some guidance on that and probably some guidance for our anticipated revenues for the full year.
Got it I understand and then on the cardiac label expansion.
Opportunity what size is that had potential to Tan line is essentially kind of calculate into your figures that you initially rolled out or is there more.
Our total story here, just kind of walk us through the high level overview of what you think of the cardiac cardiac label expansion. Thank you.
Okay. So cardiac surgeries nitric oxide used there it's the biggest of all the I guess subcategories for.
Use of nitric oxide in the hospital would be cardiac surgeries. So I think it's a very important.
To get this label expansion.
It will help us have access into an area that's exclusively now off label. So that's.
An area, where we don't market and we don't do we don't detail so.
That's certainly going to open things up.
Good way I would think.
Great. Thank you.
And our next question comes from Marie Thibault from <unk>. Please go ahead Murray.
Hi, good afternoon. Thank you for taking the questions now that we have revenue I want to try to understand.
You know how many contracts were signed how many hospitals now have lung fit ph.
Any details on contract value and length of some of these contracts with any additional detail you can offer at this time would be really helpful.
Sure Murray, probably not too much but most of the contracts are annual contracts.
Sometimes they they they renew for to you another year or three years, but we haven't said.
I don't think there's too many.
Too many contracts beyond three years out there, but there might be a few.
Not for us, but perhaps for others.
Again, we're not.
Really discussing the number of hospitals, we have there are multiple hospitals, there's plenty for us to get.
Plenty of feedback from our customers that they're very happy with our service and with the product but.
But we're not going to give an exact number I apologize for that.
I'm not really sure how much really more you want to say it is a competitive environment. So what kind of keep things close to the best if you can understand that there are other people listening.
Of course, Okay, and maybe I can ask about gross margins. It's not surprising of course that there are negative to start this early in the launch, but how do you think about that flipping positive, what's what's sort of the right level to think about for gross margins in those cogs in the first year for expansion. Thanks for taking my questions.
So this is Doug I can I can jump in with that one.
In the next in the next couple of quarters at least that gross margin is going to turn I'm going to turn positive.
The drivers behind that are actually the devices that we're producing we're starting to depreciate them. So theres some costs there for devices that aren't actually deployed yet.
And then setting up our supply chain infrastructure. So that we can expand across across the U S for wherever we have an opportunity.
So those are basically the fixed costs, if you will.
Are going to be absorbed very quickly as we expand so again my expectation is that.
Either next quarter or the following quarter will be in positive territory.
Thank you for that.
Okay.
And our next question comes from Scott Henry from Roth Capital. Please go ahead Scott.
Thank you and good afternoon.
A couple of questions.
First with regards to sell.
Selling expenses.
I guess, what would you estimate the quarterly selling expenses are today, and where would they be at peak just trying to get a sense of.
How much cost to market pay all the reps, how we should think about that number.
So Scott you know, they're there there is a.
There is a and.
An industry standard for a fully loaded rep. So I'm sure you know that you've been modeling this for a long time.
You know, we're we're certainly.
You know on the low end of things. We just started our second phase, where we're starting to bring more people in and hire them. So from a pure.
Head count, we're probably around 15.
15 people or so on the commercial side and growing and that number is probably going to get up you know well north of 50, you're probably close to 70 75 people at peak and that peak will probably be.
Two to three years from now depending on how quickly we bring people in so it's not going to be a very rapid expansion.
But I would say to use that industry average is a good number because not all of those people that I've mentioned and those numbers will be reps, but.
When we get out to peak the vast majority will be reps right now it's.
Much lower ratio for reps to others because.
We really need our clinical specialist the respiratory therapists are ones that are out there training.
About the hospitals that are working with US right. So we need to train in the beginning it's very important to have the customer service level very high and the reps will be expanded later.
Okay, Great. That's that's helpful.
And then the $57 million of cash.
How much of that is in beyond cancer, just so I get a sense of the net cash you have.
About.
30% or so about a third maybe.
Okay. Thank you.
Then.
When we think about this burn of kind of $10 million a quarter.
And at the same time, you'll be expanding sales.
Would it be safe to say this is this is kind of Uh huh.
The low point in and by low point I mean this is the.
Where the burn is going to Max out you probably as you add sales you'll also.
B, bringing in gross profit so I mean should we think about this being the maximum burn.
Decreasing you know maybe not this year, but soon thereafter.
Yes, and no Scott I mean, it does depend on what we do with our pipeline. So if we move into a pivotal study.
And you know in in calendar 'twenty, five whether that be for pneumonia or <unk> and T. M.
We're going to spend.
So that's going to cost money, but obviously it would be for very good reason.
We've done for pneumonia studies that have worked we're entering our fifth pneumonia study in a few months.
We would expect the number five to look just like the first four in terms of overall efficacy and safety profile. So.
With that kind of a <unk>.
Confidence going into a pivotal study, where we're going to spend money on it we don't know how big it will be yet we're still waiting.
To get this last study done and speak with the FDA, but.
I can't say that those costs wouldn't force us to spend more money than than $10 million in one quarter I, just don't know, but if we're not running a pivotal studies then yeah youre right.
Okay and that leads into kind of a bigger picture question.
For you and the board from the standpoint of is there any concern that you might cast too wide and that I mean, a lot of these programs are great, but it's the it's the working capital problem, a new business office spaces.
If you stretch yourself too thin.
There can be financial distress, okay. How do you how do you balance that I know you have a pretty good balance sheet right now, but you get a lot of good ideas.
Chasing right now.
Yes, Scott, we're not chasing them all that's for sure for that reason I mean, we're not we're not chasing COPD at the moment.
<unk> not until 'twenty five.
So we're we're not stretching I mean, we're almost two years away from an MTM stay starting in COPD is going to be based on.
Available funds, where we'd love to do it I mean, I'd love to do it in three months, but we can't.
This launch is the most important thing so.
The other programs like you know cancer is is funded it's we haven't entered into the real expensive part of cancer, yet we haven't gone into phase II human studies, which is where.
The big money will be spent that's another 25 occurrence most likely.
And in the autism program is.
There's not much being spent at the moment I'm, Matt It's still obviously in preclinical stage with our partner in Israel, So again that that expense.
Probably won't kick in heavy expenses won't kick in until 'twenty six 'twenty seven calendar so Ken.
Can we accelerate these things sure.
We have more cash or or <unk>.
Sales come in and we have a good gross profit then yes, we can but right now we're being very prudent in terms of.
Which programs, we're working on and how quickly we're pushing them. So right now pneumonia is full steam ahead.
And cancer in autism or moving but the other programs are not moving right now.
Just because you are right. We don't have the balance sheet to do everything that we want to do and it's not everything we wanted to I mean, it's everything that the data tells us to do right. Our MTM data are very strong.
Pneumonia very strong.
And with MTM in pneumonia being as strong as they are.
The question of why we're not doing the COPD study.
But again the answer is we're not funded to do that study. So we're just going to bide our time make sure that this launch is successful.
Or more successful it's already been successful.
And we'll see how that works out, but yeah, we're being very prudent with our cash Doug Doug doesn't like spending money.
He's a very good CFO E P.
Beats up everybody.
<unk>.
Okay, great. Thank you for the color on that I'll jump back into the queue. Thank you for taking the questions.
Okay.
And our next question comes from Jason Bednar from Piper Sandler. Please go ahead Jason.
Hey, good afternoon, thanks for taking my questions and congrats on reaching that $1 million milestone.
Maybe if I could start on some on the contracting so far and where we're going in the future.
Hum.
Totally understand Steve there's only so much you might be able to share but can.
Can you speak to whether the contract sizes are what you're expecting them to be so far.
Is there any difference in overall contract size you'd expect as maybe you move further down the road with phase two of your commercial plans.
Just anything you can share there.
I think that Theyre fairly in line with what we thought in.
In terms of overall size.
There's a mix right.
<unk>.
The volume at hospitals is a huge range and in the U S. You know you have hospitals doing.
1000 hours 500 hours 2000 hours of your hospital is doing.
50, plus thousand hours of nitric oxide a year or so.
It varies all over the place so I think.
It's in line with what we had expected.
And I would say the same thing about the pricing pretty much what we expected as well so right now we're not really seeing anything that.
That's outside of the parameters that we had entering into the market.
Alright, Thats, great to hear and then I'd be curious just maybe on the competitive response from some of your closest peers.
Just thinking given where you're at and where you maybe hope to be in a year or two I think.
Having some perspective today would be would be enlightening and just how are you seeing them behave as they start to lose contracts to you are they getting more aggressive in follow up contracting efforts are they holding the line on where they are pricing again, just curious how the success you're starting to have in contracting is influencing their behavior at all.
They've been aggressive from day one.
I think it's changed I think.
They are nervous.
They're worried.
That's how they're acting it's how they're behaving.
It might do the same thing if I were in their shoes, you know so.
I don't think that there's anything that they're doing that that again is surprising to us.
You know I would expect some of the things we're doing to be done.
I might not do everything they're doing but certainly some of the things theyre doing if I were in their shoes I would do but.
It's a competitive environment, there's no doubt about it.
And you would expect all.
All the players to do everything they can to.
Either keep customers or or take customers from from.
A competitor.
So I mean Dunkin' you're on the line if you have anything else to add to that you're a little closer than I am.
Sure and I. Appreciate the question I think that there's a couple of things I would say firstly.
A lot of the.
Competitive activity was apparent to us before we even started to get contracts a lot of the work that was done was to block us from even getting in the first place. So I think that what we've done is we've broken through in various locations.
Actually once people get exposure and do evaluations etcetera, then then things start to build.
<unk>.
He did.
The way these things work as they then start to see another hospital in the air.
Area.
Using the device and they get more confident and so the neighboring hospitals start to get in.
<unk>. The other thing that happens is that the initial contract soon as easy with individual hospitals theres not that many.
Of those nowadays.
<unk> groups and small networks take a little bit longer and we're starting to get to those now we're getting to that phase where a lot of those contracts are running now which wasn't the case at the beginning of a launch so it's a much better environment.
For us in other words competitors have thrown a lot of the.
Sort of ammunition at us already to stop us from getting in.
<unk> isn't that different so.
Feeling much more positive about where we are as we get through that process.
Alright, perfect. Thank you maybe one just quick clarifying.
Question to finish it off.
I think it seems like Theres no change on the CE, mark timing or expected timing on receiving that.
You know originally or last quarter, you had said September October timeframe.
Does that still hold I know youre, saying by the end of the calendar year, but or should we still expect it here within the next couple of months.
I would love to announce it on our next quarter that would be my goal.
This is this is out of our control.
Where we are.
Now moving as quickly as we can but again you know.
This is this is a regulatory matter and sometimes.
You know it just takes a little longer than you expect so.
I hope to announce it on our next quarter that that's my goal. So we will be like.
Second week of November roughly.
So I expect to announce it there if not.
I'll, let you know where I stand then but.
Yes, the guidance, we just gave our guidance based on.
Adhere told me, Steve we got to be consistent with guidance. This half that half instead of saying a month, so I'm going to go with Ed I will say by the end of the year, but hope to say it in November .
Alright very helpful. I appreciate it thanks guys.
And our next question comes from Matt Kaplan from Ladenburg Thalmann. Please go ahead Matt.
Hey, guys. Thanks, a lot for taking the questions.
I guess now that you're kind of in the phase of tiny contracts clean.
Maybe what would be helpful. Can you tell us a little bit about the mechanics of signing a contract is there for a demo period, a test drive periods men potential conversion to contract.
How does that work.
Yeah in the beginning Matt.
As you know.
Always a demo and then there is there is an evaluation.
I think that the evaluation is.
Not as important for every hospital anymore now that were out there in this experience and people chat to each other.
You know, it's a small world the RT world, there's lots of little conferences, they're all you know.
Meeting each other and talking about what's going on so I think that going.
Going forward, we may not need to do an evaluation at every potential customer and eventually we won't be doing evaluations at all I would say that probably.
Some time in calendar 'twenty four we wont be doing evaluations any longer it'll just be what we call bench testing and then.
Let me go into a contract so we're kind of.
You know.
Over that initial phase, where everybody was evaluating to the point, where some are still evaluating and some aren't and then eventually when it gets to the point, where there's just no more evaluations because theres so much experience with our product and so much comfort and confidence in us as a company being able to support.
The hospitals that they won't be no more need for that evaluation.
Okay, and then I guess now that you're in.
The second phase of the launch.
Do you see as the kind of bottleneck and signing new contracts.
Wow.
I'm going to let Duncan go on that one, but I would say I don't think there's one.
One specific bottleneck theres not one thing that stops you from getting.
Getting a contract I think it's you know.
Hospital specific they all have different things that are important to them.
Sometimes.
It hits, our sweet spot and other times it doesn't so I don't I don't.
It's so simple to say that every hospital has the same opinion or viewpoint our needs. So I don't think there's one bottleneck and then Duncan you might want to.
Follow up there.
No. It's a good question, Matt I think that.
<unk> during the first 12 months was definitely to the area. We have to spend most time navigating team because a lot of hospitals and our phone systems. As I described just now so the way they do that.
Bureaucracy associated with its definitely was initially our biggest.
Some challenge.
I do think of it like Domino's once you start.
Some of those hurdles then a lot of the others.
Become for you and then there are individual hospital situations.
Changing from one hospital one device to another involves an investment in training etcetera, so depending on where they are in particular.
Supply chain process, they might have other priorities within the hospital, the mean that they're not willing to focus on a particular category at the time, which is kind of related to construction, but also related to.
The hospitals.
Individual priorities from a clinical point of view.
Getting pushback clinically it's really.
More on the contracting side, where we have to navigate.
So that's really where most of our work.
Holden and improving.
Okay.
That's helpful and then average.
Average number of devices per hospital and the expectation for the average revenue per device, how should we think about that.
I'm not going to tell you to think about that Matt because then everybody else would know.
But you know.
Its pretty wide.
In terms of how many hours per year per system. A hospital uses it's a pretty big range different hospitals have different needs like I've said.
So it's a very difficult question to answer.
And I don't want any of our.
Competitors to know, how we think about that and how we view it because it is very important.
How we approach things so.
I wish I could give you those answers, but but I can't I mean, I can't name, but I won't.
Okay.
Just last question and as you're getting close to the CE Mark.
What's your partnering strategy ex U S or when do you plan to to to go it alone outside the us.
Well, we are not going it alone outside the U S. That's for sure.
We are it's enough to build up commercial team in the U S. That's all we can handle for the moment so.
We will partner ex U S and our goal is to get the best royalty rate we can.
Net sets and that's what we'll do so.
Hopefully.
We'll be able to talk more about that in the near future.
Okay, great well congrats on the progress thank you.
Thanks, Matt.
And our next question comes from Yale Jen from Laidlaw and company. Please go ahead yeah.
Good afternoon, and thanks for taking the questions and congrats on your first.
Commercial sales.
First question is in terms of the city.
<unk> 9000 revenue all up this quarter.
What's the accounting principle behind it and how was that being recognized and how we should think about going forward.
In terms of does this thing so principle apply.
Sure. So this is this is Doug thanks for the question.
So the best way to think about it is.
For the most part we're signing annual contracts.
Most of the contracts.
From a revenue recognition perspective.
I mean, it's a little more complicated, but I'm going to make it but if you think about it ratably over the life of the contract.
That's pretty safe I mean, we do have to do some testing every quarter to see if we're within the range of use of the machines and things like that but for the most part.
Annual contract Ratably over over the 12 months is how we're going to how we're going to recognize that revenue.
Okay, Great that's very helpful.
A question.
Just follow up on the previous one.
What's your view regarding getting.
Label on the cardiovascular side.
Question is that.
Now it's also has to be used in.
Well, we're off label, presumably get also get reimbursed.
For a long time so what.
Could be additional benefit.
Hey, guys.
Label.
For your assistance.
Well, yeah, I mean, the main benefits, obviously are our ability to directly market.
Two two cardiac surgeons.
As well as potential for reimbursement Theres no doubt, but you know it takes time to get a specific code show.
We wouldn't have a direct code day one.
There might be missed.
Miscellaneous codes of some sort, but a direct code would take several years as you know.
Brian was there any was there anything else you were looking for besides those two those are the two main benefits.
Okay.
Does that just just one confirm that.
Currently they used in the cardiovascular surgery.
We also get a reimbursable and not necessarily getting reimbursed.
Oh no. It is off label use they're theirs.
I can't speak for what the hospitals do but it is it is.
100% off label, so I think that reimbursement is difficult.
Okay, Great and maybe the last question here is in terms of your VC.
We see AEP trials that you intend to start at this.
Winter could you give us a little bit more color.
Regarding the study design and.
Endpoint and others.
How this one should be considered as a phase two maybe three.
Okay.
Categorize that.
Yes.
Yes, so I would look at the design of our study that we had in Israel.
For pneumonia, it's going to be.
Very similar.
To that study.
And.
This will not be a registration study. So we're device you know the amount of drug. So it's no phase 123 pilot pivotal so this will be.
Another pilot study FDA has requested that.
So after this study the next one would be a pivotal or registration studies. So this study then one more and we would hope to get approval.
From that.
And maybe just to refresh our memory in terms of the endpoint well, what's the endpoint that pursuing.
Any other color on the study yeah. So so obviously it'll be safety is the primary if it's not a pivotal study so that that that's easy but on the on the efficacy endpoints.
In the.
In this study in Israel, It was an oxygen specific endpoint.
Was a time.
Two oxygen cessation for these patients in and out of the hospital. So you can look for an endpoint similar to that something along the lines of you know.
Either how long their own auction or how.
Whatever time period, we pick how many hours they didn't need oxygen, but something along those lines will be related to oxygen again, when we did the infants in pneumonia.
There are no comorbidities. So it was easy to look at.
No.
Dish hospital discharge or being fit for hospital discharge those endpoints are not relevant.
Adult pneumonia as they have multiple comorbidities and it could be several other reasons. Besides the viral infection that caused the hospitalization for them to stay beyond the resolution of the pneumonia episode, So we need to measure something else and there will be some other endpoints. Besides action related but I think that is the <unk>.
One that we.
We'll be looking at closely.
And maybe just squeezing one one.
Does that endpoint could be considered.
Provable endpoint from Fda's perspective.
<unk> spoke with the agency in terms of this issue.
So this won't be a registration study so I can't say that.
The end points, we have in this study as secondaries would be considered the endpoint to be used in a registration study but.
You could guess that.
My team and I are not are not looking at this for no reason, where we're looking at this because this is what we.
We believe wood would be something similar to what would be in the pivotal study.
But there's no way for me to guarantee that there is an endpoint in my current study that would be mimicked for my pivotal hopefully it's close to it but we would still have to sit with FDA to agree upon what the exact primary endpoint would be in that study we haven't.
I agree to that yet and that's pretty standard.
But I think what we have is our secondary endpoints on the efficacy side is going to give us the answers we need to get an agreement with FDA on a primary endpoint.
I'm pretty confident that we're going to have something that will work.
Okay, Great. That's very helpful again, congrats on the for sale.
Thanks, so much yeah.
And at this time there are no further questions I'd like to turn the call turn the call back over to Steve to close out the call.
Thanks, everybody I appreciate your time look forward to talking to you in three months.
This concludes today's conference call. Thank you for attending.
The host has ended this call good.