Q4 2024 Inogen Inc Earnings Call
If anyone has difficulty hearing the conference. Please press star zero for operator assistance as a reminder, this conference is being recorded today February 25 2025.
Kevin Smith: I would now like to turn the call over to Ryan Peterson Investor Relations. Thank you all for participating in today's call. Chinese me are president and CEO, Kevin Smith N C F L. Mike Park.
Kevin Smith: Earlier today <unk> released financial results for the fourth quarter and full year 2020 for the earnings release is available in the Investor Relations section of the Companys website, along with a supplemental financial package as a reminder, the information presented today will include forward looking.
Kevin Smith: Including without limitation statements about our growth prospects and strategy for 2025 and beyond expectations related to our financial results for the first quarter and full year 2025 progress of our strategic initiatives, including innovation, our expectations regarding the market for.
Kevin Smith: Our products.
Kevin Smith: And our business and supply and demand for our products in both the short term and long term.
Kevin Smith: The forward looking statements in this call are based on information currently available to US as of today's date February 25 2025.
Kevin Smith: These forward looking statements are only predictions and involve risks and uncertainties that are set forth in more detail in our most recent periodic reports filed with the Securities and Exchange Commission.
Kevin Smith: Actual results may vary and we disclaim any obligations to update these forward looking statements, except as may be required by law. During the call. We will also present certain financial information on a non-GAAP basis management believes that non-GAAP financial measures taken in conjunction with U S.
Kevin Smith: GAAP financial measures provide useful information for both management and investors by excluding certain noncash items and other expenses that are not indicative of <unk> core operating results management uses non-GAAP measures internally to understand manage any.
Kevin Smith: Valuate or a business and make operating decisions.
Speaker Change: Reconciliations between U S GAAP and non-GAAP results are presented in tables within our earnings release with that I will turn the call over to <unk>, President and CEO Kevin.
Speaker Change: Good afternoon, and thank you for joining our fourth quarter 2024 conference call. During today's call I will review, our fourth quarter and full year performance and provide an update on our progress towards our three strategic priorities driving topline growth advancing our path to profitability and expanding our innovation pipeline.
Mike: And then turn the line to Mike for a full review of our financials and outlook.
Mike: 2024 was your progress antigen, we made significant steps forward on our strategic initiatives. We returned our company to growth advance toward profitability. Once the latest POC the ROE for and received FDA clearance for the semiotics device in the United States.
Mike: Before I share more on our 2024 achievements I'd like to highlight an exciting recent announcement, our collaboration and investment from UL Medical a leader in the global respiratory care market. We entered into this collaboration in January 2025, as part of the agreement you all would distribute inogen portable oxygen concentrators under the <unk>.
Mike: <unk> brand in China.
Mike: Expediting, our entry into the large and fast growing Chinese respiratory market in.
Mike: In addition, we will distribute their stationary oxygen concentrator is under the <unk> brand in the United States.
Mike: We are happy to announce the transaction closed on February 21, 2025, alongside our commercial collaborations and wholly owned subsidiary of UL invested approximately $27 million in energen, representing a nine 9% ownership stake.
Mike: This is valuable additional capital for our use in support of our growth objectives.
Mike: Overtime, we believe this collaboration and investment will allow us to broaden our product portfolio and meaningfully expand our global reach in support of long term growth and profitability.
Mike: Turning back to our 2024 accomplishments for the full year, we delivered over 335 million in revenue, representing six 4% growth over the prior year and the fourth quarter, we achieved over $80 million in revenue, reflecting five 5% year over year growth.
Mike: Our growth in both time periods was primarily driven by our business to business channels, where we continue to make progress with current and new customers. This was somewhat offset by pressure in our DTC channel related to our downsized salesforce improving the performance of our DTC channel remains a key focus going forward and I am confident that we.
Mike: We are well positioned to return to continue to grow in the next one to two years.
Mike: Now shifting to our second strategic objective advancing efforts to reach sustained profitability, where we have made significant steps forward.
Mike: In 2024, we were able to generate two quarters of adjusted EBITDA profitability and product of commercial execution and operational delegates.
Mike: In 2025, we expect to continue driving growth in our organization, while carefully managing spend Mike will detail our financial outlook later in the call, but we expect improved adjusted EBITDA in 2025 relative to 2020 for these.
Mike: These improvements will be driven by organic efforts and supported by our U L collaborations.
Mike: Finally, I would like to share updates on our innovation pipeline.
Mike: In December we received FDA five 10-K clearance for a semi ox airway clearance device. This milestone marks the culmination of the significant effort by our clinical and regulatory teams.
Mike: Our focus has now turned to pursuing reimbursement for the device in the United States and we are planning a limited launch in targeted U S sites in 2025.
Mike: As a reminder, semiotics expands our product portfolio to include patients suffering from lung diseases associated with mucous hypersecretion and retention such as bronchiectasis, COPD and cystic fibrosis.
Mike: <unk> provides a more mobile and less time consuming alternative to traditional best based therapies and we believe offers a significant improvements over the current standard of care.
Mike: <unk> also represents a sizeable commercial opportunity for us by expanding the addressable patient population for our devices with limited commercial investment.
Mike: They access the same call point as our existing Poc's and has the potential of being sold through each of our commercial channels without investment in the new sales force.
Mike: Additionally, we intend to commercialize semiotics during the initial capital sale, followed by ongoing sales of disposable which should provide us with an attractive recurring revenue stream.
Mike: We will begin efforts to submit <unk> for reimbursement in the first quarter of 2025.
Mike: Turning back to our POC platform, we launched our latest POC. The row four in October of 2024, we have already received positive feedback from patients and providers on this new device.
Mike: Patients appreciate that is lightweight for flow setting and nearly six hours of battery life allow them to remain mobile mini.
Mike: Meanwhile, we have made significant advancements in our digital health offerings to support patients distributors and providers with enhanced device connectivity and remote accessibility. We are in the process of launching several updates that will provide our patients and partners with the ability to remotely monitor device health and usage.
Mike: Core principle of our digital solutions is to increase accessibility for patients while saving our b to B partners time and money.
Mike: The fulfill this principle, we are including new features in our energy and connected app such as the ability for patients to receive important software updates Chuck battery life and receive device helped summaries often their phones.
Mike: For our <unk> partners, they will now be able to remotely diagnose device issues, removing the need for costly repeat service visits.
Speaker Change: Before I pass the line to Mike I would like to thank the entire energy team for their diligence focus and commitment to our partners and patients during a year of change I'm thrilled to move into 2025 with our new leadership team fully in place and I am confident we have positioned energen for success going forward with.
Speaker Change: That I will turn it to Mike to provide an update on our financials Mike.
Mike: Thank you, Kevin and good afternoon, everyone unless otherwise noted all financial comparisons to the prior year comparable period.
Mike: Total revenue for the fourth quarter of 2024 was $81 million, an increase of five 5% compared to the prior year.
Mike: The increase was primarily driven by higher demand and new customers in international and domestic business to business sales.
Mike: Lastly, offset by lower direct to consumer sales and rental revenue.
Mike: For the fourth quarter Foreign exchange had a positive 90 basis points impact on total revenue and a positive 330 basis points impact on international revenue.
Mike: Looking at fourth quarter revenue anymore detail basis.
Mike: Domestic business to business revenue increased 24, 1% to $22 4 million versus $18 $1 million in the comparable period.
Mike: Driven by increased demand from new customers and resellers.
Mike: International business to business revenue increased 31, 5% to $28 $3 million compared to $21 $5 million in the prior period.
Mike: Primarily driven by an increase in demand from our partners in Europe and new customers.
Direct to consumer sales decreased 21, 3% to $15 6 million from $19 $8 million in the prior period as we continued to operate with a smaller and more efficient team to drive profitability in this channel.
Mike: As a reminder, we significantly reduced the size of our DTC sales force in early 2024.
Mike: Of this reduction will not be reflected in our year over year comparisons until mid 2025.
Mike: Rental revenue decreased 16, 5% to $13 8 million from $16 5 million.
Mike: Period.
Mike: Primarily driven by continued lower average billing rates due to the mix shift to private payers.
Mike: I want to discuss fourth quarter gross margins.
Mike: Total gross margin was 45, 3%, increasing 821 basis points from the same period of the prior year.
Mike: Primarily driven by lower raw material cost and operational efficiencies.
Mike: Sales revenue gross margin was 46, 5% an increase of 1369 basis points, driven primarily by lower raw material cost and operational efficiencies, partially offset by a change in sales mix towards increased business to business sales.
Mike: Rental revenue gross margin was 39, 8% a decline of 1290 basis points, driven by a higher mix shift or private payer reimbursement and lower net revenue per rental patient as a result of a decrease in the percentage of patients built compared to total patients on service.
Mike: Moving on to operating expense in the fourth quarter total operating expense decreased to $47 $7 million.
Mike: Compared to $57 $1 million in the prior period, representing a decrease of 16, 6%.
Mike: This decrease was primarily related to changes in fair value of the earn out liabilities and certain onetime costs related to the CEO transition in the fourth quarter of 2023, and lower consulting expenses as a result of cost saving initiatives taken by the company.
In the fourth quarter of 2024, we reported a GAAP net loss of $9 8 million.
Mike: Compared to $26 $6 million in the fourth quarter of 2023.
Mike: And a loss per diluted share of <unk> 41 in the fourth quarter of 2024 versus a loss of $1 14 in the fourth quarter of 2023.
Mike: On an adjusted basis, we had a net loss of $5 8 million compared to a loss of $19 $4 million in the comparable period.
Mike: And an adjusted loss per diluted share of 24 cents compared to a loss of 83 cents in the fourth quarter of 2023.
Mike: Adjusted EBITDA was negative $3 $6 million in the fourth quarter of 2024 compared to a negative $17 3 million in the prior year period.
Mike: Moving onto our balance sheet.
Mike: December 31, 2024, we had cash cash equivalents and restricted cash of $117 4 million with no debt outstanding.
Mike: As Kevin mentioned in his remarks as part of our collaboration with you will they have invested $27 $2 million and energen further strengthening our balance sheet.
Now to touch on full year performance.
Mike: Total revenue for the full year of 2024 was $335 7 million.
Mike: An increase of six 4% compared to the prior year.
Mike: The increase was driven by an increase in international and domestic business to business sales, partially offset by lower direct to consumer sales and rental revenue.
Mike: For the full year foreign exchange had a positive 30 basis points impact on total revenue and a positive 90 basis points impact on international revenue.
Mike: Total gross margin was 46, 1%, increasing five or 96 basis points from the prior year, primarily driven by lower raw material costs.
Mike: Operational efficiencies, including some one time adjustments amounting to about 50 basis points and that was partially offset by sales channel mix.
Mike: General mix will continue to impact overall gross margins given our sales channel performance.
Mike: For the full year.
Mike: Total operating expense decreased to $197 $3 million compared to $236 $1 million for the full year 2023, representing a decrease of 16, 4%.
Mike: Excluding the onetime noncash impairment charge of $32 $9 million in 2023 operating expense decreased two 9%.
Mike: For the full year, we reported a GAAP net loss of $35 9 million compared to $102 $4 million for the full year 2023.
Mike: And loss per diluted share of $1 52, and the full year 2024 versus a loss of $4 42 and the.
Mike: Full year 2023.
Mike: On an adjusted basis, we had a net loss of $24 million.
Mike: <unk> to a loss of $48 $3 million for the full year 2023, and an adjusted loss per diluted share of <unk> 86 cents compared to a loss of $2.08 in 2023.
Mike: Adjusted EBITDA was a negative $9 $5 million for the full year compared to a negative $37 8 million for the full year of 2023.
Mike: We are very pleased with the year over year progress we demonstrated on GAAP net loss adjusted net loss and adjusted EBITDA in 2024, and we will maintain a diligent approach to spending going forward.
Mike: On that note I will now discuss our first quarter and full year 2025 financial outlook.
Yeah.
Mike: For the first quarter 2025, we expect revenue to be in the range of 79 million.
Speaker Change: $81 million, reflecting 1% to 4% reported growth relative to the first quarter 2024.
Speaker Change: For the full year 2025, we expect revenue to be in the range of $352 million, the $355 million, reflecting 5% to 6% reported growth relative to the full year of 2024.
Speaker Change: Turning to margins.
Speaker Change: Based on our strategy to drive profitable growth positive trends in our business to business channel and costs associated with the introduction of semi ox and you're well into our product lines. We expect gross margins to be in the range of 43% to 45% for the full year 2025.
Speaker Change: Also as a result of this strategy our goal for full year 2025 is to approach adjusted EBITDA breakeven as we continue to manage expenses diligently and generate leverage in our business.
Speaker Change: We expect future improvements to profitability to be driven by top line growth and operating expense management, while we leverage our existing cost structure.
Speaker Change: Before I turn the line back to Kevin I would like to make a note regarding recently proposed tariffs.
Speaker Change: Our team has been closely monitoring government commentary and actions.
Speaker Change: And we have been diligent and conducting a comprehensive analysis of the situation.
Speaker Change: Given that our primary manufacturing facilities are located in Plano, Texas, we believe any possible headwinds will be manageable.
Speaker Change: We will continue to follow the communications from the U S Federal and other government entities on this front and keep our stakeholders informed as appropriate.
Speaker Change: Concluding my remarks, I would like to share my optimism for the year ahead, we have a great team and product portfolio with energen and with a diligent approach to management and spending we believe we will achieve an attractive sustainable financial profile as well.
Speaker Change: And with that I will pass the call back to Kevin for closing remarks.
Kevin Smith: Thank you Mike I'm very proud of our 2024 performance a result, with a product a remarkable dedication and resilience by our team we drove significant growth, while continuing to innovate and deliver for respiratory patients around the world I am confident that we will carry our momentum into 2025 and beyond and look forward to <unk>.
Kevin Smith: Sharing our future progress with that I will open it up for questions operator.
Kevin Smith: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Speaker Change: <unk> com tone will indicate that youre in the question queue. You May press star two to remove yourself from the queue.
Speaker Change: For participants using speaker equipment that may be necessary to pick up the handset before pressing the star keys, one moment, while we poll for questions.
Speaker Change: And our first question comes from Margaret capsule with William Blair. Please proceed with your question.
Speaker Change: Hey, guys, it's Max on for Margaret Tonight. Thanks for taking the question I just wanted to start off on the guide what's contemplated in the guide in terms of the UL agreement throughout 2025, and he puts and takes on the guide overall would be helpful in that sense.
Speaker Change: And then my second part I'll, just ask right upfront I know you guys said that you all would be a headwind to gross margin.
Speaker Change: I believe you had mentioned.
Speaker Change: Some greater leverage in terms of operating margin.
Speaker Change: Could you just talk through some of the synergies you are expecting there.
Speaker Change: Any color would be great. Thanks.
Speaker Change: This is Mike I'll take the first part of the question at least in terms of you will gross margin impacts or even in our guidance.
Speaker Change: Our expectation is that you won't have a significant impact in our results for 2025.
Speaker Change: We do have some you know some revenue in there, but keep in mind. We just closed this deal last week. So it's going to take us awhile to get up and running there, but we don't have a lot in the comment that NDA in my prepared remarks about the gross margin impact to you will.
Speaker Change: It really relates to let me, let me add something that might be helpful. So there's a couple of items that are looking at in terms of having a one time impact on our gross margins in 2025, and they don't amount we want but everything is up so the reference to to the comment I made in terms of the oil impact is really well in Sydney.
Speaker Change: US introductions and kind of laying the groundwork for those products to be implemented and enrolled into our other product lines.
Speaker Change: That in addition to.
Speaker Change: Some.
Speaker Change: Premiums of raw material purchases made in previous years that was still sitting on our balance sheet.
Speaker Change: Both of those amounts have been combination of about 100 basis points not significant amounts, but we felt it was important to mention those.
Speaker Change: In terms of our guidance impact so that's the guidance impact that we would see in terms of you will again in terms of 2020, but nonetheless revenue built into our into our into our guidance.
Kevin Smith: Yeah, Hi, Thanks for taking the other thing I'd add on to that Yeah. Sorry next Kevin is just you'd also asked a bit about the.
Kevin Smith: And down the supply chain I think you had you'd asked about that as well and you know.
Kevin Smith: There is some potential for us as we are and as we continue to mature the relationship here with leveraging their purchasing power in our purchasing power we are purchasing in our in our respective businesses and similar components raw materials.
Kevin Smith: Yeah.
Kevin Smith: That's great. Thanks, guys.
Speaker Change: Thank you and our next question comes from Robbie Marcus with Jpmorgan. Please proceed with your question.
Speaker Change: Hi, This is Allen on for Robbie I had another question on the guide specifically.
Speaker Change: Okay modest contribution, but how should we think about the breakdown between your different segments. How much of the guide is being driven by DTC BTB U S O U S et cetera.
Speaker Change: I think the best way to answer that question first of all we know we haven't guided to gross margin I mean, I'm sorry by revenue channel.
Speaker Change: We haven't done that.
Speaker Change: <unk> intends on doing that now, but I didn't get into the agenda to give you a general feel.
Speaker Change: <unk>.
Speaker Change: We approached the guidance in terms of revenue for the year so in.
Speaker Change: In 2024, we saw a lot of <unk>.
Speaker Change: Growth in our <unk> business, the combined of around 30%.
Speaker Change: So we see that continuing in terms of the <unk> business being a major part of our growing but not at that rate. The other thing that kind of factors into our revenue guidance for the year. When you look at the D to C business, we've talked in the past about how the DTC business, we commit a conscious decision to make.
That channel more profitable how we did.
Speaker Change: We took a lot of class though.
Speaker Change: In terms of reps so the rep count is significantly lower.
Speaker Change:
Speaker Change: Than we've had in previous years. So as a result of that you've seen a reduction in revenue that we expect to continue through the first half of 2025 in a similar way that we saw in 2024 play.
Speaker Change: Play out so in other words until we get to the point, where that Rep count is consistent on a year over year basis, we will continue to be challenged on the DTC revenue lines. So that's what we'll see in the first half of the year. So those are a few things that we looked at in terms of how do we build off that.
Speaker Change: Our revenue guidance number the other day.
Speaker Change: With that said I Didnt mentioned and as part of our business is the rental business. So you look at the rental business, there's a lot of it.
Speaker Change: Things that we're doing is trying to improve that business, but in terms of looking at are there going to be anticipated like significant.
Speaker Change: Changes in that business.
Speaker Change: In the near term.
Speaker Change: We don't see any significant changes in the near term again working in a lot of things to make that revenue.
Speaker Change: That channel more profitable and generate more revenue, but in terms of the short term.
Speaker Change: We don't see any significant needle movers. So that's how we approach our revenue guidance.
Speaker Change: Got it. Thank you and then second question you know you gave us the first quarter guide, but how should we think about the cadence kind of through the rest of the year, China seems like your seasonally.
Speaker Change: Maybe flattish from fourth quarter to the first and then how do we get to the balance of the guide from a cadence perspective. Thank you.
Speaker Change: So yes in terms of Q1, we did provide that.
Speaker Change: If you look at we're not unexpected any significant I guess changes if you look at it on previous years and you look at traditionally you'll see Q2, and Q3 is strongest revenue orders and also our strongest quarters from a D D.
Speaker Change: Tc.
Speaker Change: Perspective, we do have seasonality Joan seasonality challenges in Q1 and Q4. So in terms of the cadence I would say that.
Speaker Change:
Speaker Change: That would probably be would be a good way to look at it in terms of <unk>.
Speaker Change: Nothing significant in terms of.
Speaker Change: You didn't expect to see Q2, and Q3 is a strong whereas in Q1 to be in.
Speaker Change: The lower orders and again.
Speaker Change: Challenged by seasonality in those quarters.
Speaker Change: Thank you Sam.
Speaker Change: And our next question comes from Mathew Blackman with Stifel. Please proceed with your question.
Speaker Change: Hey, guys. This is colin on for Matt.
Colin: To start with a quick one on you all and their portfolio and how you're going to introduce it to the U S is that going to be similar to semi ox and that you can sell it across all channels and leverage at the same call points or are you going to be selective about the channels and is there incremental investment involved there.
Speaker Change: On that would be helpful.
Colin: Sure so yes.
Colin: So that is similar in the sense that we do see opportunities for Citi.
Colin: So the UL products to be able to want to go cross across our channels, we're starting off with the stationary oxygen concentrator, which we will have Brandon as as an engine.
Colin: There's opportunities for us both on the when you when you look at the.
Colin: The rental segments, the <unk>, where we see significant opportunities where today, we don't have a stationary oxygen concentrator offering for <unk>. So that gives us the potential to sell both of those components.
Colin: We'll have an impact on our rental business.
Colin: The positive margin impact on our on our rental business and that you may or may not know, where maybe people don't broadly now that have been time and when we.
Colin: Place, a POC and portable concentrator and energen with a patient through the rental channel. We also need to supply a stationary concentrator and it's a similar thing with with others in our <unk> network. Our partners. So it's an opportunity to be able to package. These up in half and that both of those in the rental and the b to B and there's also the <unk>.
Colin: Opportunity for us to sell for cash in the in our DTC channel.
Colin: Leveraging the existing sales organization, not having to add additional sales and our salespeople and sales functions. If you will so more more throughput more productivity per run.
Colin: Got you and then a quick follow up on on rentals. In particular, you guys talked about the payer mix shift towards private payer is is that a dynamic you see changing anytime soon and what's what's really behind it.
Colin: That movement, if you don't mind me asking thank you.
Colin: Certainly so the ROI when you look at that dynamic on the mix shift. It's it's more of that shift from traditional Medicare towards Medicare advantage and we're seeing more patients had been moving to the into the Medicare advantage plans some of that and how that is going to continue in the future is going to be dependent on the.
Colin: The current administration and how they view Medicare advantage versus traditional Medicare, but that is something that we anticipate seeing that continue on in the in the near future.
Colin: Yeah.
Speaker Change: Our next question comes from Mike Matson with Needham. Please proceed with your question.
Speaker Change: Hey, guys. This is Joseph on for Mike.
Speaker Change: Maybe just the first couple around semiotics.
Speaker Change: Just trying to understand a little bit more of the pathway towards the.
Speaker Change: The eventual launch.
Speaker Change: I guess, just looking at maybe like a data readout in the future is there anything that you can kind of frame up for us.
Speaker Change: I think of.
Speaker Change: They are generating some clinical evidence out in Europe. So if there's something coming down the pipe that would be good to know about.
And then I guess, maybe just more broadly around.
Speaker Change: Kols engagement with semi Alex can you just maybe give us another.
A brief explanation of how you.
Speaker Change: Kind of framing up the strategy of engaging private insurers before you get Medicare reimbursement.
Speaker Change: And then I'll have one after that thank you guys.
Speaker Change: But the and I'll start with that and Mike. So on the on the semi Alex we do have we do have data that has that we've been generating and and physio assist had been generating prior to the acquisition in Europe.
Speaker Change: Typically small datasets on.
Speaker Change: On patient populations, mostly single center studies and are.
Speaker Change: In Europe, we do have some additional work that is going to be ongoing in Europe, we're expanding on some of those clinical trials, including reimbursement trial, which would be would you be multicenter multi countries aimed towards reimbursement in Europe, particularly for the for the U S. The timing on that and gain and going towards.
Speaker Change: Reimbursement part of that is going to be determined by the communications discussions that we have with our with one of our key opinion leaders as well as bad early engagement with CMS. Our goal is to make sure that we maximize reimbursement for <unk> in there in the U S marketplace, So where we are.
Speaker Change: I'm more concerned with with ensuring that we maximize that then getting as quick as possible. A response from CMS. So by that I mean, we have two opportunities in a calendar year to submit for reimbursement in January for US and you have July one. So we are engaging with key opinion leaders we've identified the thought leaders in.
Speaker Change: And the country, our medical team and our marketing teams are engaging with the physicians talking about semiotics talking about some of the data that that's relevant and available from from Europe I'm talking about the patient populations here, how we could how we can impact those are those patients and what data both thought leaders, who like to have as well.
Speaker Change: What we believe is going to be necessary for full reimbursement ultimately with CMS. So so that is that's been mapped out that's a process that our chief Medical officer and our teams are in the process of engaging on the on the private side.
Speaker Change: The private side, we'd find we will be starting our engagement with the private insurers to also start to look at what does that what does that needs to happen there in order for us to get reimbursement from private payers from private payers prior to adding CMS reimbursement in some sort of a foundation. There you typically have to go through the process.
Speaker Change: Of getting a are you getting physicians to to give the prescriptions. Those are submitted to the insurance company. Those are denied you go through an appeals process and there's a series of those but it is a bit of a.
Speaker Change: A bit of a sequence in advance to make sure that we're doing the right things not putting the overall reimbursement with CMS at risk, but again as I'll point back to wanting to make sure that we maximize maximize that reimbursement.
Speaker Change: Yeah.
Speaker Change: Okay great.
Speaker Change: Makes sense.
Speaker Change: And then maybe just I guess around the prescriber salesforce. So just curious if you can.
Speaker Change: Can you talk about any referral trends.
Speaker Change: You guys are seeing here at the start of the year I guess more broadly just on the sales force the size of it.
Speaker Change: Whether you could put some numbers on it.
Speaker Change: Or just look at it Big picture, what does that Salesforce look at look like.
Speaker Change: <unk> started 2025 versus the same time last year and it sounded like in your guys' comments that there is.
Still some right sizing to do there. So I'm just curious here in the first half of 2025, what what are you looking at.
Speaker Change: In terms of like I guess, some more pruning that needs to be done.
Speaker Change: Well, it's one thing just to make sure that it's clear and then let me see if I if I've missed something on the a question collyn that fee.
Speaker Change: When we there's two aspects that we talked about one is on the <unk>.
Speaker Change: The DTP channels, the DTC channel that has the the direct to patient drug to the customers.
Speaker Change: So that channel is is reduced and head count from where we started in the at the beginning of 2025, we had that was a re baseline here that we had in 'twenty four or so.
Speaker Change: So the first half of 'twenty five compared to the first half of 'twenty four will be an unfavorable comparison, meaning that we have fewer reps in the first half compared to prior year. The back half of the year is where that that will be more of an equivalent year on year comparison in our in the DTC channel and the prescriber channel.
Speaker Change: That is a that.
Speaker Change: The sales reps that are calling on the physicians offices do Paul from a phone.
Speaker Change: From a prescription referral standpoint, those sales reps, we did downsize at the beginning of the year, we had a third party relationship.
Speaker Change: It was like a salesforce for hire that we that we did away with that relationship at the beginning of the year. We brought a much smaller team in house of affected perhaps had been going out and and building those those referrals directly with the physicians. So I just want make sure that insides clearly we're talking about two different things here.
Speaker Change: Yeah, absolutely thanks for separating that out that's really helpful. Thanks.
Speaker Change: Thanks for taking our questions.
Speaker Change: Thank you.
Speaker Change: And with that there are no further questions at this time and this does conclude today's teleconference. We thank you for your participation and you may disconnect. Your lines at this time.
Speaker Change: Okay.