Q4 2024 Allurion Technologies Inc Earnings Call
Hello, everyone and welcome to ILUVIEN fourth quarter to fourth quarter earnings call. Please note that this college being recorded after just be great speakers prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time. Please press star followed by one on your.
Telephone keypad. Thank you.
Good morning, and thank you for joining US earlier today alert you on technologies, Inc. Issued a press release announcing financial results for the quarter ended December 31st 2024, and provided a business update.
Can access a copy of the and now it's been on the company's website at investors Dot alert Yahoo Dot com.
On the call today is Shawn Nucor, founder and Chief Executive Officer before we begin I would like to inform you that comments mentioned on today's call contain forward looking statements within the meaning of federal Securities laws.
Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in our securities and Exchange Commission filing.
Our quarterly report on Form 10-Q filed on November 13th 2024, our SEC filings can be found through our company website at investors Dot alert you on dot com or the Sec's website investors are cautioned not to place undue reliance on such forward looking statements and l'oreal.
Takes no obligation to publicly update or release any revisions to these forward looking statements.
Please note that this conference call is being recorded and will be available for audio replay on our website under the events and presentation section on our Investor Relations page shortly after the conclusion of this call.
Speaker Change: Today's press release, and supplementary financial data tables have been posted to our website and with that I will turn it over to Shawn Seanor.
Speaker Change: Good morning, and as always thank you for joining us today before discussing our fourth quarter results and updating you on the business I would like to begin today by sharing our vision for the future of obesity care and how we believe a very odd can bring distribution to reality and can have a significant and positive impact for shareholders in <unk>.
Speaker Change: 25 and beyond.
Speaker Change: <unk> ones have become a popular first line weight loss therapy challenges for them persist and becoming the long term solution for obesity.
Speaker Change: 30% of patients on G. L. P. One discontinue their medication within the first month and $50 to 75% discontinued during the first year.
Speaker Change: The adherence obstacle for G. O P. One is caused by three factors side effects muscle mass loss and high cost.
Speaker Change: And importantly, each of these issues is exacerbated when higher doses are needed to achieve clinically meaningful weight loss, which is the standard path.
Speaker Change: We believe that combining jewelry on program with low dose <unk> could become a new standard of care for obesity.
Speaker Change: A combination approach has several advantages.
First at lower doses of DLP, one side effects, including muscle mass law are mitigated.
Speaker Change: It is well established that the gastrointestinal side effects of DLP ones are dose dependent and not the loss of lean muscle when on GL coupons alone can be up to 40%.
Speaker Change: The total weight loss.
Speaker Change: Thus a lower dose of G. L. P. One can help to limit side effects lawsuit lean muscle and may lead to better adherence.
Speaker Change: Second the rapid weight loss achieved through the leery on balloon the lifestyle modification strategies offered through the <unk> program and the remote monitoring through the ordinary on virtual care suite are all synergistic with low dose G. L P ones.
Speaker Change: Third from a physiological perspective, Larry on balloon in GOP ones are highly synergistic.
Speaker Change: Larry on ballooned in due to sit tight while G. L P ones reduce hunger.
Speaker Change: This dual action across two different mechanisms of action as shown to lead to greater weight loss. When the two are used in conjunction and further opportunities for behavior change as patients learn to control their hunger, while feeling full faster.
Speaker Change: We believe all of these synergies ultimately will lead to long term weight maintenance and preservation of muscle mass something we call metabolically healthy weight loss inside of L'oreal.
Speaker Change: Strong data have already been generated on such combination use and it appears to be very promising.
Speaker Change: And 181 patients showed that starting with Liraglutide, which was the previous generation G. L. P. One drug after the first month of the <unk> balloon can lead to 19% total body weight loss at eight months or four months after field area on balloon passes.
Speaker Change: A double blind randomized controlled study in 115 patients in which patients who received the <unk> balloon and oral semi guotai lost 18% of their total body weight and had improved resolution of type two diabetes hypertension and obstructive sleep apnea.
Speaker Change: Initial data in 52 patients treated with jewelry on program and low dose some of the tide, who lost 20% of their total body weight at eight months increased lean body mass by 15% and remained fully adherent to their G. L. P. One medication.
Speaker Change: Well at this point added delivery on Academy event in March I had the opportunity to speak to our positions in Europe, we're using deal around balloon.
Speaker Change: Many of them were very attract surgeons, who have observed a drop in bariatrics surgery volume due to the rise of <unk>.
Speaker Change: These physicians are either already using or considering using the balloon in combination with <unk> to both deliver better clinical results to their patients, but also offer an option to patients that can mimic the effects of bariatric surgery without an invasive procedure.
Speaker Change: In fact, one physician called the combination of jewelry on balloon with a low dose <unk> one a non surgical sleeve gastrectomy because of the weight loss that can be achieved and the dual effects on both satiety and hunger that mimic what is accomplished bariatric surgery.
Speaker Change: We believe there is gold to mine in combination therapy or the oleary on balloon is paired with a low dose <unk> and intend to launch additional prospective studies to confirm our initial findings.
Speaker Change: The trials that we intend to conduct for which we have already begun to select sites and formalize our protocols. We will study the weight loss muscle mass and G. L. P. One adherence results in patients treated with deal around balloons and low dose <unk> one therapy.
Speaker Change: We believe that assuming these results validate our hypotheses this clinical trial pipeline could define a new paradigm in obesity care, where alerting will be right at the center.
Speaker Change: I have deep conviction in this vision for the future and the importance of our clinical pipeline and I look forward to providing additional updates on future calls.
Speaker Change: Shifting now to the fourth quarter and full year 2024, we ended the year with clarity and excitement about our path forward in 2025, a year, where we expect several rich catalysts fourth quarter revenue was $5 $6 million in full year revenue was $32 1 million in.
Speaker Change: In line with our pre announcement in January.
Speaker Change: Operating expenses in the fourth quarter decreased by 39% compared to the prior year as the restructuring and reorganization, we conducted began to bear fruit.
Speaker Change: Despite these reductions procedure volumes grew by 4% in 2024 higher than our previously issued guidance.
Speaker Change: Something we believe is driven in part by patients entering the funnel after trying and stopping G. L. P. One medications.
Speaker Change: Our excitement for 2025 stems from a clear plan that we shared on our last call. Our plan is built around five pillars first our new commercial plan focused on key geographies with deeper penetration within these geographies and a business to business to consumer or b to b to C direct sales model versus a direct to consumer or <unk>.
Speaker Change: <unk> marketing model.
Speaker Change: Second gaining FDA approval for the ordinary on balloon and preparing for U S launch.
Speaker Change: Third achieving profitability for the ex U S business by the end of 2025.
Speaker Change: Scaling our now proven AI product platform and leveraging a variety of business models.
Speaker Change: Fifth resuming commercialization in France.
Speaker Change: In the fourth quarter of 2024, and thus far in the first quarter of 2025, we have made significant progress across many of these fronts.
Speaker Change: Regarding our new commercial plant in the fourth quarter, we reorganized our sales and marketing teams develop hiring plans for our direct markets, where we plan on increasing the number of reps and establish new relationships with distributors in key markets. Thus.
Speaker Change: Thus far in the first quarter, we have begun hiring new reps experienced in b to B to C. Commercial approaches conducted our first delivery on academy focused on core customers in direct markets and shifted the mindset and culture at <unk> to one that prioritizes profitability.
Speaker Change: We believe momentum is building in the first quarter of 2025, as our new commercial strategy and new commercial team takes hold.
Speaker Change: As I mentioned on our previous call we have begun to pilot our new strategy with focus accounts indirect markets. In these accounts procedure volumes are on track to increase by over 30% in the first quarter of 2025 compared to the fourth quarter 2024, suggesting that our new plan could lead to significant future growth once rolled out.
Speaker Change: Global.
Speaker Change: Regarding our pathway to FDA approval in January we announced positive topline results for the audacity trial that we believe will support the completion of our PMA application in the first half of this year.
Speaker Change: We have also begun to evaluate various models for a U S launch to enable the most efficient utilization of capital.
Speaker Change: The U S represents a massive opportunity for <unk> due to the high rates of obesity and widespread use of <unk>.
Speaker Change: With over 40% of adults in the U S with obesity, 9% with severe obesity and wide availability of <unk>. We believe the combination approach that I touched on at the beginning of the call could become the standard of care when Neil around balloon launches in the United States.
Speaker Change: With the restructuring we completed in the fourth quarter of 2024, we move to Larry on one step closer to being EBITDA positive in 2026, we expect operating expenses to decline by approximately 50% in 2025 compared to 2024 as the cost savings from the restructuring take hold and are expecting revenues of approximately.
Speaker Change: The $30 million in 2025.
Speaker Change: Despite this reduction in operating expenses, we continue to invest in key areas that will vary on that will support our future growth.
Speaker Change: We expect our sales team to actually grow in 2025 compared to 2024. We also will continue to advance the design of the <unk> balloon by launching our next generation balloon with a smaller capsule more radio will pay catheter and enhanced filling valve in additional markets and add new features to the alert on virtual care suite to increased.
Speaker Change: Productivity of our partner clinics.
Speaker Change: In the first quarter of 2025, we also raised additional capital through financings that provides the company with cash runway into 2026 and through expected FDA approval with.
Speaker Change: With this additional financing in place we have a strong balance sheet that can lead us through milestones that we believe will create significant value for shareholders.
Speaker Change: In February we were pleased to announce that we were clear to resume sales in France. After anthem, the French regulatory authority reviewed the changes we made to our advertising physician training and patient follow up programs. In addition to that review and some also performed a bottoms up review of the <unk> safety and efficacy profile and ultimately <unk>.
Speaker Change: <unk> that the benefits of our technology outweigh the risks.
Speaker Change: We are thrilled to be back on the French market and have begun re engaging with clinics. So that we can once again served French patients who are struggling with obesity.
Speaker Change: I will now turn the call over to Tara Brady, our interim Chief Financial Officer Tara.
Tara Brady: Thank you Sean Snow our revenue for the fourth quarter of 2024 was $5 6 million.
Tara Brady: Compared to $8 $2 million for the same period in 2023.
Tara Brady: Year over year decrease in revenue was primarily due to the temporary suspension of sales in France, and macroeconomic headwinds in certain markets, leading to lower reorder rates.
Tara Brady: Gross profit for the fourth quarter ended December 31, 2024, with $2 5 million or 45% of revenue compared to $6 $4 million or 78% are grappling with the same period in 2023.
Tara Brady: Gross profit for the fourth quarter ended December 31, 2024 was negatively impacted by the reduction in revenue and materials and lower production volume, which resulted in less manufacturing labor and overhead being absorbed elsewhere.
Tara Brady: Okay.
Tara Brady: Also recorded an adjustment of the stock and obsolete scrap related to inventory on hands with a shelf life of mine, which was primarily due to the reduction in revenue and temporary suspension of plasma products.
Tara Brady: For the full year ended December 31, 2024, gross profit was $21 5 million or 67% of <unk> gross profit margin is expected to expand in 2025 with inventory levels normalizing in salesman came out in France.
Tara Brady: Sales and marketing expenses for the fourth quarter of 2024 were seven 9 million compared to $10 $7 million for the same period in 2023 and.
Tara Brady: Included $3 $1 million of restructuring costs.
Tara Brady: The reduction in expense was primarily driven by increased operating efficiency and our restructuring initiatives implemented during the fourth quarter of 2024, which refocus spend on more efficient channels.
Tara Brady: Research and development expenses for the fourth quarter of 2024 were for.
Tara Brady: $4 $1 million compared to $6 $1 million for the same period in 2023 and included <unk> 3 million of restructuring costs.
Tara Brady: Reduction was primarily driven by reduced costs related to the audacity trial and restructuring initiatives implemented during the fourth quarter of the year.
Tara Brady: General and administrative expenses for the fourth quarter of 2024 were $7 $7 million compared to $15 4 million.
Tara Brady: For the same period in 2023 and included restructuring and financing costs of $1 1 million.
Tara Brady: The reduction was primarily driven by decreases in bad debt expense and in stock based compensation as well as the restructuring initiatives implemented during the fourth quarter of the year.
Tara Brady: Loss from operations for the fourth quarter was $17 $1 million compared to $25 $7 million for the same period in 2023 and included $4 6 million of restructuring and financing costs.
Tara Brady: The reduction was driven by our restructuring initiative implemented during the fourth quarter.
Tara Brady: As of December 31, 2024, we had cash and cash equivalents of $15 $4 million.
Sean: I will now turn the call back over to Sean to now.
Sean: Thanks, Tara the organizational and financial restructuring that we recently executed and the implementation of the new commercial plan have right sized and focused hilary on to be a much more efficient business. We believe that 2025 will be a year full of rich catalysts that will redefine the future of malaria.
Sean: The clinical data we are generating on the combination of a very on with low dose <unk> one therapy could define a new standard of care in obesity management and we're excited about its potential in our existing markets and once approved the U S market in the year ahead, I am looking forward to executing across our five point plan and building out what we call.
Sean: <unk> two point out.
Sean: The future has never been brighter and our conviction has never been higher.
Sean: With that I will now turn to the questions and answer portion of the call. Operator, Please open up the call for questions.
Speaker Change: A question and answer session, if you'd like to ask a question. Please press star followed by one on your telephone keypad.
Speaker Change: You limit your questions to one question and one follow up your first question comes from the line.
Speaker Change: Matt Taylor from Jefferies. Your line is now open.
Matt Taylor: Hi, good morning, Thanks for taking the question.
Speaker Change: So I wanted to follow up on these interesting results that you presented looking out.
Speaker Change: Using the balloons with the low dose a GOP ones I was wondering if you could just expand on some of the reasons. Why you think the results were so good there in terms of both weight loss and in the lean muscle.
Speaker Change: Early math game.
Speaker Change: Yes, thanks for the question Matt.
Speaker Change: All of those things to point out there one.
Speaker Change: This study that we reported out on combined deal very on balloon with a low dose of stem the tide or G. L. P. One medications and what we know historically is that there is a very clear dose response relationship between <unk>, one drug dosing and muscle wasting and side effects and so.
Speaker Change: Part of the results that we were able to demonstrate were driven by the fact that we were using a lower dose of the <unk> versus the higher dose, which protects lean body mass in particular muscle tissue.
Low doses of DLP ones, you still get a weight loss effect and Thats really where the synergistic mechanisms of action come into play at the low dose <unk>. One you suppress the patient's hunger and with the <unk> balloon onboard you can induce early satiety and when you actually stimulate both of those mechanisms.
Speaker Change: You get the synergistic results in terms of weight loss. So that is how we were able to achieve a 20% reduction in body weight through that synergistic stimulation of those two mechanisms while maintaining.
Speaker Change: And actually increasingly and body mass.
Speaker Change: Pes is all of the tools that we surround the balloon and the low dose <unk> one with that includes the ovarian virtual care suite, our connected scale that actually measures and tracks muscle mass and deal very on App, which is providing behavior change.
Speaker Change: Lifestyle modification strategies and also co gyros are 2470 I coach with all of that supports the patient is actually doing things in their day to day life like eating a higher protein diet, maybe pursuing weight bearing exercise all of that also leads to preservation and in our case.
Speaker Change: An actual increase in lean body mass and muscle mass so really when you taking a step back actually when you combine these two approaches the ovarian balloon with a lower dose of <unk>. Once you really get the best of both worlds and Thats, what drives not only the weight loss and the muscle mass preservation, but also the better adherence to the <unk> one.
Speaker Change: The long run.
Speaker Change: Great. Thank you.
Speaker Change: And I just wanted to ask a separate question on the 2025 guidance of $30 million did.
Could you talk about any key assumptions in there in terms of volumes pricing France.
Speaker Change: Anything that might help us understand how you're looking to get to the $30 million for the year.
Yes, it's a good question and really when we took a look at 2025 and took a look at how resilient. Our procedure volume was in 2024. Despite the significant reductions that we made in operating expenses in 2024, we feel very confident going into 2025 that will be able to.
Speaker Change: Serves the procedure volume that we saw in 2024, despite additional reductions in operating expense even in sales and marketing in 2025 as we look geographically in 2025, we're seeing as we saw in 2024, the highest procedural volume increases in countries.
Speaker Change: Territories, where <unk>. One is we are actually the most mature which suggests to us that <unk> patients may be stopping the drug and entering our funnel.
Speaker Change: After having tried the drug discontinuing it maybe having regained weight and now finding themselves back in the Doctor's office looking for an alternative treatment and so looking at 2025, we're really doubling down on the regions, where <unk> is our most mature because thats, where we see the most traction specific.
Speaker Change: In the second half of 2024.
Speaker Change: With regards to France, we're excited to be back on the market there in serving patients again.
Speaker Change: It will take some time for us to Reengage with customers Reengage with clinics and have them turn.
Speaker Change: Their machines back on.
Speaker Change: No for a fact that French physicians, who we've worked with historically are very excited to get the balloon back in their practice I don't expect a material contribution from France in 2025, but I do expect late in this year and going into 2026, there to be much much larger contribution from France on a go forward basis.
Speaker Change: And one final one for me.
Speaker Change: Yes.
Speaker Change: Talked about the potential for the U S approval in 2026, but what are some of the guideposts that you would point investors to to track your progress in the U S. Along the regulatory pathway this year.
Speaker Change: The next big milestone will be completing the PMA submission.
Speaker Change: We anticipate happening in the first half of this year and after that we will be receiving feedback from the FDA on our PMA application.
Speaker Change: Which we will we expect to respond to.
Speaker Change: We continue the dialogue with SBA. So the real next milestone the submission of the PMA and then we will be updating the market subsequent to that with any future milestones.
Speaker Change: Great. Thank you so much.
Speaker Change: Your next question comes from the line of Josh Jennings from TD Cowen. Your line is now open.
Josh Jennings: Hi, Good morning, Thanks for taking the question wanted to just follow up on.
Speaker Change: You call out of the momentum in the fourth quarter in these.
Speaker Change: In terms of procedure volume growth, where GOP ones are relatively mature.
Speaker Change: Is it just wanted to ask about seeing in the very end of the first quarter, but are you seeing that momentum continue I mean, thats what were assuming but just wanted to hear.
Speaker Change: Any any commentary you can share just on first quarter trends.
Speaker Change: Yes, Josh Thanks for the question, we are seeing those trends continue in the markets, where <unk> is our most mature and then layering on top of that.
Speaker Change: As I mentioned previously with the initiation of our new commercial plan under new commercial leadership, we've been piloting several aspects of our new commercial plan Thats really focus more on b to b to C marketing strategies, helping our core accounts, specifically in our direct markets.
Speaker Change: Actually grow their productivity and utilization and in our pilot markets and in our pilot accounts in those markets, we're seeing significant growth in.
Speaker Change: Procedure volume and so we're looking forward now that many of these pilots are coming to completion, we're looking forward to expanding those strategies into other markets as the year goes on and Thats, partly why we expect a steady build of revenue as the year goes on quarter over quarter.
Speaker Change: <unk>.
Speaker Change: Excellent.
Speaker Change: Yeah.
Speaker Change: Presented publicly the case series for the combo therapy balloon <unk> and.
Speaker Change: The Vcs platform.
Speaker Change: I mean, it sounds like in your in your remarks today that that approach is already being implemented by Patrick surgeons internationally.
Speaker Change: Just was hoping maybe you could help us think through that.
Speaker Change: The combo approaches potential before some of the clinical development.
Speaker Change: Before the clinical development program.
Speaker Change: Bill.
Speaker Change: Youre planning on just had one follow up.
Speaker Change: Yes.
Speaker Change: So the results of that study work outs.
Speaker Change: Outstanding I mean, the weight loss that we were able to generate the lean body mass gains the adherence that we were able to show.
Speaker Change: With the <unk> ones.
Speaker Change: And part of the reason that I think the results were so promising so positive is for something that you mentioned, which is this just makes natural sense to both physicians and patients and from a biological standpoint, when you stimulate two different mechanisms of actions you typically unlock the type of synergy that we saw in these.
Speaker Change: These results.
Speaker Change: So as we plan our prospective studies to validate these results commercially.
Speaker Change: This combination approach is already happening and.
Speaker Change: What we've seen and what we've observed is that the combination approach really serves two different purposes for our physicians one it delivers outstanding clinical results and allows physicians, particularly with very attract surgeons to <unk>.
Speaker Change: Participate in this rise of G. L P ones and the popularity of <unk> among their patients while also delivering very on balloon and delivering best in class clinical outcomes and with that comes additional revenue to their practice and as I mentioned previously with many bariatric surgeons.
Speaker Change: The very hatrick surgery volumes have dropped significantly and their practices have been impacted as a result, the Larry on balloon in combination with <unk> presents not only a great clinical option for their patients, but also a fantastic opportunity for them to grow their practices and recover some of the revenue that they've lost.
Speaker Change: So for those reasons I actually expect commercially that this combination approach will continue to flourish not just in Europe in Italy, and Spain, where we have the academy, but really globally and in parallel we will generate or we expect to generate the prospective studies to further validate from a clinical.
Speaker Change: Perspective, what we've already seen commercially and from this first case series.
Jonathan: Thanks, Jonathan.
Jonathan: Just on the clinical development program and the prospective studies.
Jonathan: I know, it's still very early but can you share any high level.
Jonathan: Color on clinical trial design.
Jonathan: Just when do you expect to have Readouts.
Jonathan: Those prospective study results could could have a bigger impact in terms of driving this combo therapy approach.
Speaker Change: Thanks for taking the question no specifically no.
Josh Jennings: No specific thank you Josh no specific details at this point, we are developing the protocol is actively internally we've already begun discussing.
Josh Jennings: The protocols with several of the sites that we are very interested in working with us.
Josh Jennings: And what we do know now though is that these protocols will be prospective in nature and they will focus on the same metrics that this case series focused on which was weight loss lean body mass or muscle mass gains and also GL coupon adherence and I believe that by testing that in a prospective manner, we will learn a little bit more.
Josh Jennings: Sure.
Josh Jennings: <unk>.
Josh Jennings: This approach and a broader population and also get the validation that comes with any sort of prospective study design.
Josh Jennings: I appreciate that guys. Thanks.
Speaker Change: Your next question comes from the line of Jason <unk> from Roth Capital. Your line is now open.
Jason: Hi, Thanks for taking the questions in terms of the B to B to C rollout.
Speaker Change: Rollout has that been fully implemented or.
Speaker Change: Is that something that's going to take place throughout the remainder of 2025.
Speaker Change: It's something that we've piloted so far in key markets. Jason. Thank you for the question and it's something that we will continue to rollout as we get more validation on some of the approaches that we have implemented so far the pilots that we've done have worked extremely well and we will be.
Speaker Change: Be rolling those out those strategies out as the year goes on.
Speaker Change: Okay, great and.
Speaker Change: In terms of.
Speaker Change: The patients are getting traction for the regions Youre getting traction where you mentioned that the more mature markets that is the more mature markets with <unk> ones are seeing it sounds like the most growth or any metrics you can provide.
Speaker Change: In terms of what regions those are and how they're performing.
Speaker Change: Yes, what we saw in the second half of 2024, specifically in the Middle East was very promising in the middle East.
Speaker Change: Much like the United States <unk> launched a really about 12 to 18 months ago in earnest too.
Speaker Change: A lot of fanfare and a lot of hype and they took off as a first line therapy for anyone with obesity, who was looking to lose weight and what we observed is that after that rapid take off what happened subsequently was patient stopped using <unk> medications the data indicates that 30%.
Speaker Change: Patients will start within the first month, 50% to 75% will stop within the first year and as a result after about a year.
Speaker Change: Bart.
Speaker Change: What happened was patient stopped using the drugs and probably came back to the Doctor's office looking for an alternative.
Speaker Change: And we saw that also in Latin America, where patients got access to lower cost than earlier generation versions of the <unk> ones, but had a similar effect on the market. So in Europe now that <unk> have launched and have had some time to settle in I do.
Speaker Change: Expect to see that sort of similar trend occurring as 2025 goes on.
Speaker Change: Great. That's helpful and then maybe one last question.
Speaker Change: And sort of Opex, the reduction or all those changes in place or is there going to be continued reductions.
Speaker Change: Throughout the rest of this year, how do we think about modeling those.
Speaker Change: Opex changes for the year.
Speaker Change: The Opex changes for 2025 25, it into effect at the end of 2024 through the restructuring process. So.
Speaker Change: In the fourth quarter as you saw we incurred some onetime restructuring fees and expenses.
Speaker Change: Every single Department.
Speaker Change: We are all related to the restructuring that we performed and those restructuring changes are what leads to the opex reduction in 2025 compared to 2024.
Speaker Change: Got it great I'll direct I'll jump back in queue. Thank you.
Speaker Change: Thanks, Jason.
Speaker Change: Next question comes from the line of key Nikkei from Chardan. Your line is now welcome.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: I was wondering if you could provide a little more granularity about the cadence of the revenue you expect to get to 30 million for the full year.
Speaker Change: Thanks for the question K, yes, the cadence.
Speaker Change: That we expect for the year is just a steady build quarter over quarter as the year goes on and Thats really driven by a couple of factors. The first is new commercial plan under new commercial leadership Rolling out these new <unk> strategies.
Speaker Change: Specifically in our direct markets as the year goes on and also.
Speaker Change: It's going to be driven by the.
Speaker Change: The buildup of our sales team as I mentioned previously.
Speaker Change: We are reducing operating expense, 50% year over year, we're actually increasing the size of our sales force and we've already begun.
Speaker Change: Hiring new reps in our existing territories, and we expect that that hiring process will continue as the year goes on and as a rep joins <unk> and gets on boarded and it takes a quarter or two to become productive that's actually what's driving the steady revenue build as the year goes on.
Speaker Change: And when do you expect to see sort of a meaning meaningful contribution from France start.
Speaker Change: So up in revenue.
Speaker Change: Really not until the end of this year going into 2026, primarily because.
Speaker Change: It does take time to Reengage with accounts turn they're turning their those accounts back on I have them begin reaching out to patients and also just building and expanding our our feet on the street in France in terms of reps and other sort of infrastructure that we really dialed down as of <unk>.
Speaker Change: As of last year, when we were taken off the market there so.
Speaker Change: I would expect.
Speaker Change: <unk> contribution really in 2026 at earliest very near the end of 2025.
Speaker Change: Okay.
Speaker Change: Okay, and then I guess similarly in terms of the gross margin.
Speaker Change: Obviously down in Q4, but you're expecting.
Speaker Change: Year over year improvements. So again, how does that look sort of throughout the year in terms of building back to that number.
Speaker Change: The recovery in gross margin should occur more quickly than sort of our sales build in revenue build as the year goes on that the drop in margin in Q4 was really driven by the events in France.
Speaker Change: With the recall that was initiated there last year that led to inventory that we had to obsolete and that really drove margin down specifically in the fourth quarter, we expect starting in Q1 for margin to.
Speaker Change: B much more similar to where we were in the first half of 2024, and then expand further again as the year goes on and our revenue is expected to increase that leads to more absorption.
Speaker Change: Are you factoring which should drive more margin accretion I will say too that going into 2026 when.
Speaker Change: When we do expect more of a material contribution from France that should also drive further expansion of margin because France is a direct market with a high ASP.
Speaker Change: Okay, and then how would.
Speaker Change: How does the timing of.
Speaker Change: Launching the smaller balloon impact.
Speaker Change: Margin.
Speaker Change: Okay.
Speaker Change: We don't expect a significant impact in 2025 in terms of gross margin from our Nextgen balloon design.
Speaker Change: But as the balloon design gets approvals key regulatory approvals, especially in direct markets going into 2026.
Speaker Change: That may lead to further margin expansion next year, but for now in 2020 fives given that we've just launched the nextgen balloon.
Speaker Change: One key market and expect further regulatory approvals as the year goes on we don't expect a contribution from that.
Speaker Change: To expand gross margin further than where it where we expect it to be.
Speaker Change: In Q1, and the rest of 2025.
Speaker Change: Okay.
Speaker Change: Okay, Great that's helpful. Thanks.
Speaker Change: I would now like to hand back the call over to Sean <unk> for final remarks.
Sean: Thank you very much operator, as we close our call today I just wanted to extend my gratitude and thanks to all of you who joined US today, we really appreciate all of your time and interest in <unk> and in particular I really appreciate the continued loyalty and support of our shareholders all of our partners all over the world.
Sean: And most importantly, all of our employees and team members here at <unk> on your belief in our mission and your commitment to our company really are instrumental to our future success. We look forward to updating everyone on our progress as the year goes on and in the next quarter. Thank you everyone have a great day, thanks for joining us.
Sean: Thank you for attending today's call you may now disconnect Goodbye.
Sean: Okay.
Sean: [music].
Sean: Yeah.
Sean: [music].