Q2 2019 Earnings Call
Good day, everyone and welcome to the accelerate diagnostics Q2, 2016 earnings conference call.
All participants will be in listen only mode.
Should you need assistance. Please conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions to ask a question you May press star one to withdraw your question you May press star in two.
Ill also note todays event is being recorded.
At this time I like to turn the call whatsoever to Miss for Pearson.
Ma'am you may begin.
Before we begin it is important for sure. The information presented during this call may contain forward looking statements within the meaning of section 27 of the Securities Act of 1933 and section 21 E of the Securities Exchange Act of 1934.
Forward looking statements include projections statements about our future and those that are not historical facts. All forward looking statements that are made during this conference call are subject to risks uncertainties and other factors that could cause our actual results to differ materially. These are discussed in greater detail in our annual report on Form 10-K for the year ended December 31st 2018, and other reports we file with the FCC.
It is my pleasure to now introduce the Companys, President and CEO Larry Merlo.
Thank you Laura.
Good afternoon, and welcome to our second quarter 2019 earnings call.
Our results for the quarter were mixed.
Our 55 net new placements were up over 90% year over year, but came in below our expectations due primarily to timing issues in EMEA, which I will discuss in further detail later in the call.
Nevertheless, our 130 placements year to date and strong late stage funnel keep us squarely on pace to achieve our annual target.
Three to 400 placements.
And while every placement is important. The addition of certain key reference customers can create a forced multiplier impact.
At the very top of this high profile customer list is Mayo clinic Rochester.
And we couldn't be more enthusiastic to now have them as a customer.
Revenue was lower than expected for the quarter due to lower capital equipment sales well consumable revenue grew by 30% sequentially and over 125% on an annualized basis.
We remain on track to realize a significant step up in consumable revenue in the back half of the year.
As an ever increasing number of our commercially contracted instruments go clinically life.
We also continued to make progress against our longer range strategic initiatives to launch our next test kit for the Pheno for respiratory samples.
And our geographic expansion into China.
And finally this afternoon, we announced the addition of Jacksonville loves to our executive leadership team.
Jack is a veteran in the diagnostic space, serving most recently as president and CEO of Roche Diagnostics North America.
He brings a tremendous amount of experience in commercial I came into our company.
And we are thrilled to have him onboard and expect that he will harness our current momentum and hell take our growth to the next level.
[noise] there was much to discuss and I'm eager to break down. These many developments in greater detail later in the call.
But first Steve will review, our second quarter financial results I will then review our progress against our three key focus areas for 2019.
Discuss Jack's addition to our team and conclude with the Q and a session.
Dave.
Thank you Larry and good afternoon, everyone.
Net sales were $1.8 million in the second quarter and $3.6 million year to date.
Compared with $1.7 million and $2.5 million for the same periods in 2018.
This represents year over year growth of 7% for the quarter at 43% year to date.
It is important to note that the majority of our second quarter 2019 revenue and all of our year to date growth.
Has been the result of higher consumable sales.
Driven by a sequential increase in the number of life customers.
Predictably 2019 instrument revenue has declined due to the shift toward reagent rental deals that were not available through the second quarter of 2018.
And as we have discussed in prior quarters.
To put this in further context, our instrument revenue was down by more than 50% year over year, while consumable sales grew well north of 125% over the same period.
Cost of goods sold were $907000 in the second quarter and $1.8 million year to date.
Resulting in gross margins of 50% and 49% respectively.
This compares to cost of goods sold $717000 and $1.2 million or gross margins of 58% and 51% respectively from the same period in 2018.
This decrease was the result of one time inventory timing benefits in the prior year, which did not repeat in the current year.
After normalizing for the effective pre FDA instrument inventory previously written off to R&D, our gross margin improved by 300 basis points year to date due to higher consumable production levels.
Selling general and administrative expenses were $12.8 million for the second quarter and $25.6 million year to date.
This compares to $15.3 million and $29.7 million from the same period in 2018.
The decrease in spend is largely attributable to lower stock based compensation expense as most other costs have remained consistent with prior year.
Research and development costs were $6.1 million for the second quarter and $13.1 million year to date.
This compares to $6.1 million at $12.8 million for the same periods in 2018.
We expected this spend to remain relatively flat on a year over year basis, as our R&D programs remain consistent year over year and the small step up in expenses attributable to our respiratory trial wont begin until Q3.
Our net loss was $20.8 million for the second quarter of 2019 and $42.3 million year to date.
Resulting in a net loss per share of 38 cents and 78 cents respectively.
This net loss contained $2.8 million for the quarter at $6.3 million year to date and noncash stock based compensation expense.
Net cash used was $13 million for the quarter.
The company ended the quarter with cash and investments of $137.8 million.
We believe our current cash position is sufficient to execute against our strategic initiatives and continue to expect 2019 net cash burn to be similar to or just below our 2018 at Casper.
I'll now hand, it back to Larry to review, our key commercial results and development updates in greater detail Larry.
Thank you Steve.
As discussed on prior calls we have three principal areas of focus for 2091 market penetration.
To wrap up customer go lives and three new market expansions.
Turning first to market penetration U.S. placements were consistent with our expectations, but shortfalls in EMEA resulted in a lower than anticipated global placement number.
Our 55 net new additions bring our year to date placement totaled to 130 compared to our annual target of three to 400 placements.
Given the strength of our late stage sales funnel the growing level of predictability in our U.S. forecast and typical seasonality that shifts the largest number of placements towards the fourth quarter of the year.
We anticipate sizable placement growth in the second half of 2019, keeping us on pace to achieve our annual global placement target.
And the U.S., we placed 39 net new instruments during the quarter, which despite being a decrease from the prior two quarters was consistent with our expectations. This decrease was the result of two factors.
First over the first two quarters of the year, we built up a large bottleneck of potential customers under two GPL contracts that were executed prior to the introduction of the reagent rental program.
After working diligently with these GPL partners the necessary contracted tandem were put in place in July potential customers, who purchase through these GPS now have the reagent rental contracts in their hands and we anticipate closing multiple deals in Q3 and even more in Q4.
Second many hospitals operate on a June fiscal calendar as a result, several customers in the late stages of our sales funnel have been delaying purchases until their budgets reset for the next fiscal year.
These Q2 purchasing delays our comment anticipated and further position us to have a solid Q3 ahead of the seasonally strong Q4 importantly, our second quarter U.S. placements continue to span all key market segments and contained a healthy mix of evaluation site conversions.
Ken Seitz contracting without any valuation.
New instrument contract signed during the second quarter include academic medical centers.
Yeah hospitals.
Regional community medical centers, and several large integrated health networks.
And as mentioned earlier, we signed the number one ranked hospital in the U.S. Mayo Clinic Rochester.
The addition of mail is a significant development for several reasons first Mayo is among the most if not the most influential hospital in the United States and this will have a positive impact on moving customers.
Through the sales process and attracting new prospects into the sales funnel.
Second up until this moment Mayo has never adopted Asti automation, such as biotech and as always preferred.
To use a manual reference method called lager dilution for its superior accuracy.
This sites adoption is a meaningful step forward in establishing pheno as the new standard of care for susceptibility testing.
Lastly, there was the leading site in the air LG study, providing 400 of the 500 patients enrolled.
While the results are embargoed until the official release at I'd week in October we now know that the data must have been compelling enough for Mayo to acquire and commit to running pheno as its new clinical standard.
In addition to the male Rochester, signing we also negotiated a master agreement, which should accelerate the sales and contracting process for other Mayo sites.
Now turning to our international business.
In EMEA, we added 16 net new instruments during the second quarter. This fell short of our expectations for the geography and accounted for our lower than expected placement number and revenue for the quarter.
The shortfall in EMEA was the result of multi instrument capital deals in two separate geographies that we had anticipated with closed during the second quarter, but instead shifted to the back half of the year.
While disappointing we would largely chalk this up to the challenges and typical lumpiness.
Associated with both distributor sales and multi instrument capital equipment sales and are confident based on our ongoing discussions with both our distribution partners and our customers that these forecasted deals will indeed close in the back half of the year.
Overall, these 55 net new additions worldwide, bringing our year to date placement totaled to 130.
Given the strength of our late stage sales funnel.
The growing level of predictability in our us forecast and typical seasonality that shifts the largest number of placements towards the fourth quarter of the year, we anticipate sizable placement growth in the back half of the year that will keep us on pace to achieve our annual global placement target of three to 400 placements.
Clinical evidence in the form of patient outcomes data remains an important driver of our ability to rapidly increase global market penetration.
This data now spanning over 100, various posters and publications have been overwhelmingly positive and demonstrate pheno is accuracy and ability to drive meaningful clinical interventions.
There are a handful of additional studies in process that we believe will round out this body of evidence.
The first of these studies to read out will be the air LG study the results of which will be presented at the I'd week conference in October .
This study was funded and directed by the anti bacterial resistance leadership group under the National Institutes for health with the purposes of demonstrating that rapid susceptibility testing could enable a narrower use of antibiotics and in turn preserve antibiotics for future generations.
Accordingly, the primary endpoint of this study is time to antibiotic intervention for Gram negative bacteremia is a foundational outcome, which if positive would indicate that pheno results, our trusted acted upon and lead to significantly faster optimal therapy.
In comparison, a study conducted by the same air algae team on Biofire was not able to demonstrate actionable results for this critical patient population.
We expect to achieve the primary endpoint of this study.
The study was not powered to look at mortality or length of stay but these will be evaluated as a secondary endpoints.
And this relatively small sampling of patients largely sourced from may as highly complex patient population. This study is less likely to demonstrate statistically meaningful differences for these endpoints.
In contrast for most patients in particular, those whose infections was the primary reason for hospitalization.
We are confident that the data will demonstrate improved economic and clinical outcomes.
This belief is supported by data coming out of our.
Early customers, which illustrate the fact that rapid interventions occur and are impactful for most patients.
Given that Mayo, which provided the majority of the patients for this study has run the system clinically.
Seeing the resulting outcomes and decided to adopt pheno as its new standard of care, we feel confident that the outcomes of this study will make a compelling case for FY knows broad market adoption.
In addition to the Arrow GE study, we're directing two randomized control trials and one registry study, which are all currently enrolling and are expected to read out over the next three quarters.
These studies are specifically powered to evaluate economic outcomes, including randomized control studies focused on 80 patients and differential outcomes of rapid assay versus rapid I'd interventions.
The registry studies early results were the subject of a poster exhibited at the recent American Society for Microbiology meeting.
The study at this point was only 20% enrolled heavily concentrated to cedars Sinai and not statistically powered.
Since then we have added a significant number of patients from two registry participants the University of Iowa, and University of Arkansas, allowing for proper powering the specific data from the registry is embargoed until a presentation at I'd week.
What I can tell you the data looks great and reflects cedar Sinai his experience as a live pheno customer.
In fact, Cedars lab director went out recently about her experience, but the Pheno stated.
Quote was such a complicated patient population, we have found the rapid susceptibility information generated by the accelerate pheno to be invaluable and quote.
We look forward to the results of these trials and expect that the air LG study the aforementioned registry study and randomized control studies will all be helpful sales tools to drive further market penetration.
Our second focus area driving rapid customer go lives is aimed at helping customers complete the process is required to begin patient testing.
As a reminder, each commercially contracted instrument require several implementation steps before going clinically alive and generating consumable revenue.
These steps include installation and verification connection to the laboratory information system.
And physician and pharmacists training on the clinical pathway is necessary to ensure prompt action based on Pheno results.
Our target for the time from contract signature to go live is four to nine months.
Accounts going live in the first half of the year achieved an average time to go live of six months.
This fall squarely within our target range and reflects our ongoing commitment to crisp execution during the go live process.
We continue to see Multihospital implementations take longer than this six month average due to the need to coordinate installations performed verification testing and create LSW interfaces across multi hospital lab and it teams.
While we continue to make progress on streamlining all components of the go live process.
The sheer number of multi hospital deals we have been signing will cause our current average to trend higher but remained within our target range.
Given this timeline and the number of placements over the past three quarters, we expect a meaningful pickup in consumable revenue in the back half of 2019.
Particularly in the fourth quarter, one slide we continue to see an annuity stream in the range of 45 to $65000 per instrument with us customers at the upper end of the range and EMEA pulling down the overall average.
Finally during the second quarter, we made progress in our third area of focus for 2019.
Rain and executing the registration trials are bacterial pneumonia test for the us market and of our current blood product for the Chinese market.
The bacterial pneumonia tests will be an important addition for us as these serious pneumonias are a costly and often deadly condition. In addition to expanding our available market. This new test will demonstrate the versatility and platform potential of the pheno and its ability to replace significant portions of the current microbiology lab workflow.
On our last quarterly call, we indicated that our preclinical testing generated accurate I'd results and ask T consistent with the reference but that we were not satisfied with the reportability up the results.
We are pleased to report that our team made quick progress in this area and we initiated the final verification study for entry to the U.S. trial.
During verification, we found contamination and vendor supplied molecular reagents and unexpected results.
Accordingly clinical trial plans are delayed while we replace reagents and put mitigations in place to prevent future occurrences.
Consequently, we will likely restart the verification and if all looks good initiate the clinical trial. This quarter. This trial start would still put us on track to deliver this next test kit for our customer base in 2020.
Now I will update you on the progress we have made towards obtaining approval and launching pheno for the Chinese market.
First we continue to reaffirm our belief that China is an important market for Pheno. This quarter, we learned that the Chinese government in response to one of the world's highest levels of antibiotic resistance launched a national action plan to contain antimicrobial resistance.
This plan includes mandating hospital stewardship, and designates funding for selecting and subsidizing the use of novel diagnostics.
Our lead Chinese Col has significant experience in working with the government and is spearheading the national action plan.
He has committed to evaluating pheno. Starting later this year and if successful has the potential to seed pheno at up to 40 hospitals within his network.
This is a great opportunity that requires us to trial and obtain approval for pheno.
Our preparations to initiate this registration trial are progressing well and are tracking consistent with our goal of starting before year end.
Achievement of this milestone would position us to begin selling in China in the first half of 2021.
In wrapping up the discussion on our progress for the quarter I would like to publicly welcome Jack Philips to our executive leadership team.
Jack will be joining us as chief operating officer, initially focused on global commercial operations.
We know Jack well and he has been on our wish list of top commercially oriented diagnostics leaders for some time.
Jack is joining us from Roche diagnostics, where he served as CEO and as president of the North American diagnostics business.
Jacks commercial track record at Roche and before that in his role in growing ventana from approximately $60 million.
To $400 million of revenue is second to none.
And true to form when Jack is in he is all in.
After spending months researching the company and speaking to both current and prospective customers key today committed to the purchase of $1 million of our stock.
We couldn't be more pleased to have such an accomplished diagnostics leader join us to take our commercial execution and in turn our success to the next level.
In summary, while our second quarter placement in revenue results were below our expectations. We are encouraged by our commercial and clinical progress during the quarter and are maintaining our outlook for the year.
We achieved significant operational milestones that position us well for the remainder of the year, including the addition of Mayo clinic to our client portfolio, a sizable backend loaded sales funnel and the addition of Jack to our leadership team.
These factors along with our progress.
In respiratory in China further our confidence that 2019 will be a highly productive year and further our conviction that pheno is the new standard of care for sepsis patient management.
Before beginning our queue and I would like to share a particularly poignant customer story about a seven year old kidney transplant recipient at children's hospital of Los Angeles.
12 days after his transplant he contracted an infection and was immediately put on broad spectrum antibiotics.
Urine and blood samples were taken and sent to the lab to be tested.
Fortunately children's hospital La has the Pheno, which indicated the patients empiric antibiotic therapy would fail and allowed for a life saving antibiotic change.
This case exemplifies the benefits of getting patients on the right antibiotic sooner.
A boy's life was saved with Pheno and a multi hundred thousand dollar kidney surgery preserved.
And with that we would be happy to answer questions from our analysts should others on the call have questions not addressed we would welcome you to send these questions or request for a follow on meeting to investors at a x. Dx dotcom.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session.
To ask a question you May press Star and then one on your Touchtone phones. If you are using a speaker phone. We do ask you. Please pick up the handset before pressing the keys.
So it's all your questions you May press star one too.
Once again that is star and then one to ask a question.
Our first question today comes from Alex Nowak from Craig Hallum. Please go with your question.
Great. Good afternoon, everyone. This is actually will puffins ski on for Alex Today, I guess, you know I'll start off with the menu you see a lay trials coming up here in a couple of months.
I believe a lot of investors eyes are watching that no I don't believe you've seen the data yet.
Can you help to set the benchmark for what we should be looking for you know appreciate the commentary on Mayo coming on board here and what that likely indicates but should we expect to see a length of stay in mortality reduction or is time to optimal therapy really the best metric to watch here. Thanks.
As we said Hey, you're welcome and the.
The metric that the study was powered to prove it was time to optimal therapy.
We do not know what the other endpoints will end up being but we do know that they're not powered.
Two.
Two statistically.
How to show a difference.
Got it thank you understood.
And then you know on policemen C are you pleased looking back to Q4, you placed a 133 systems.
So it's been you know about eight months for all those systems in use how many of them are live today and generating consumable revenue in Q3.
We have a good portion of them live.
What we are seeing though is that many of the Q4.
Placements were multi hospital.
Deals and accordingly, those are on average longer to go line due to the complexity of those implementations.
They are they're hard won deals so it's fantastic to have them and we expect them to go live in the back half of the year here imminently.
Got it that's all I had to think you guys.
Yep.
Our next question comes from Bill Quirk from Piper Jaffray. Please go ahead with your question.
Great. Thanks, good afternoon everybody.
Let's see here, so I guess.
First off.
Larry can you elaborate I guess, a little bit on the Mayo relationship obviously, great to see them come in as reference customer not only just the reputation that they have in the space, but obviously the important role.
That they're playing and the ongoing study with with you CLA.
What is our relationship with Mayo Bill is that what you're asking what I'm trying to figure out Larry is.
There are no other than simply being a customer and they agreed to take on any any sort of reference lab model or rest reference customer.
Relationship at all.
Hi, Bill.
They're they're they're going to be a great customer of ours. We're excited to have them I don't know that there are different than any other customer they they've run the system clinically they liked what they saw and they've chosen to adopt.
I imagine that our salespeople will use there was a reference because they're a great reference I think it will be helpful to us.
But we don't have any.
Formalized relationship with them as a reference customer if that's what you're asking.
Okay now that's that's very clear thank you.
And then Steve.
Can you give us a little bit of color with respect to the actual instrument versus consumable number in the quarter and then if not kind of at what point would you anticipate getting too to the level, where you'd start to disclose that but those metrics. Thanks.
Yeah sure thing Bill.
I guess the thing I would say is that for the third quarter in a row. The vast majority of our quarterly revenue and all of the growth was from consumable revenue and of course with the shift to reagent rental that's predicted.
That was even more the case in Q2 as we saw lighter forecasts. It is direct revenue from EMEA.
Now to the second part of your question. We certainly recognize that this is an important disclosure on a go forward basis and intend to start providing this in the future we haven't determined that a but tentatively in 2020.
Okay got it and then just last couple of questions from me here is anything actionable with respect to some of the new rules U.S. government is rolling out with respect to anti microbial reduction and then lastly, just kind of staying on the government side of things for a moment. We did notice that the Q2 was successful in getting their extra add ons payments.
And I know you two are pursuing that I guess, what's the latest update in that respect. Thanks.
Yes, you bet. So bill we are excited that the government is recognizing the importance of anti microbial resistance theres been a tremendous effort on a large teams part over the course of a number of years.
To achieve that.
They're beginning by providing additional assistance to drug manufacturers and we believe that it will.
Ultimately also flow to those who are doing.
Next generation diagnostics, such as ourselves. So we think the trend is positive and expect some movement over the course of the next quarters, which which would be great.
Secondly, we do and are still.
Going to apply for.
The untapped program.
CMS has not announced when those next round of applications or do we expect that they'll probably do sometime in October or November .
And then the approval would occur.
A couple of quarters after that.
Yes, hi, guys. Thank you.
You're welcome Bill.
Our next question comes from Tyco Peterson from JP Morgan. Please go ahead with your question.
Hi, Good afternoon. This is giuliano tyco, so maybe starting with your outlook for placement in the back half a year I mean I. Appreciate that you expect a significant uptick but just wondering if you could give more color on the relative cater in threeq you and for Q.
And then in terms of the drivers I know how much of the up tick is supposed to come from the TPL contracts that you talked about versus you know a broader adoption across the male clinic network versus you know a broader market adoption post Ah Ah study read out.
Yeah, you bet.
So you know we just got finished doing an exhaustive review sitting down with every single sales person and going over it account by account and I think the back half of our year looks great I would expect.
The next couple of quarters, Q3, and Q4 to look really solid.
And ER and for us to end up with placements or.
Within our range. That's that's my expectation and I would probably expect the the quarters to roll out as they did last year I think we'll have a very solid third quarter and I think we'll have oh.
A jumbo fourth quarter.
In terms of in terms of you know whether the change in those GPL contracts will help that for sure they will.
You know our.
What we're finding in our business is that the majority of microbiology labs are choosing now to purchase on reagent rental contracts and so not having that available to literally thousands of hospitals, I think probably impacted us a bit of having those now on those large gpos, particularly the compliant gpos.
It's really going to give us a another added tool to ensure that the back half of the year is as we have have suggested and and for all those reasons. That's why we reaffirmed our guidance that that will will end up where we said between three or 400 placements.
Okay got it and then for the corridor, how many of those were converts from your email program versus you know greenfield customers and could you remind us how many I still remain on your email program.
Yeah.
We continue to see a really healthy mix of both those converting from evolves and those skipping emails altogether I think the mix for this quarter was more bent to those.
To those skipping the evil.
That's a good sign because the sale process elongated the overall sales process and I think now there is enough evidence that we can largely skip those.
But.
The valves, we continue to run through those and we expect to continue to exhaust that entire funnel, we're not seeing really anybody come out of that.
Got it and then lastly in terms of utilization I know you want.
Maybe not ready to break out a specific around in your numbers, but I think you know according to our model I think current utilization still came lower than we modeled just wondering you know is it because of you know the the length of time. It takes for customers to go lives or is it because oh are you guys seeing any changes in underlying sort of a customer utilization either because if your customer mix or because of other factors.
Yeah. Good question you know as we've discussed our expectation is to have an annuity in the range of 45 to 65000 per instrument.
And that's what we're seeing currently but given the small base.
Quarter on quarter, you can see some differences impacted by mix and what I mean by that is on average fee. When EMEA customers go live they have a relatively lower annuity and then you have.
A little bit of a phenomenon with those that go lives faster are typically those are independent and smaller hospitals. So they have a relatively smaller annuity we expect that coming out of year. When the large integrated health network hospitals go lives that the annuity will.
You don't come come back towards the middle of the range.
Got it thank you.
Once again, if you would like to ask a question. Please press star one.
Our next question comes from Brian Weinstein from William Blair. Please go ahead with your question.
Good afternoon, thanks for taking the questions guys.
A couple so on the multi instrument capital deals in the two Gerry geography is it shifted to the back half of the year.
Can you just go over your confidence that you said you were very confident on getting them, but can you kind of talk through.
What's driving that confidence and then also how big were those did I Miss you say or potentially what those what you were expecting them to contribute in the quarter.
Yeah sure so so.
North America, Brian came in in line with our expectations the Miss was.
Largely AMEA.
And we had we had turnover in Germany, where we had planned on several capital deals and then a large distributor deal that while we could have closed that sooner we held out for better pricing.
If both of those would have happened we would have been in good shape.
The Miss was.
You know 20, plus placements for us that shifted to the back half of the year.
And you know multiple hundreds of thousands of dollars of revenue so.
That's that's the scale of it.
I've I've personally gone and evaluated those with the.
With the the salesperson and I I'm quite confident that we'll get both the German deal and the distributor deal.
But frankly.
The back half of the year for Us in North America and.
In Europe looks really really good so were were enthusiastic and ER and confident that.
We'll be we'll be in good shape.
So as you are building up to this three to 400.
Target for the year in reaffirming that do you still have opportunities that get you to the high end of the range what would that take in terms of are there. Some some hard try to your wins that you have to close or is it just execution on.
A bunch of a bunch of kind of one offs that gets to the high end of the range and you feel that you're angling more to the high end or to the low end.
Yeah.
So there there are a number of I'd ends that we have in our funnel that are in the late stages close to closing and in that regard they do trend towards the higher end.
You know I think.
The good news from my perspective is that I expect for us to end the year with between six and 700 instruments and.
Those six to 700 instruments have a very solid annuity profile associated with them. When those all go live will end the year with something like $30 million to $35 million of run rate revenue I I feel very good about that and.
Our business is about those three things, Brian it's about getting placement, it's about getting those placements live in ensuring that the annuity from those placements is solid and and for US right now that looks pretty good.
Great and then congratulations on bringing Jack and that's a that's a tremendous addition to the team can you be a little bit more specific on what his role will be you talked about commercial operations can you talk to us about.
Some of the specific things that we could be looking at areas that he's working to dig into.
And I don't think he's on the call today. So just what you've heard is kind of what drove him to to to to make this move thanks.
Yeah, you know I I contacted Jack.
You know seven months ago, or eight months ago to make the pits to join us and it and it kicked off this.
Exhaustive process, where Jack reviewed.
All of the available data on our system, our clinical studies spoke to current and prospective customers dinners with the boards of directors.
Reached out to analysts and members of our team.
You know even dose ODP. He enlisted the help of a notable hedge fund to assess our technology in the market opportunity.
And our company and you know he walked away impressed and realized that this was a company that you know it was right at the beginning of an inflection point of the company, where he could learn a lot NAD.
A ton of value and.
That the area, where he is going to add the most value right away is in commercial operations in area that he is best in class. It. So you could expect him to dive into both our our U.S. and North American operations and in North America, I think he's going to build on the momentum that we already have continued to improve it I think he is already noted a few things that he thinks we can do more effectively further his relationships at the you know the.
Highest levels of these major hospital chains can be very very helpful to us and then in Europe .
Same thing so it's about blocking and tackling and building on the momentum that we already have and he is going to be he's going to be great at that and so we expect that Ah. We expect that will help us further have a great year.
Great. Okay. Thank you guys I appreciate it.
You bet.
And ladies and gentlemen at this time in showing no additional questions. We will conclude today's question and answer session.
I'd like to turn the conference call back over to Lawrence Mehren for any closing remarks.
Yes, so so a mixed corridor for sure, but I I couldn't be more encouraged.
Our business at its core is about great people and having just come onboard I believe we'll take our commercial efforts to the next level no thought leaders like Mayo clinic are buying and our funnel looks great I expect a very good year.
So thanks to our dedicated team who everyday are making it happen our customers who are becoming our best salespeople.
Thanks to our board, who knows that we will be the standard of care and.
And to our patient shareholders. Thank you we.
We are on our way.
Ladies and gentlemen, with that we'll conclude today's.
Presentation, we do thank you for joining.
You may now disconnect your lines.