Q2 2019 Earnings Call
Greetings and welcome to the Endologixs second quarter 2019 earnings Conference call.
At this time, all participants are in listen only mode.
The question and answer session will follow the formal presentation.
As a reminder, this conference is being recorded.
This conference is also being broadcast live over the Internet at the investors section of the company's website at Www Dot Endologixs Dot com and the webcast replay of the call will be available at the same site approximately one hour after the end of the call.
Before we begin I'd like to caution listeners that comments made by management. During this conference call will include forward looking statements within the meaning.
Of federal Securities laws.
These forward looking statements involve known and unknown risks uncertainties and other factors that may cause the company's actual results performance or achievements to be materially different.
From any future results performance or achievements expressed or implied by the forward looking statements.
For a discussion of risk factors, we encourage you to review the Endologixs annual report on Form 10-K .
File.
With the Securities and Exchange Commission on April Onest 2019, and subsequent reports as filed by the company with the Securities Exchange Commission. Furthermore, the content of this conference call contains time sensitive information that is accurate only as of the date of the live broadcast August eight 2019, and the logic undertakes no obligation to revise or update any statements to reflect events or circumstances. After the date of this call with that said I'd like to turn the call over to John honest Genco Endologixs Chief Executive Officer.
Sure I don't Genco.
Thank you operator, and good afternoon, everyone and welcome to our second quarter Conference call.
Today I'll provide a brief overview of our second quarter 2019 results and also provide an update on our product portfolio, including a comprehensive update on the status and the approval timeline for E.. That's true also and she does.
I will then turn the call over to our Chief Financial Officer, but seem Abboud, who will review our second quarter financial results and 2019 financial guidance in more detail.
After that we'll open up the call for questions.
As a reminder, we have posted an updated investor deck on our Investor Relations website.
Directly below the webcast link.
I am pleased with our solid performance in the second quarter as our focus on execution continues to drive incrementally positive operational and financial results.
Total revenue grew sequentially in the second quarter, and we had solid contributions from both ovation and if that's true.
As our team continues to leverage positive outcomes data.
Operationally, we had an active quarter that included several developments related to Nellix Alto and she das, which I will discuss in further detail in a few minutes.
Near term, we continue to execute and work diligently to stabilize and grow sales of ovation AFX two.
As I have said before accountability is the centerpiece of our culture and a key factor in maintaining this level of execution I am pleased with the strides we have made in the first half of the year looking forward, we are positioned well to achieve our 2018 financial targets and our team remains committed to sustaining this momentum through the back half of the year.
I will now turn to our quarterly highlights.
Our total revenue for the second quarter was 36.2 million, representing a 19% year over year decrease.
Our U.S. business realized strong sequential growth innovation for the quarter, while continuing to stabilize FX too.
We are effectively managing attrition well continue to make meaningful progress on base business case coverage and increasing our presence with high volume customers.
Our Oh, you West commercial teams delivered a solid first half performance and consistent with the teams in the U.S. continues to leverage our expanding body of clinical evidence to secure cases and gain credibility in the marketplace as we steadily advance into high volume centers.
We continue to make solid operational progress against our goals for operating expense and cash burn and we remain confident that our efforts to strengthen our balance sheet have provided us with additional flexibility as we continue to execute.
Against our long term strategy.
Now I'd like to give you an update on our current product portfolio, including a comprehensive update on the status and timelines related to events to alto, She das Nellix ethics too and ovation.
First turning to the best to I.D.. We are now entering the last phase of Nellix, you've asked to U.S. trial and have 32 sites able to enroll patients with another three sites in the final steps of activation.
Enrollment for the trial currently sits at roughly 70% and we expect to see enrollment increase over the next few months as we approach the maximum number of participating sites.
Our cadence of enrollment has steadily increased since the trial commenced and this pattern gives us confidence that we will complete enrollment of this trial by the end of the year.
Additionally, during the quarter, we announced the reinstatement of our Nellix CE Mark in Europe .
This reinstatement was granted following our submission to our E. You notified body of the latest evidence demonstrating positive outcomes achieved by the Nellix system when appropriately used within the anatomical indications for use.
Couldn't coordinate with our announcements in January of this year.
The Nellix system will be made available for use outside of the U.S. and approved centers.
In a post market clinical investigational study.
Within the U.S. the Nellix system remains an investigational device as part of the E. That's two study.
We are pleased with the reinstatement and we remain confident that when used within the indications for use ipass will prove to be a transformational therapy that can more effectively treat patients with abdominal aortic aneurisms that said, we do not expect the reinstatement of the CE Mark have a meaningful impact on revenues in 2019.
Turning now to Alto, we are in the process of submitting our written responses to what we believe are the remaining open questions from the FDA in regard to our approval submission.
I would like to stress that this is a normal step in the approval process at the FDA analyzes all of the available data.
Our ongoing conversations with the agency have been constructive and collaborative.
And we remain confident in our ability to address the FDA is recent deficiency questions and that alto will receive FDA approval.
However, we will experience a short delay in approval timing relative to our prior expectations.
As we submit our responses to these questions.
We now expect out to approval in the U.S. in early 2020.
Additionally, we are still on track to receive outdoor approval in Europe before the end of the year.
I am pleased to announced that as you hopefully saw in our press release this afternoon.
We have received I'd he approval from the FDA to begin a new pivotal study to evaluate the use of cheap gas in the treatment of AAA and complex anatomies.
This study will recruit 120 patients with complex AAA in up to 50 centers, both in the U.S. and internationally and we plan to begin enrollment in early 2020 .
We are genuinely excited to commence the study as we believe she bass is truly innovative product that will bring more effective treatment to a large segment of the AAA market were only 34% of patients treated received endovascular therapy.
Through limited and highly heterogeneous treatment approaches.
Next I'd like to discuss the distribution agreement with Boston scientific that we announced in conjunction with earnings earlier this afternoon.
We recently signed an agreement naming Boston scientific the exclusive distributor of Endo logics products in China, beginning with a effects too.
But eventually including all of the products in our E bar and E vast portfolio.
China represents a roughly 200 million end user market opportunity for E bar and E bass, and we are excited to partner with Boston scientific.
A company with extensive experience of introducing products for the treatment of vascular disease.
Into this large and strategically important market.
Our teams will work closely together in order to establish a strong E bar and E. that's brand identity in China.
Leveraging Boston's scale established distribution network in the region and proven track record of success in the vascular space.
We also view this as a validation of our technology and our ability to draw the market to us by way of our focus on outcomes data.
We are currently working through the regulatory process in China.
And we will continue to update you on our progress in this exciting venture as we move forward.
Complexity in our business is a function of both products and markets and sometimes we need to make decisions that simplify the business in order to position us better for the long term.
An example of a market based choice. We recently made is exiting South Korea.
We're likelihood of profitability was low.
And primarily driven by reimbursement.
Over the past 12 months, we have shown that we are taking a disciplined and strategic approach.
To our portfolio and to the geographic areas.
That we serve in order to improve execution and profitability.
Lastly, turning to effects to innovation I X as I mentioned earlier aspects to continues to stabilize as our team utilizes a growing body of clinical evidence to drive sales with our customers.
We remain confident that this clinical evidence will continue to prove that FX two produces equivalent overall outcomes when directly compared to other E bar devices, while combining ease of use and anatomically adaptive attributes that customers have valued for many years.
We see an ongoing trend that support aspects to stability in the back half of 2018 at which point, we can turn our focus to growth across the portfolio.
We continue to expect sales of ovation IX to improve over the course of the year.
As we have received very positive customer feedback and continue to build on the case for change based upon 16 peer reviewed publications 12 in the last two years that show large proximal aortic neck diameter is associated with adverse outcomes and that include data from the tronics engage and gore's great registry.
Encore evidence shows that our largest aortic body versus for smaller sized aortic bodies have equivalent performance against four key E bar outcomes.
Freedom from device related Reintervention freedom from rupture.
Freedom from AAA related mortality and freedom from all cause mortality.
While our execution in the first half of the year with solid we recognize that there is still significant work to be done in order to return to sustainable long term growth.
We made several key strides in this regard during the quarter and we remain focused on reinforcing a culture of accountability in order to drive continued on time on budget execution, and rebuilding credibility with customers and shareholders.
In the back half of the year, we remain and maintain our focus on execution, while continuing to generate data that support the superior outcomes of our next generation E bar and Ebasco products.
We are well positioned to achieve our targets for 2019.
And we further our mission to transform a word of care by providing differentiated products that enable superior lifelong outcomes to patients suffering from both in for renal and complex AAA.
And now I'd like to turn the call over to the scene to discuss the second quarter financial results and provide you with details on our guidance.
Thank you John and good afternoon, everyone. Our total revenue for the second quarter of 2019 decreased 19% year over year to $36.2 million compared to $44.7 million in the second quarter of 2018.
U.S. revenue decreased 19.9% to $24 million in the second quarter of 2019.
Compared to $30 million a year ago.
As we noted last quarter the expected decline was driven by the impact of previous commercial restructuring.
And as John mentioned, we are effectively managing attrition, while continuing to make meaningful progress on our base business case coverage, leveraging our clinical data and increasing our presence with high volume customers.
Second quarter International revenue.
Was $12.2 million declined 17.1%.
Compared to revenue of $14.8 million in the second quarter of 2018.
This is largely driven by a smaller or U.S. footprint as a result of the.
Existing smaller less profitable markets last year as part of the reset.
On a constant currency basis, our second quarter 2019 international revenue decreased 14.8% year over year.
On a product line basis, we saw global sequential growth and ovation system sales, which is encouraging as we work towards our stated goal of driving sequential sales growth in 2019.
Sales of FX were down single digits sequentially, but we continue to see tangible evidence of stability.
Second quarter gross profit was $23 million, representing a 63.4% gross margin compared to 66.2% in the prior year period.
The decline versus prior year was driven primarily by a smaller U.S. a revenue number and lower absorption due to lower volumes as we continue to continue our efforts to drive better tons and working capital improvements.
Total operating expenses for the quarter was $32.9 million compared to $45.1 million, a year ago, which is a 27.2% reduction year over year.
Our improved expense management continues to drive operating costs, lower which gives us confidence that we can achieve our previously communicated 2019, opex guidance and reduce our overall cash consumption.
Looking more closely at the second quarter operating expenses on a year over year basis.
Marketing and sales expenses were down 24.6%.
Research and development expenses decreased by 30.2%.
General and administrative spend decreased 36.3% and our clinical and regulatory expenses remained roughly flat as we continue to make investments in our pipeline and work to bring new products to market.
Net loss for the second quarter of 2019 was $27.1 million auto dial it in 62 cents per share compared to a net loss of $23.9 million or $2 than 83 cents per share a year ago.
The net loss for the second quarter of 2019 includes the $11.8 million loss on debt extinguishment related to the debt restructuring we announced on April 1st 2019.
This is a non cash charge that reflects the change in valuation of the amended debt facility with Deerfield, partially offset by a gain on the debt extinguishment related to the exchange of a large majority of the 3.25% convertible senior notes were originally due in 2020.
Adjusted net loss totaled $6.6 million compared to an adjusted net loss of $15.6 million for the second quarter of 2018.
Adjusted EBITDA totaled a loss of $5.6 million for the second quarter of 2019 compared to an adjusted EBITDA loss of $9.3 million for the second quarter of 2018.
Moving to the balance sheet.
Total cash cash equivalents and restricted cash were $52.1 million as of June 32019, compared to $24.7 million as of December 31st 2018.
Our operating cash burn for the quarter was approximately $6.8 million, which represents a nearly 50% improvement compared to our operating cash burn in the first quarter as we benefit from the impact of the seasonality if I spend as well as from our conscious efforts to improve our dsos as a result of better collections.
With year to date operating cash burn of roughly $20 million, we remain on track to achieve our full year cash on target.
As we have discussed previously our $20 million annual operating cash burn target is predicated on a $30 million operating cash burn offset by $10 million of working capital improvements.
We anticipate that our cash burn to improve in the second half of 2019, and we remain on track to reduce our cash consumption in the fourth quarter less than $5 million as previously communicated.
As we have previously discussed we want to give you an update on our debt to equity conversions and resulting from the financing deal announced in April of this year.
As part of that deal up to $50 million of hard at $25 million. It's like 2024 can work holders and $25 million. The Deerfield was subject to a mandatory conversion to our common stock.
These mandatory conversions happen when certain conditions are met.
We are happy to report that we converted approximately $3.3 million of our debt in the second quarter that resulted in us issuing approximately 500000 additional shares.
These new share issuances are included in the 17.4 million shares outstanding at the end of the second quarter.
As of July Onest 2019, an aggregate of approximately $42 million of the original $50 million remained subject to these mandatory conversion features.
Our overall debt is down approximately $8 million in the second quarter.
We will continue to provide updates every quarter, if and as these conversions happen.
Now turning to guidance, we are reiterating our previously provided guidance.
And 2019, we continue to expect revenue of at least $140 million, while operating expenses are anticipated to be in the range of $130 million to $140 million.
For the third quarter of 2019, we expect revenue between $35 million and $37 million.
This reflects the seasonality of the third quarter, but our goal remains to drive sequential growth in the third quarter.
Overall, our second quarter performance down the PML provides a great base for the rest of 2019.
We are pleased with our performance in the quarter and remain committed to executing on our strategic priorities that we laid out at the Investor day in October last year, especially our cultural transformation focus on accountability and the high say do ratio.
And with that I'll turn the call back to John .
Thank you the scene this marks the fourth consecutive quarter since our reset one year ago in which we delivered on our commitments for revenue operating expenses, while addressing the near term balance sheet overhang.
We continue to work collaboratively with the FDA as we adjust out to approval to early 2020 and are excited about the approval of the Chivas I'd E. In what will be a landmark study in the category.
We're also excited about our new partnership with Boston scientific.
And the valuable work, we will be doing together in China.
We are pleased with the reinstatement of the CE Mark for Nellix and reaffirming our commitment to eat as to where we are entering the last phase of enrollment.
Finally, we believe that a effects to stability is on track in the second half of this year on the heels of sequential growth in the ovation platform globally.
Our ability to secure new users in high volume centers is taking hold with promising early results with that we will now open the call for questions operator.
Thank you well now be conducting a question and answer session.
If you would like to ask a question. Please press star one on your telephone keypad a confirmation total indicate that your line is in the question queue.
You May press star two if you'd like to remove your question from the Q4 participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we pull for questions.
[noise].
The question first question is from Matthew Blackman Stifle. Please go ahead Sir.
Hi, good afternoon, everyone I'm, if I could start maybe in China, what do you need to do exactly to get regulatory approval, but it doesn't seem like with a 2021 timeline for commercialization.
There would be a significant trial or new clinical data requirement. It just I just wanted to make sure and John you gave us the size of the market just remind us how many players are in the Chinese market, who is there is a market growing and any color on the economics of the distribution agreement for you and then I've got one quick follow up.
Well thanks for the question.
As you.
Most certainly know there is the clearance that accompany needs to achieve just like with any country or region.
But then even after clearance you'd need to enable that you need to establish yourself on regional tenders in China.
And then finally after establishing regional tenders you need to achieve local hospital listings in order to ultimately commercialize the product that takes time.
Thats the reason for the timeline that we've cited.
The players in China include.
Obviously the.
Players that.
Art in the us and rest of World Medtronics Gore Cook.
In addition, there was microport, which competes in China.
And there's a number of local national players within China.
To make it obviously, a fairly competitively robust country growth rates are.
In excess of.
8% on a year to year basis.
It continues to be a very attractive market in terms of the percentage of cases that remain as open procedures versus endovascular procedures and like the rest of the world complex is the largest unmet opportunity.
With with virtually less than 30% of those cases now being treated to an endovascular approach.
Okay that was that was really helpful. I appreciate that.
And then just shifting to to Alto, how impactful is this delay not obviously so much on 2019, but as you likely still going to undertake a controlled launch without going next year does it dampened at all how you're thinking about the growth outlook for 2020, and I guess relative to your comment about being able to grow above market in 2020, how should we think about this delay relative.
To that commentary and thanks, so much.
No by my pleasure and thank you for the question again, Matt. So you know as Ive message previously.
We are going to introduce alto.
In what I would generally describe as a crawl walk run fashion job. One is to first establish use proficiency beginning with our current ovation IX customers then its to expand to use with existing Ais iocs customers that are using IDEXX infrequently and then ultimately it's to expand use in high volume centers.
That gives you a sense of kind of the perf purposeful and stepwise progression through the introduction.
This delay does not represent a material financial impact to Endo logics.
In either 2019 or.
In the way we are considering in terms of assumptions for 2020.
All right. Thank you guys.
Thanks, Matt.
The next question is from Richard Newitter.
Speedy Leer Nick Frank.
Hi, this is Jamie on rents.
Quick question to start you guys are kind of signing.
You bet, you're still effectively managing the attrition and just curious.
Did that impact.
Sales in the quarter because it seems like you guys are saying that it took a step down this quarter, but you're still expecting to stabilize in the back half can you just share.
A little bit about what happened in the quarter.
Do you still consider the sales force they are stabilized and.
How should we think about that.
Trending.
Between Threeq and Fourq yet.
Jimmy Let me take a crack at it and John can kind of follow ups listen I think from an attrition perspective, I think we've done a good job managing it all through the year, especially post the reset in my comments when I talked about FX that it was a steady decline it was actually a decline that was better than expected on FX.
Especially here in the U.S. So again, if you remember what we had talked about that what we effectively want to do is stabilize FX in the U.S. and the definition of that stability is that we would expect to see revenues from Q2 equal Q3, and Q4 as a sign of stability and on the heels of that stability, we would have sequential growth on ovation.
That would lead us to growth in the second half of the year. So really we're on track to do that the FX performance was better than expected here in the in the second quarter.
And the third quarter and the fourth quarter on the heels of that flattening of the FX business.
As I mentioned on ovation continues to drive sequential growth and we had double digit sequential growth with ovation. So listen I think the product lines are doing as expected here and we continue to March that path towards growth in the second half of the year.
Yeah.
Okay. Okay, and then just one follow up on gross margins. It came in better than we were modeling and I think the street as well. So just curious how we should think about that trending over the back half of the year I think previous commentary was saying that it should step down for the remainder of the year I'm just trying to get a sense of if the sequential step down between the first quarter and second quarter is a fair way to think about it in the back half of the year as well. Thanks.
Absolutely so listen I think as we invested in the past them exactly the same pattern as last year, it's kind of the way our business has been kinda upgrading especially with some volumes that we have seen in the declines so really the 63.4% gross margin was down 2.7% worse than last year and it was down 1.8% versus the first quarter and really the delta there between the expected performance and the actuals has been some of our.
Manufacturing variances and the fact that we continue to manage our cost better through the supply chain. So what we would expect to see is this these revenues to kind of continue to Saudi the gross margins to stabilize in the in the third quarter and then have a big decline in the fourth quarter essentially when we turn our inventory on the variances actually have blown through the piano so.
Again, we're not changing the previously message gross margin in the 60% range for the door here.
Thank you.
Yeah, you're welcome.
Our next question is from Joanne Lynch.
Be ammo capital markets. Please go ahead ma'am.
Yes, Hi, this is Matt Henriksson in for Joanne I'm, Congrats on the nice quarter.
Just diving a little deeper into the international results.
I heard the commentary about how the markets that you exited over the past 12 months was a contributing factor, but when you look at the first quarter results in international they were kind of flat and so I'm kind of trying to figure out what made the first quarter results better than the second quarter results there.
You mentioned the exiting of the South Korea market did that have an impact and how was the momentum in Japan. So far.
Sure Matt again, as we had mentioned.
That 12.8 number that we posted in the us in the first quarter. We had said was going to be the peak of the number and we would continue to see.
Declines in that business. The second quarter number is 12.2%, which is down 18% is purely the seasonality of our spin off our.
Revenue and also some timing of our distributor orders in the second quarter of last year. So.
We expect that number to kind of again stabilizing at that 12 to.
$13 million number for the remainder of the year and again, we should expect to see some better comps on the heels of the restructuring in some of the exits that we did in the second half of last year.
So like I said I expect to see some positive visa and the international business year over year, but at the same time on a dollar basis I don't think you'll see any acceleration beyond the numbers that we have been at or the second half the first half.
Okay, and then just anything on the South Korea exit, how that's going to potentially impact the second half.
Yeah, So really no change no impact on our guidance I think as John said, we continue to look at US a business on a portfolio basis on being opportunistic as you hear the news about China.
You know being opportunistic to get into the second largest market outside of the U.S., but at the same time in the less profitable markets, we're continuing to.
Monitor these markets were doing ability if the growth and the profitability of these businesses and Korea was a great example of where the business case did not make any sense in light of the lack of reimbursement in that market and we decided to pull out and restructure that business in the first quarter in the second.
Okay and then just my follow up question.
You were in the 12 months now of restructuring.
What have you what have your viewpoint spin of the market have you still seem kind of that mid single digit growth in traditional.
AAA with high single digit growth in the complex cases and then.
How is the competitive landscape change during those 12 months, thanks very much.
The.
Market growth rates are ours are in line with what you just recited Matt.
Not a significant change there.
You know competitively we continue to see.
Gore advance its competitive position globally.
At the.
At the expense of Medtronic as well as Cook.
There are clearly signs that as we approach more high volume customers.
The long term outcomes and evolve our continue to surface as an important conversation.
And our focus on making an impact a positive impact on those long term outcomes.
Are resonating well with those customers and so.
Again, I think I think we are.
Making our advance with our differentiated products on the back of evidence.
Then that evidence we believe is what's going to make a meaningful difference in not only the uptake of our products, but the.
But ultimately the long term outcomes that they.
Favourably represent.
Okay.
The next question is from Robbie Marcus JP Morgan. Please go ahead.
Mr. Marcus your line is open.
Hi, sorry can you hear me.
This is Alan Alan.
Sorry about that I just had a quick question on China.
I guess why you guys are going out with a FX, but given the kind of strong uptake that you've been seeing with ovation I guess I just wanted to dig a little bit into your rationale behind maybe going with a effects over ovation as your first device in that market and given that you are going with a effects. How quickly do you guys think you can get ovation.
Also out in that market.
Hey effect, we've been working on a FX two in China for a bit of time.
We think it's an important product to enter the market with.
As Weve decided globally. It is a product that has been oh started by our customers is very easy to use and adopt.
We think thats important in establishing our initial footprint.
And then on the heels of that we certainly want to prepare for submissions in our subsequent product portfolio.
But again, it's it's a step wise entry beginning with a effects too.
Got it and then I know, China, probably is not the only geography that you guys are looking to enter is this kind of distribution agreements something that we should expect to see more of or is China just days.
It's pretty well known that China has a fairly difficult kind of environment for getting approvals and we're going to succeed commercially. So is this a china specific strategy or is this something that we could see in other all U.S. markets as well thanks for the time.
My pleasure. Thank you for the question now so you know.
Markets the size of Japan markets the size of China.
It is it became clear to us that in order to.
The effect of our presence, we really had to do it with a sizable partner.
So the complement of our differentiated portfolio could be met with a significant footprint presence and immediate credibility, which in Japan is represented by JLL. Today are most commercially productive partner a terrific partner to work with and now featuring Boston scientific in China.
Yeah, there's there's one thing to enter the market it's quite another to in essence have reach in that market that is going to be meaningful and not take a long period of time. The way. We you would otherwise think of local regional distributors in in in in typically smaller markets. So it was very purposeful that we needed to have a partner who could effectively compete against the likes of work cooked Medtronic and microport and others.
In order for us obviously to realize the benefits of that large market in terms of other markets that we would consider it. So it's again part of our ongoing portfolio conversation.
Be a products or markets.
Oh, no nothing more to report on our thinking beyond.
Oh, you know how valuable it is to to enter with scale.
As a reminder, if you wish to ask a question or have a follow up question Press Star one on your telephone keypad Thats Star one.
We have a question from Matt O'brien Piper Jaffray. Please go ahead Sir.
Hey, Thanks, guys. This is Kevin Farr, she on for Matt O'brien. My first question is I'm I'm just looking at the results you mentioned that in the.
Throughout the year very impressive as you increase sequentially for the last four quarters. In addition to the outlook for Q3. So just wanted to tease out some of the factors here as we're in the middle of the year. So one can you share the growth rate on ovation in the quarter I know you mentioned FX.
It was down single digits in serious within that platform did you see some more engagement post Charing Cross and Encore and then secondly in addition to that less attrition are you seeing rep productivity improving thank you.
Yes, so Kevin listen first of all.
We havent given out product line details or the actual growth rates kind of midyear, we do that as a matter of process at the end of the year. So that you guys can get your models right like I said, we did have a low single digit decline in the U.S. on FX, which was I think really.
Better than expected and then U.S. ovation was actually up double digits.
So we really really happy to see the sequential.
Performance on on the on ovation to be that double digit growth rate. So it continues to take market share from the underlying business continues to strengthen.
And that's also a function of a lot of the work that's happened in the in the second half of last year with the restructuring and actually.
You know all of the retention plans and the actual underlying execution improvements that we made here in the first half of the year. So John I don't know if you want to add to that yeah, Kevin I think.
It's important to perhaps add a little color around.
The first half.
We secured in as we've been messaging this march up market in the first half we secured actually 77, new users and we defined a new users.
As physicians, who have either never done a case with us where it's been over a year since they've performed a case.
Those 77, new users completed a 106 cases with us.
And 59 of those.
Came from.
44, new users, who practice in our up market targets of both innovative in performance hospitals.
So.
You know again, we've made a purposeful effort and it's slowly starting to reflect in progress in using not only their differentiation of our product, but as importantly, or more importantly, the value of our encore data in order to appeal to the need of producing more durable long term youve or outcomes.
Thank you I really appreciate the detail. My second question is jumping back to the ovation Alto moves moving that back when the question do you have any just high level I know you can share everything but any high level thoughts just on the visibility you have on when the questions. My wrap up how did you get to early 2020 for that and then I have one follow up.
Hey, Kevin its Matt Thompson, So just to give you some color on the.
Outside pay am I, so I think everyone knows that.
My reviews or was a very very good and collaborative process with the FDIC.
And it's really not unusual tool for the FDIC to have a number of questions towards the end of the pay him I am, particularly the 130 meetings. So we have some open items at the moment that we're working through with very competitive we have good offices for all of our open questions, but we will need to submit those formally to the FDI and we're hoping that we can get the clock restarted again.
In Q4 this year at the moment I can't really share any details about the specific nature of those open question sorry.
Okay. That's helpful. Thank you and then I wanted to touch also on the clinical side as he that's too easy you guys moved it back a little bit and I know, it's it's not by much but anything to point out there and then with that study enrollment on the the reinstatement of CE Mark that you got back in June .
Where you showed the outcomes on protocol were much better this could be a stretch, but do you think thats going to bode well for enrolling Ci that's in the U.S. faster than you had expected originally with more awareness of the therapy. Thanks, so much.
Yes, so Kevin let me give you some color on leave us to to start with so as John said in the prepared remarks, we are coming really to the final aspects of that trial at the moment. We've now really currently goal the most sites than we've ever had in the trial and we expect to see enrollment increases we trying to get to the finish line. There were about 70% enrolled in the trial at the moment and so we've got a really good line of sight.
To to finishing that.
The CE Mark is of course or how.
Having an independent all forward say actually review the submission we sent them and get confirmation that the results of the platform when used.
According to the anatomical indications for use is encouraging that certainly has given a little bit of an extra confidence boost to the best two sites in the US who are now able to have.
Very detailed conversations with their patients with regard to treat you've asked you know it's kind of really too early.
To say anything there about enrollment rates were obviously very pleased.
Many years of hard work have come to fruition with approval of the idea of the pivotal study. We are very excited about entering into the complex space, where as we know.
Thats relatively few alternatives.
The movement to treat these patients on label.
You can expect us to give you some color.
I'm sure you've heard us and its potential milestones going forward.
Thanks, so much.
There are no further questions at this time I'd like to turn the call back over to Mr., Alan Genco for closing remarks Mr. on chuckle.
Thank you very much operator, and thank you all for joining us for the <unk>.
Q2, 2000, and I can call look forward to updating you with Q3 in the near future. Thank you very much.
This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a good day.