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spk01: Ladies and gentlemen, thank you for standing by and welcome to the Exonix Quarter 3 2021 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to turn the call over to Mr. Neal Valadkar to host our conference today. You may begin.
spk05: Thank you. Good afternoon and thank you for joining Exonix's quarterly results and update call. Presenting on today's call are Raymond Cohen, Chief Executive Officer, and Dan Deren, President and Chief Financial Officer. Ray and Dan will provide prepared remarks on financial results, commercial progress, and a general business update, followed by a Q&A session. Before we begin, I would like to remind listeners that statements made on this conference call that relate to future plans, events, prospects, or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. While these forward-looking statements are based on management's current expectations and beliefs, these statements are subject to a number of risks, uncertainties, assumptions, and other factors that could cause results to differ materially from the expectations expressed on this conference call. These risks and uncertainties are disclosed in more detail in Exxonix's filings with the Securities and Exchange Commission, all of which are available online at www.sec.gov. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today's date, November 4, 2021. Except as required by law, Exonix undertakes no obligation to update or revise any forward-looking statements to reflect new information, circumstances, or unanticipated events that may arise. I'd now like to turn the call over to Ray for his remarks.
spk08: Thanks, Neil. I'd like to welcome everyone joining the conference call this afternoon. In the third quarter of 2021, despite significant disruptions to our business from COVID-19, Exxonix generated net revenue of $46.9 million, representing 33% growth compared to the prior year period. When we held our second quarter conference call on August the 5th, we noted that a modest number of cases had been canceled in July and early August, and that our 2021 guidance assumed no further deterioration in elective procedure environment during the quarter. Unfortunately, a significant increase in COVID-19 due to the Delta variant led to cancellations and deferrals of numerous S&M procedures in the third quarter. Some patients were reluctant to undergo a procedure and canceled their external trials and or permanent implants. More impactful were the dozens of hospitals that restricted elective procedures due to a relocation of resources to the ICU, and more recently, the impact of nursing shortages across the country. These factors became more prevalent in August and continued into September. Many states were disrupted with a widespread impact in the southeast, with major markets such as Florida and Texas being particularly impacted. While the COVID infection rates have gone down, the pandemic and staffing shortages continue to impact our procedure volumes in October. As such, we have revised our fiscal year 2021 revenue guidance to $177 million, which Dan will discuss further in his prepared remarks. So turning back to the third quarter, second home modulation revenue was $40.1 million, which was flat sequentially. We consider this to be a solid and respectable result considering the Delta variant headwinds, summer vacation seasonality, and the other factors that I previously mentioned. We continue to add new accounts in the quarter, and we estimate that our market share held steadily or in perhaps even grew modestly. BulkMed revenue was 6.8 million of which 57% or 3.9 million was generated in the United States. It's clear that this fast and easy office-based procedure is significantly more insulated from the COVID surge as compared to sacral no modulation and other facility-based outpatient elective procedures. Physician response to BulkMed has been overwhelmingly positive. And as anticipated, the expanding offering has elevated exonics' stature within the urology and urogynecology community. While we see only modest growth for BocaMed in international markets going forward, we expect robust growth in the United States to continue for years to come, given how highly undertreated stress urinary incontinence is. Over the last four months, we have expanded our commercial footprint in the United States by adding more field-based salespeople and clinical specialists. Our U.S. field team now numbers 260 people. Over the last few months, we've also hosted over 325 physicians at six regional seminars to introduce Bulkamed and provide proctored wet lab training. The seminars also provided us with an opportunity to introduce our cyclone modulation system to physicians who are not yet our customers and have them hear firsthand from their peers who have already experienced the difference of working with exonics. The positive feedback from attendees has been exceptional, and we fully expect that these efforts will pay dividends for us in the quarters ahead as more physicians begin implanting exonics for their patients suffering from bladder and bowel dysfunction. On the product development front, As previously announced in late June, we filed a PMA supplement with the FDA for our newly developed, long-lived, recharge-free sacral neuromodulation system. We're engaged with the agency on an interactive basis and continue to anticipate receiving FDA approval during the first half of 2022, at which time we fully expect to begin shipping the new non-rechargeable S&M system to customers in the United States. We're confident that the introduction of a recharge-free device will continue to drive market expansion and advance us on our path to cyclone no modulation market leadership. With that said, I'd like to turn the call over to Dan to review Axonix's third quarter 2021 financial results.
spk03: Dan? Thank you, Ray. In the third quarter of 2021, Axonix generated net revenue of $46.9 million. This represents an increase of 33 percent compared to $35.2 million in the prior year period. Sacral neuromodulation net revenue was $40.1 million, of which $39.1 million was generated in the United States and the remainder in Canada and select European markets. VolcomEd net revenue was $6.8 million, a sequential increase of 21 percent compared to the second quarter. the U.S. accounted for $3.9 million, with $2.9 million coming from international markets. Gross profit for the third quarter of 2021 was $31.2 million, representing a gross margin of 66.5% compared to 61.9% in the prior year period. Total operating expenses for the third quarter of 2021 were $47.7 million, Included in operating expenses are $6.7 million of stock-based compensation expense and $2.2 million of intangibles amortization. Operating expenses totaled $30.6 million in the prior year period. Net loss for the third quarter of 2021 was $17.3 million, compared to a net loss of $9.2 million in the prior year period. Cash and cash equivalents were $228.8 million as of September 30, 2021. Turning to guidance, we are closely monitoring the ongoing impact the COVID-19 pandemic and staffing shortages are having on elective procedure volumes. Our updated guidance is based on what we are currently seeing in the field and incorporates our expectation that we do not anticipate much of a recovery in elective procedures in the fourth quarter. We expect fiscal year 2021 total company revenue of $177 million, representing growth of approximately 59% compared to fiscal year 2020. We expect fiscal year 2021 S&M revenue of $155.2 million, which represents an increase of 39% compared to fiscal year 2020. we expect fiscal year 2021 BulkMed revenue of $21.8 million. In the fourth quarter, total company revenue is expected to be $49.8 million, an increase of 43% compared to the prior year period. Fourth quarter S&M revenue is expected to be $42 million, an increase of 21% compared to the prior year period. Finally, Volcomed revenue is expected to be $7.8 million in the fourth quarter. I will now turn the call back over to Ray for additional remarks.
spk08: All right, super. Thanks, Dan. Many of you that have been following Exonix for the last few years know that as of today, we've reached the two-year anniversary of the FDA approving our rechargeable cyclinomodulation system and the company launching commercial operations in the United States. So before we move to Q&A, I would like to spend a few minutes discussing the sequenomodulation market, where we are today and where we see things going in the years ahead. From the time of Exonix inception, we have consistently said that bladder and bowel dysfunction is underreported, underdiagnosed, and significantly undertreated. In each physician practice, there are hundreds of patients that have been differentially diagnosed with urinary fecal or mixed incontinence. Many of these patients have taken prescription drugs to treat overactive bladder with limited success. In fact, clinical literature indicates that over 80% of patients who are prescribed drugs discontinue these meds within six months. Over the last two decades, millions of patients have been suffering in silence or simply decided not to pursue cyclinomodulation therapy due to lack of awareness and shortcomings of the legacy offering. Moreover, for many physicians, cyclinomodulation was viewed as a therapy of last resort, given that the need for replacement surgeries every few years and lack of MRI compatibility and less than optimal efficacy and fussiness of the incumbent's product all conspired against growth in the market. In November 2019, our introduction of a bespoke, fuss-free, long-lasting, MRI-compatible device changed the landscape for sacromodulation therapy. Exonix made S&M an attractive therapy proposition for patients with physicians discussing the long-term benefits of sequenol modulation more often with their patients. We continue to hear from clinicians that more of their patients are saying yes to sequenol modulation therapy than ever before. Our commercial success the last two years has been grounded in significantly improving the quality of life for patients and providing physicians exceptional support. On the marketing front, to increase awareness of sacromodulation, we have invested in a combination of activities, including Facebook ads, paid Internet search, and search engine optimization. We continue to partner with practices to identify patients that have been previously treated with drugs or Botox that are eligible for sacromodulation therapy. We have worked with our customers to support mailings from those physicians to their own patients, We've been engaged in doing some local print advertising and some short TV spots. Our messaging now includes offering solutions for all types of urinary incontinence, regardless of whether it's stress or urge incontinence. We believe this will increase our response rates, lower cost per lead, and drive even more patients into practices of the physicians who are loyal to exonics. We're also working on launching a television marketing campaign in early 2022, and we will continue to invest in these efforts for the foreseeable future. It's clear that psychonome modulation is experiencing a renaissance based on new and effective technology in the marketplace. We fully expect psychonome modulation to become the preferred third-line therapy for patients suffering from overactive bladder. As such, we continue to believe the S&M category is poised to expand into a billion-dollar-plus business annually in the United States in the next few years. More specifically, we estimate that the current U.S. sequential modulation market is around $700 million. We expect the market to sustain mid-teens annual growth for years to come, which would result in a U.S. S&M market doubling annually. to around $1.5 billion in 2026. With this level of market expansion and Exonix continuing to add customers and capture more share, we're confident that our S&M business can achieve durable sales growth of at least 25% per annum for years to come. And if COVID is defeated, perhaps we can grow at even higher rates in the near term. In closing, we remain grateful for the trust physicians, patients, and shareholders have placed in exonics. We'd also like to thank our field team and our colleagues in Irvine for their diligent efforts and dedication to fulfilling our mission of improving the lives of patients suffering from incontinence. So at this time, we're happy to take questions, and we'll turn it over to the operator.
spk01: As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A question. Our first question comes from the line of Adam Mayer from Piper Sandler.
spk10: Hey, guys. Appreciate you taking the questions here. First one for me, would just like to, I guess, better understand Q3 inter-quarter trends and kind of how the business progressed over the course of Q3. I mean, it sounded like If I heard correctly, the COVID impact grew throughout the quarter, but I was hoping you could just give us a little bit more granularity there in terms of how the business progressed throughout Q3 and then into October as well.
spk08: So, Adam, thanks. Thanks for your question. You know, we haven't been providing monthly statistics to date. I would say that There wasn't anything unusual in terms of the progression of revenue throughout the quarter. Clearly, or maybe that's not obvious, but September was obviously better than July and August. And October was slightly better than October. Excuse me, October better than September. So that's kind of the trend. So things are trending in the right direction. Uh, but yet, um, you know, it's not, uh, you know, we don't have a clear field at this time and we continue to see problems occurring in different parts of the country and things are moving around now. Right. Whereas before in Q3, it was all about what was happening in the Southeast. And now we have issues that are occurring in places like Washington and Oregon and Colorado and other places in the Midwest. So this is kind of like a rolling blackout with this COVID impact. Uh, and, um, you know, we're, we're as anxious as you could possibly imagine. to have, you know, this kind of dissipate so that we can get into a situation where, like in Q2, where things were more normalized from an elective procedure standpoint.
spk10: Sure. That's helpful, Ray. I appreciate that. And then just for the follow-up, wanted to ask a little bit about potential backlog. I mean, it sounds like there were a chunk of cases that were, you So maybe just talk about kind of the backlog that accumulated in Q3 and how you see that kind of being worked down in subsequent quarters and what, if anything, is included in the Q4 outlook. Thanks so much.
spk08: Yeah, thanks, Adam. So, look, we have not included, you know, a backlog in terms of the guidance that we articulated here to close out the year. We're trying to be really conservative here, Adam, in what we are anticipating in Q4 and And if it turns out that some of those patients that canceled their external trials or permanent implants, particularly the permanent implant patients, then that could be helpful. And we could see that accrue to our benefit in Q4. But we haven't done a detailed analysis and to try to get in the minds of some of these patients who have deferred their procedures. And also it's difficult sometimes to make distinctions between patients that have deferred a procedure for their own concerns versus what's happening in the institution that they would be getting that procedure done. So it's really a mixed bag out there. And we're just doing the best that we can to predict what the company can do in an environment where there's external factors that we absolutely have zero control over.
spk10: Sure. Thanks, Ray. I appreciate you taking my questions. All right, Adam. Thank you, sir.
spk01: Our next question comes from the line of Bob Hopkins from Bank of America.
spk07: Oh, thank you, and good afternoon. Hey, Bob.
spk01: Hey, Ray.
spk07: How are you? Good. Sorry to just jump right in. Are you really seeing – you know, here in October, parts of the U.S. kind of going in the wrong direction now?
spk08: No, let me just be clear about that. No question.
spk07: Yeah.
spk08: And I think, you know, we don't want to be the COVID criers, right, or the people that are trying to, you know, define this. And we continuously seem to find ourselves in this mode. But, you know, when I'm getting, you know, emails from the field saying, from our salespeople through our sales management team about the fact that, oh, we just lost four cases in Oregon because of this hospital shutdown, or the entire state of Idaho right now has put a kibosh on elective procedures. These are the kinds of things that are coming to us, and they're coming regularly. It's just that the names and the places are changing. But, you know what I mean, it just hasn't abated. It's just moving around. One could say that, obviously, Q4 may not look quite as bad as it did in Q3 just because we're no longer talking about the southeast where things have really settled down quite a bit. But, you know, not out of the woods in a lot of these locations. So, once again, we're really... not trying to make any excuses. And, uh, we think that, um, you know, considering, uh, what we're able to accomplish in Q2 and the fact that we basically posted the same number for cyclone modulation in Q3, uh, with all these factors, uh, we take that as a win for the company. And then obviously both of that, you know, continues to march along really unabated and unaffected by this pandemic.
spk07: Okay. That's helpful. Thank you for that. Um, um, And I guess the other question is, given that we're going to end 2021 at a lower level than you originally thought, does that make you a little more conservative, or do you think the streets should be a little more conservative in how they model 2022 growth as a result?
spk08: So I think that what we tried to do is lay some breadcrumbs with this 25% kind of solid growth. And we're thinking if the market's growing at around 15, these are just estimates, And it could grow a lot faster, once again, if we get rid of this COVID problem. But we think despite that, we will grow faster than that and grow at about 25%. So if you kind of run those numbers, I think you see that it's not that far off, certainly from what the 2022 consensus was. And we kind of catch up over the next couple of years. So look, if we can just get these clouds to lift a bit, then we can overachieve. But I think it's, at this point, prudent for us to be conservative and not kind of get over our skis because we're dealing, you know, in an environment that's difficult to control. Okay.
spk07: And with that 25%, that's a total company, not a sacral nerve modulation, just to be clear?
spk08: Just S&M. Yeah, just S&M. You know, the Volcomed stuff. I mean, that just continues to surprise us in a positive way, right? You know, it's... you know, given that so many of these procedures, you know, Volcomed can be done in the office, and so you don't have the same patient reluctance, plus the product is hot, and, you know, people are really excited about that. So I think if you notice that we even increased incrementally the guidance for Q4 on Volcomed, and if I, Neil's sitting right by me, but I think the consensus is $32 million for Volcomed in 2022, and you know, that seems like a number that we should beat handling.
spk07: Excellent. Thanks for the call, Ray. I really appreciate it.
spk08: Thanks, Bob. Thanks for joining our call. We appreciate that.
spk07: Yeah, we certainly had our choice. All right. Thanks.
spk01: Our next question comes from the line of Michael Pollack from Baird.
spk09: Hi, good evening. Good afternoon. So I'll follow the lead on 22 and say numbers so you don't have to. Two ways to do this. The guidance reduction this year, $10 million in total. Consider that for a half year of business. If I annualize that, that's $20 million. So streets numbers should maybe come down by $20 million revenue next year. That takes I see 255 to 235. The other way to do this is to take the new guidance and take bulk amid to 30 million and then grow the S&M number 25% consistent with the commentary tonight, and that gets me to 225. So my range for next year total company revenue, 225 to 235. How did I do?
spk08: I think you did pretty good. I think you're a little light on the bulk amid side. You know, you rounded it down to 30. Consensus is already 32. And, you know, we'll definitely beat that number. But, you know, it's a pretty good range.
spk09: Yep. Okay. The other is the follow-up. Yeah, sorry.
spk08: Mike, but with the caveat, right, this is we're guiding now based on the fact that COVID still is present in the market. the elective procedure environment is still restricted, that we've got staffing shortages, we've got hospital shutdowns, we've got all these factors. So I think the point is we don't want to be the company to say, well, we're not as confident about the future, about our business, and this to be misinterpreted. All we're doing is saying, look, in the current environment, which we have fundamentally lived through, with the exception of four months when we first started and launched our product in November of 2019, our entire business and everything we have done has been under the COVID cloud. So we're just trying to be realistic about what's going on right now. And I think the mistake that we may have made earlier is that we assumed that the COVID clouds were going to lift, right? And that's why we find ourselves in a situation where now we're having to reduce the guidance And, you know, I regret that we did that. But then again, you know, we're all been optimistic and I think surprised that, you know, for many reasons, you know, this COVID situation continues to persist.
spk09: Very clear. If I may, a follow-up, a tidbit question. Curious, appreciate all the detail on the seminar attendance for BocaMid, quantifying the number of docs. Do you Would you hazard a number of docs that did a Bocomid implant in the U.S. in the third quarter? Just be curious for what that number is. Injection.
spk08: Yeah, no, that's a good question. We don't have that level of detail in terms of analytics yet. We've been focused much more, of course, on the S&M stuff because we have many quarters in which we can run these analytics. But there are, I mean, off the top of my head, I would say that it's probably at least 400 physicians, maybe more, that are currently using Bocomet. Thank you so much. Thanks, Mike. Appreciate your questions.
spk01: Our next question comes from the line of Larry Bigelson from Wells Fargo.
spk04: Hi, it's Leigh calling in for Larry. And thanks for taking my question. Just first one on growth margin. It was really strong in Q3 and well above what we saw in first half. Any color on what drove that strength, and how do we think about that in Q4, even into next year, especially as we hear about inflation and freight costs headwind?
spk08: I'll let Dan handle the question, but I thank you for noticing that the margin increased sequentially quite a bit. since we've been working very diligently on a number of initiatives to try to move that GP in the right direction. So, Dan?
spk03: No, thanks for the question. I mean, we've been consistent, really, since the early days, talking about how, as time went on and we scaled up manufacturing and benefited from economy of scales and purchase volume discounts, that we would see margin improve. Our target still remains to be in the low to mid-70s at full scale. And so we're pleased we're on track with where it came in for Q3. And quite honestly, it's just simply longer production runs, better overhead absorption, and purchase volume discounts on components. To answer the Part B of your question, because we built up such a nice and stable inventory balance for the business, for the time being, we're somewhat insulated from the inflation and certain raw material components that we're seeing generally across the global supply chain. but it's definitely something to watch. For Q4, what we messaged on the last earnings call was we expect gross margins to be in the mid-60s for the second half of this year, and that still remains our point of view. So we're pleased with where it's going. We're on track, and we'll just keep moving it forward. Thanks.
spk08: Do you have a follow-up?
spk04: Yes, sorry, can you hear me?
spk06: Yes, yes.
spk04: Sorry about that. Just on your PMA filing for the primary cell device, you said that's still on track for approval in the first half of next year. Any call you can provide at this point in terms of how to think about the contribution for 22?
spk08: Yeah, you know, what we've said all along is, How that will impact revenue in 2022 depends on how quickly it gets approved. Sorry for such a silly comment. And we're optimistic in terms of getting the product approved. We don't see any showstoppers whatsoever. I can confirm that we did receive the 90-day substantive review letter. We have prepared responses. We have a call coming up with the FDA in the next week or so. And we expect to provide the additional responses to the questions that they had. And so, you know, this puts us on track, if everything goes according to plan, to actually get the approval in Q1. But we're trying to be, once again, conservative by saying, you know, sometime first half of 2022. We're very bullish about the impact that this product will have. And I think it's important for me to say that this is not a product that our existing customers are clamoring for, but this is the product that the customers who haven't come our way yet are clamoring for. So this is really where we see this, just like BocaMed is helping us bring new physicians to Exonix because we have an expanded offering and more reasons to do business with them. We think that this non-rechargeable or recharge-free system will give us a strong benefit offering to go and pick up a bunch of these other customers that have not come our way yet. So that's upside. And I think that it is clearly upside to the numbers in 2022 as well. So once that product is approved and we get this thing launched, then we will provide good color around it. And I can assure you that we are already working on the launch plan for getting that product into the marketplace. And we'll likely put together a whole bunch of seminars. Again, they've been very successful for us to introduce new things to the market. So we're really excited about that product. Things are looking really very positive in terms of the FDA filing. And hopefully we can kind of overachieve, if you may, in terms of timing and then have that product make a nice impact on what is possible for us in terms of growth and market share gains in 2022. So thank you for that question. I really appreciate it.
spk04: Thank you. Very helpful.
spk01: Our next question comes from the line of Mike Madsen from Nutan and Company.
spk06: Yeah, thanks for taking my question. I guess, you know, given, I'm curious what's driving your growth, you know, with the roughly 15% growth in S&M in the U.S., you know, how much of that is roughly speaking is coming from existing customers kind of increasing their volumes, converting urologists that haven't done S&M before to start doing it, and I guess the third category would be converting, you know, competitive physicians that are using Medtronic. I mean, I know you're probably not going to give me detailed numbers, but can you kind of give me some sense of what's happening and what's driving the growth? Sure, sure, Mike.
spk08: Look, we're talking about, and it's kind of interesting because sometimes I think these numbers just get missed over. We're talking about in sequential modulation for 2021, we're talking about an increase of approximately 40% year over year, which is a substantial increase in revenue for any company in any business, especially in the middle of a global pandemic, right? where a lot of our existing customers are just seeing some incremental growth in their number of procedures. But they've been stymied, of course, by COVID, right? So a lot of our existing customers, I think, can do a lot more than they're currently doing. So it's a combination of incremental increases, modest as they may be in the volume of our existing accounts, right? So same store sales are increasing, but not dramatically because of the pandemic. But, of course, it's the new account acquisition, and it's the movement of all these legacy accounts. Once again, every single implanter in the United States prior to November of 2019 was a Medtronic customer. And we've picked up quite a big number of those customers, and we continue to bring new customers to the game. So there's been a lot of movement of, quote-unquote, competitive accounts coming to Exonix. Now, we may have handed a couple, one handful or so, or maybe two handfuls back when Medtronic made their legacy product MRI compatible. Okay, that's old news. That's a year ago already. That is not happening. We don't see accounts going back to the legacy provider. It's all the movement is in our direction. Now, what's also new? What's new is You know, we've got a lot of folks now that are coming into the game because they want to use bulk med, right? And these are a combination of people who are also implanting saccharine modulation with our competitor, but also doctors that have been doing Botox because they got tired of implanting the Medtronic product and all the fussiness associated with that product, right? So we're seeing people coming to our seminars that, are just doing Botox and now starting to do Bulkamed and Botox. And clearly, we want to get those folks doing sequinal modulation. So now there's a focus. We've got strong data, which is now in the hands of all of our salespeople with respect to who's doing Botox, how much Botox is being done. And those are really phenomenal opportunities for us to get those physicians in the boat doing sequinal modulation. maybe for the first time or maybe for the first time in a number of years. And we've got quite a number of anecdotal examples of that. So, Mike, it's all the above, right? I mean, you know, it's not, if there was one major trend, then we would speak to it. But it's a combination of all these factors that are positively conspiring to help us increase these numbers. This is different. I'll make one comparison to Inspire. When Inspire is talking about their results, it's all same-store sales. It's all adding new customers but mainly increasing volume because they have no competition, and it's a brand-new thing in the market. We have a different dynamic that's going on right now. But I appreciate the question, and we'll look from an analytic standpoint, and maybe in February when we announce for the full year, we give a little more granularity, a little more color, that can quantify a bit better about where some of this increase is going to come from or where we expect it to come from in 2022. So thanks for the question, Mike.
spk06: Yeah, no problem. If I could just ask a second question. I'd like to ask about the TV ads you're talking about. So obviously it's probably going to be fairly costly, but so how do you ensure that this isn't just going to kind of cause a rising tide that helps your competitor as well as Axonix?
spk08: Well, look, it's going to help the category. There's no question about it, right? And that's an unintended consequence in a way, right? But what we have seen is that we started heavily promoting on Facebook, and we've generated tens of thousands of leads and website visits and all those other statistics. Well, interestingly enough, our competitor now is doing exactly the same thing. So I think what's going to happen is you're going to see, and I think we're demonstrating this to be the case, that now the legacy provider is looking to be a fast follower to Exonix. We started to do heavy Facebook promotion. They're doing it. We're talking about a long-lived non-rechargeable device. Now they're starting to talk about it. I guarantee you that once we start turning heads with TV commercials, no more pads, no more pills, Just Relief, I bet you you're going to see similar from our competitors. So if they want to stay in the game, then they're going to have to spend some money to match the activities that Exonix is doing. And we think that's a good thing, right? This is, you know, it's America. Competition, you know, apple pie and motherhood, right? Competition is a good thing. And we want to be able to get more eyes, more people to understand that it is not normal to leak urine whether it's whether you're coughing, sneezing, or picking up an object, or playing with your kids, or you can't get to the bathroom in time. That's not normal, and the fact of the matter is, Mike, women don't know this. They don't know it because there's never been a campaign to educate the public that there are solutions for this problem, which really does significantly impact the quality of life of people and so forth. So, you know, look, this is, you know, the fact is, sequential modulation has been around for a long time, but it wasn't an attractive solution. It is now. It's long-lived. It's MRI compatible. The efficacy is very high in the 90% range. I mean, these are great fun, these are great facts now to go out and promote this therapy, and we think that this is absolutely the right thing to do, and we would hope that our shareholders would support the investment of dollars to create more awareness and to grow this business. Okay, great. Thanks a lot. Thank you, Mike. Appreciate it.
spk01: Our last question comes from the line of David Oreskut from Touristic Cherokees.
spk02: Hey, Ray. Thanks for taking the questions, and I'm going to apologize up front if these are repetitive. I've been hopping around calls. But I guess I wanted to start on BulkMed first. I know you've talked about the product in the past being, you know, sort of catnip for the physicians and the ability to pull across different SNM implants. And you previously indicated, I think, that around maybe 50% or so of the training sessions for BulkMed were new accounts to exomics. And so I guess, you know, was that still the case for the first or the kind of final training sessions you had with the product? You know, have you had any or have you been able to quantify any type of accounts from BulkMed that have been pulled through as S&M accounts? And then, you know, just as a final part to that, I mean, do you have a pipeline essentially right now where you can understand what accounts are BulkMed that could potentially be S&M implants as well?
spk08: Yeah, the answer is yes, yes, and yes. Okay. And it wasn't a repetitive question. It was a good question, David, so I appreciate that. Look, we have turned a lot of heads, and the fact is we have quite a good number of attendees at these seminars that not only have started with Volcomed, that they're starting to inject into patients, but also a number of them have started with us as a result of having the Volcomed, of doing the seminars and so forth. And they're starting. But when people start, you know, they start with a couple of procedures. You know, you get a couple of patients for external trials and then some time goes by, you know, and then you got the permanent implant. So we don't have a quantification, right, that we could speak to right now that says, oh, definitively we generated X new accounts and we've generated this much volume because, you know, it takes a little time. There is a bit of a delay, right? between the time somebody comes and attends the seminar and all the rest before you can get back out there and get some procedures on the calendar. But we do expect that the benefit of VolcomEd, the benefit of these seminars, will certainly accrue to us, to Exonix, in 2022. Okay.
spk02: Okay, that's helpful. I guess on recharge-free, with that product kind of coming up next year, I mean, do you see this product as being more market expensive? I mean, I know nowadays that the market itself for SMM is primarily this or primarily was the recharge-free device in the past. And so you've launched out this rechargeable device. It's been taking share. And so I guess Do you see over the future the market being primarily a rechargeable-type market and then having recharge-free as additive to growth, or is it something that it's going to essentially be able to augment the growth or accelerate growth further here within the SMS business?
spk08: Yeah, so I want to answer the question in a little bit of a remedial way to start. I think it's really important for people to understand appreciate that the number one selling product for sequinal modulation in America today is the Interstim II, a 20-something-year-old product from Medtronic. It lasts in the body approximately four to five years, three to five years, and that's the biggest selling product today. That is still the biggest selling product today. All right, the only thing different about it is it's now MRI compatible. Okay, great, so you don't have to get it explanted when you need an MRI. But other than that, nothing's changed. Product is fussy as all hell, okay? And you know what I mean? It hasn't all of a sudden changed its stripes and become this great winning product. But that's all the competitive accounts that we don't have yet. That's what they're implanting. They're not implanting the new rechargeable product from our competitor, right? That's not the way it's gone. So we believe there are significant benefits to the rechargeable product given its long life and the fact that now you only have to recharge the product at one hour every month. So we still believe that's the winning product. That's going to be the product line that's going to sell the most. But, you know, you used my phrase about catnip with Bulkamed, but think about now. a non-rechargeable device that can last 10 or more years in your body. We're using the word recharge-free in a very specific way. We don't mean it to be just a non-rechargeable IPG. We're talking about our patient remote, which does not need to be plugged in the wall, which does not use replacement batteries, and can also live for quite a long time in the patient's purse, as an example. So when we say recharge-free, we mean an IPG that doesn't need to be recharged and the patient remote that the patient gets doesn't need to be plugged in the wall to be recharged, doesn't need batteries or anything of the like. So our definition of a recharge-free system is very different than the non-rechargeable IPG and rechargeable patient remote system from our competitor. So that's a nuance that I don't think many people have caught on to. But when we're using those words, we're using them very specifically, and we're going to make sure that the marketplace, these physicians, understand the distinction between what we're offering and what they currently have. Because this is an absolute fuss-free, no-hassles product for people. And for those doctors who believe that their patients are not going to be suitable for for a rechargeable device, and that is where the propaganda has been. That's where the brainwashing has gone. So this is why this is such an important product for us because that's going to get us that extra 25% of the customers out there that we need to be the market leader. And so that's why we're geeked up and extremely bullish about how this product is going to be able to help get us to ultimately where we want to go, which is to be the market leader in cyclone modulation.
spk02: Okay. That's helpful. Thanks for taking the questions.
spk08: My pleasure. Thank you.
spk01: There are no further questions at this time. Please continue, Mr. Raymond Collins.
spk08: Super. Okay. Thank you. Thanks for everybody. Look, we really appreciate you listening in to the call today. Appreciate the questions from the analyst community, and we'll look forward to answering speaking with you all in the new year. You take care and stay safe.
spk01: Ladies and gentlemen, this concludes today's conference call. Thank you everyone for participating. You may now disconnect.
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