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spk06: Ladies and gentlemen, thank you for standing by, and welcome to ASIO Biologics Q2 2021 Earnings 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 the question during this session, you will need to press star then 1 on your telephone. If you require any further assistance, please press star then 0. I would now like to hand the conference over to your speaker for today. Lee Saville, you may begin.
spk05: Thank you, and thank you all for participating in today's call. Joining me are Ron Lloyd, Chief Executive Officer, and Matt Ferguson, Chief Financial Officer. Earlier today, ASEO released financial results for the second quarter end of June 30, 2021. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws. which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that do not relate to matters of historical fact or relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including without limitation, those relating to our operating trends, and future financial performance, the impact of COVID-19 on our business, and prospects for recovery, expense management, expectations for hiring, growth in our organization, market opportunity, guidance for revenues, gross margin and operating expenses, commercial expansion, and product pipeline development, expected future product launches and milestones, and expected results and performance of our partnerships and commercial products, including patient outcomes, are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factor section of our public filings with the SEC, including our annual report on Form 10-K for the year ended December 31, 2020, as updated by our quarterly report on Form 10-Q for the quarterly period ended June 30, 2021. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 9, 2021. Azalea Biologics disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. Also, during this presentation, We refer to gross margin, excluding intangible asset amortization, which is a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure is available in the company's earnings release for the second fiscal quarter ended June 30, 2021, which is accessible on the SEC website and posted on the investor relations page of ASEO's website at www.aseo.com. And with that, I will turn the call over to Ron Lloyd.
spk04: Thanks, Lee. Good afternoon, everyone, and thank you for joining us. ASEO delivered strong results again in the second quarter of 2021. Net sales increased substantially compared to the year-ago quarter, as well as pre-COVID levels. We continue to hit our internal milestones in the development of our next-generation Kangaroo envelope, and our two main clinical trials for Kangaroo continue to roll according to our plans. We've also made meaningful progress in our orthobiologics, soft tissue reconstruction, and contract manufacturing businesses. I'll share more details on all these areas in a few minutes. But first, I'd like to provide an update on the actions underway with regard to the recent recall of a single donor lot of our fiber cell product. As many of you know from our recent communications, we were notified in late May that several patients who had surgery that included our fiber cell product, experienced post-surgical infections, including some patients that tested positive for tuberculosis. Our team immediately took action to investigate the matter. This led to our voluntary recall of a suspected single donor lot of this product. We worked with our distributor to account for all hospitals that received this lot. All unused products in this lot has now been secured and quarantined. Under the direction of the CDC, samples of the returned units have been analyzed at the U.S. government lab and have tested positive for microbacterium tuberculosis. Based on currently known information, we have no reason to believe that other donor lots of Fibrocell are affected. We remain committed to providing products that enable physicians to deliver the best possible care for their patients. While this is an extremely unfortunate event, we have thoroughly reviewed our procedures for screening donors and producing fiber cell, and we've not identified any deviations from our established protocols, which are based on industry standards and government requirements. Following the recall, the FDA also completed an inspection of our manufacturing facility and quality control records and made no Form 483 observations. Importantly, our culture at ASEO is built on the principle of continuous improvement in the safety, efficacy, and quality of our products, and the well-being of our patients is our highest priority. We've already made adjustments in our donor screening criteria, and our goal is to broaden detection of disease beyond existing industry standards and regulatory standards. We believe this experience can be a catalyst for further advancing the state-of-the-art for all products, in this category. Regarding the current suspension of sales of Fibrocell by our distribution partner, they have not indicated any decisions as yet on the resumption of their sales of Fibrocell. Now, turning briefly to our second quarter financial highlights. Total revenue was $12.2 million, a 42% increase over the second quarter of 2020, and a 26% increase over the second quarter of 2019. Core product revenue was $10 million, representing a 35% increase year-over-year and a 53% increase over the second quarter of 2019. Excluding sales at Fibersell, we saw our total revenue grow 4% over the first quarter of 2021, and our core products revenue grew 6% sequentially. As a reminder, our core product platforms address three primary markets, implantable electronic devices such as pacemakers or defibrillators, bone repair and orthopedics and spine procedures, and soft tissue reconstruction. Additionally, we fulfill tissue processing contracts through our Richmond, California manufacturing facility as a highly leverageable component of our business. Core product growth in the quarter was primarily attributable to an increased awareness and further validation of the remodeling benefits of our regenerative medicine products. We believe that our products are truly unique and we're pleased to see the continued traction of our products reaching new patients. Turning now to some of the recent highlights in our business and how we see this trending in the current quarter and through the remainder of the year. Starting with Kangaroo. Kangaroo. our unique biological envelope for stabilizing implantable electronic devices. Throughout the second quarter of 2021, we made further commercial and product development advancements, as well as the progress on two clinical trials underway. We continue to add accounts to the Premier breakthrough designation that we received last December. The partnership with Premier, again, a network of more than 4,000 hospitals is enabling us to sniffly expand our market opportunity in the United States. Additionally, we were delighted to execute a partnership agreement in Q2 with another integrated delivery network, Providence Health System. This partnership with Providence should allow us to further expand our market share, and we look forward to working with them in the coming quarters. We've also made progress expanding our field sales organization and ended the quarter with 31 sales professionals in this part of the business. We are pleased to see the traction our existing sales reps have made in further penetrating the market and driving growth and awareness. For the second half of 2021, we are focused on continuing to increase the productivity of our reps and leveraging the partnerships of Boston Scientific and Biotronic to further expand sales. We expect to hire additional reps starting in 2022 as we approach the planned launch of our next generation Kangaroo envelope. On that note, we're also excited to see the continued advancement of this new product. Most recently, we achieved the next milestone on our path to FDA submission with the recent completion of manufacturing validation. we remain on track to reach FDA submission in Q1 of 2022. As reminded, the next generation Kangaroo envelope will be enhanced by adding the antibiotics rifampin and minocycline to the envelope. Following FDA submission, we expect to receive FDA clearance and launch the product in the second half of 2022. This biological product with antibiotics has the potential to create substantial long-term growth for Zio. As an update on the clinical front, both the HEAL study and the de novo study are progressing nicely with continued enrollment. We look forward to this clinical data for kangaroo, and we're confident the results will further allow us to demonstrate the unique clinical benefits derived from a biological envelope. Now turning to our orthopedic and spine repair business. As a reminder, our product platform in this market consists of Fibrocell, BiBone, and OsteGrow-V. Despite the fiber cell recall and subsequent suspension of purchases by our U.S. distributor, we were very pleased to see the continued momentum among our other viable bone matrix partners. This product platform continues to be an important component of our business with differentiated products and a highly efficient commercial model. The last two areas of our portfolio I'd like to comment on are soft tissue reconstruction, business, and our contract manufacturing. In soft tissue area, we continue to make progress in our SimpliDerm business. Working primarily with our independent distributors, we're able to bring on several new accounts during the second quarter of 2021. We also recently signed up three new regional distributors and look forward to these new partners further increasing our penetration of this market in the second half of the year and beyond. The second quarter also saw the publication of the first peer-reviewed journal article related to Simpliderm. We see this publication in the June issue of Plastic and Reconstructive Surgery as an essential first step in building the body of evidence to support Simpliderm's more widespread adoption. I think it's important to reiterate the value of the diversity that exists in our core products portfolio, and we firmly believe this portfolio provides a stable foundation to build from. We're especially appreciative of this diversity when we encounter temporary hurdles with one product, as was seen in the case of FibraCell in the second quarter. Lastly, we continue to see steady contribution from our contract manufacturing business. Sales were $2.2 million in the second quarter of this year, significantly higher than levels we saw for most of last year. As discussed on prior calls, we believe we have good visibility in this part of our business and expect it to grow in the second half of 2021. As we look forward, I am as confident as ever in the opportunity that we have in each of our product portfolios to deliver differentiated regenerative medicine products that improve outcomes in implantable device-related surgeries. We're making meaningful progress with our commercial organization and sales channel partnerships that penetrate and expand high-growth markets while advancing a robust pipeline and generating clinical data. And with that, I'll turn the call over to Matt to go through our financial results in greater detail.
spk03: Thanks, Ron. As mentioned, net sales for the three months ended June 30th, 2021, were $12.2 million. a 42 percent increase from $8.6 million in the same period of the prior year. This included a 35 percent increase in sales of core products and 81 percent growth in our non-core products year over year. We estimate the second quarter revenue loss attributable to the fiber cell recall, including reimbursement for return product and subsequent suspension of purchases by the distributor, to be approximately $1.1 million. Gross margin for the second quarter of 2021 was 46 percent as compared to 44 percent in the corresponding prior year period. The improvement in gross margin was primarily related to increased efficiency associated with higher production volumes compared to the year-ago quarter, as well as other operational improvements. These gains were offset by the impact of costs recorded related to the fiber cell recall and the lower margin contribution of net sales from non-core products. We also look at gross margin excluding the impact of non-cash amortization of intangible assets. And on that adjusted basis, Q2 gross margin would have been 53% versus 54% in the year-ago quarter. Total operating expenses for the second quarter of 2021 were $10.2 million, a 35% increase from the second quarter of 2020. The main contributors to the increase were growth in commercial spending associated with higher net sales, expenses associated with operating as a public company, and development costs associated with our next generation kangaroo envelope project. Net loss for the quarter was $2.4 million as compared to a net loss of $5.2 million in the second quarter of 2020. The current year's second quarter included one-time gains totaling $3.6 million, primarily related to the forgiveness of Zia's PPP loan Loss per share in the second quarter of 2021 was 23 cents, compared to a loss of $7.99 per share in the year-ago quarter, which was prior to the conversion of the company's preferred stock into common stock in association with the company's Q4 2020 initial public offering. As of June 30th, 2021, we had a cash balance of $28.4 million, with an additional $5.1 million available for borrowing under our working capital line of credit, resulting in total liquidity of $33.5 million. Now, turning briefly to the outlook for our business, we don't yet have sufficient visibility to reinstate guidance for the full year, but we can provide a range of expected revenues for the third quarter. We expect net sales in the third quarter to be in the range of $11 to $12 million, This represents a year-over-year change ranging from negative 7% to positive 2%. Excluding fiber cell sales, which we're assuming will not resume in the third quarter, this would represent robust growth of 14% to 24% over the third quarter of 2020. This outlook also assumes the recent resurgence of COVID-19 cases in the United States including impacts from Delta and other variants, does not result in a significant reduction in surgical procedure volumes in August and September. We have not seen such a slowdown so far this quarter and are cautiously optimistic that will continue to be the case. Now, at this point, Ron and I would like to open the call for your questions.
spk06: Thank you. Ladies and gentlemen, as a reminder to ask the question, you will need to press star then 1 on your telephone. To withdraw your question, press the pound key. Again, that's star one to ask the question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Matthew O'Brien with Piper Sandler. Your line is open.
spk02: Thanks for taking the questions. Ron or Matt, can you just talk a little bit about the remediation process from here with the agency as you're trying to get FiberCell back on the market? It sounds like the inspection went well. You've identified the one lot. You're not expecting any sales in Q3. Is it possible that you could start selling in Q4, maybe even early next year? And then can you maybe, Matt, just frame up, you know, potential litigation exposure if you can at this point, and then any kind of insurance coverage that may offset any settlements or outflows that may happen as a result of any litigation?
spk04: Sure, Matt. Let me start and try to address. I think you have quite a number of questions filled into there. So let me see if we can start and address them. So your first question was around FiberCell and the ability to resume commercial sales of that product. Again, just to reiterate, this was a single donor lot issue. We, again, recalled this lot. We've looked at all of our procedures and protocols. We've seen that there was no deviation in anything that we have done relative to these protocols, which, again, are based on regulatory and industry standards. The FDA, as you mentioned, inspected our facility, saw no issues, issued no Form 83s. So from an overall regulatory perspective, there's nothing really that stops us from selling Fibrocell as it stands today. In addition, we've gone on and made some adjustments into our donor screening, for example, excluding donors that spent significant amount of time in other countries that could have higher rates of TB. And so from our perspective, right now, Fibrocell, you know, could be available commercially. We do obviously sell the product through our partnership with Medtronic, and Medtronic made the decision that, to cease sales of this product as we were going through the recall process. And so as of this time, they've not given us an indication on their decision to resume sales, but there's nothing stopping us from a regulatory standpoint in terms of commercializing Fibrocell. And so let me turn it over to Matt to go a little bit more through your questions as it relates to coverage.
spk03: Yeah, Matt. So I think you asked about potential exposure from a litigation perspective, and it is true we've had several claims filed associated with this matter, but it's really very, very early in the process still. And so, you know, as Ron mentioned, we've been through our own processes and, you know, kind of done a thorough review on our end. And, you know, we haven't identified any deviations from normal processes, either our normal processes or those generally accepted throughout the industry. So from that perspective, you know, we feel like that is a, I guess, a strong point in our favor when it comes to any claims that might be made against us. But it really is just too early to put numbers on what the estimated exposure is, you know, as you would expect for, companies like us in this industry, we have insurance that, um, you know, is, is, uh, designed to help a company like ours deal with a situation like this. And, um, you know, I'm confident that we'll, we'll work through the situation from a financial point of view, but it's just a little early to put any numbers on it. We haven't established any kind of a reserve in our Q2 financials related to this matter.
spk02: Thanks. And then, and then Ron, have you had conversations? I'm sure you have with Medtronic and just, uh, and you're basically waiting for them at this point, and have they given you any kind of indication, you know, when they may make a decision, or, you know, do you think they may eventually just walk away, just given, you know, what occurred here?
spk03: Ron, I think you may be on mute still.
spk04: Yeah, obviously, Matt, we talk to Medtronic weekly as we work through this recall process. And so, again, our focus is, First, initially, is on the recall, securing the product, also working through with the CDC and trying to ensure patients that receive the product are getting the appropriate medical care. So that's where our focus and energy has been. And, again, in conversations with them, they've not indicated a timeline here, and so I'd hate to speculate as to when that decision is going to be made. I would like to say, though, as you know, we also sell other viable bone products through our other partnerships. and we're pleased to see the continued momentum of this business through our other partnerships. In addition, we're also looking at adding additional partnerships, and those conversations are going well as we look to add some additional relationships and partnerships for our viable bone products.
spk02: Got it. And then just last one for me is just on the kangaroo side of things. I think, Matt, you said, you know, the core business is up 6% sequentially. I don't know, I don't believe that in, includes the impact of FiberCell in the quarter. So I'm assuming it would be up more if you included FiberCell. But, you know, how are things going from a kangaroo perspective? You've got a lot of sales reps now. Premier, you've got, you know, Providence. Can you just talk a little bit about the momentum that you're seeing there, you know, across the various channels of selling that product? Thanks.
spk04: Sure. So, Matt, let me address that. So I know we don't break out our sales. in details that relate to our core products. But we have shared in previous calls kind of what was the leading product category as we think about the performance for the quarter. And when you look at our Q2 performance, actually the Kangaroo product, when we look at our sequential growth versus Q1, was our leading product category in terms of our ZO growth. And so we're excited about that. And that growth, I think, is really coming from two main factors. The first is We've been able to add new accounts. This has come mainly through our premier agreement that we signed last December. As you recall, we received breakthrough designation based on the Kangaroo technology, and so we've been active in adding additional premier accounts, and we're excited for Q2 to actually sign another integrated network with Provident Health System. So we think, again, as we continue to add accounts, that's going to continue to drive the Kangaroo businesses. And then the second factor here is that our messaging as it relates to kangaroo and the remodeling benefits of having a biological envelope is really resonating more with customers. And that's leading to initial and expanded use of kangaroo. And as you know, we just finished the HRS meeting. And at that meeting, very pleased to see the progress in terms of our conversations with doctors and their ability now to gravitate towards the remodeling benefits and the patients that will benefit from this. And we think that, collectively, with the additional expansion of accounts, will continue to drive Kangaroo growth as we look at the second half of this year. Great. Thank you.
spk06: Thank you. Our next question comes from the line of Josh Jennings with Cohen. Your line is open.
spk07: Thank you for taking the questions, Ron and Matt. Something to just follow up on the FDA inspection, no more important injuries. That's great news. Is that fully the risk now? What are the next steps within that inspection process that you're expecting in terms of communication with the FDA? Are you giving the full clearance or are there still steps to be taken now?
spk04: Yeah, so the FDA did their forecast inspection based on the recall as you would imagine. Again, we're pleased with the inspection results. Again, no Form 83s. It was, you know, from our perspective, a very thorough review. And we're pleased, again, that, again, as we also noted, that there was no deviations for any of our processes as it relates to the screening or production of fiber cells. So, again, from a regulatory standpoint, you know, we feel very good. and the processes that we have based on regulatory requirements and industry standards. But as we've also mentioned during the call, that we want to continue to go beyond that. So, again, we're going to continue to make adjustments as it relates to donor screening and potentially look at testing for additional pathogens as it relates to these products. And, again, I think our goal through continuous improvement is to set a new standard for the industry as it relates to this category of products.
spk07: Thanks for that, and it's great to hear that your other viable bone matrices products have nice momentum through 2Q. It may have been one of the risks of the fiber cell news. Can you talk a little bit more about the momentum you're seeing there, any numbers you can give us in terms of the growth, those experiences in 2Q, or growth that you're expecting in the back half of the year for those non-fiber cell viable bone matrices products?
spk04: Yeah, so we don't necessarily break out, again, any specific product area. But as we mentioned, we are pleased with the continued growth within our viable bone matrix product category and through our partnerships. You know, we continue to see that building as we go into the second half of the year. But I think it's important to remember from a company standpoint that, you know, we are a diversified RegenMed company. again, advancing outcomes in patients receiving implantable medical devices. And I think it's important to take a step back here and remember the benefit of our diversity. This diversity has served us well. If you think back during the COVID pandemic, even despite the impact on surgical procedures, we actually exhibited growth from a company perspective due to our diversity. And so, again, we have the opportunity here, as we think about going forward, is to build off the benefit of a diversified portfolio. So we anticipate to drive growth, continued growth within Kangaroo. Again, as we mentioned with our other viable phone products, those partnerships, again, through Simpliderm and our contract manufacturing. So we're really excited about the opportunity here for the second half of the year, again, build off this diversity that we have from a company perspective.
spk07: Great. And then one last question. On SimpliTerm, any tailwind that you're experiencing, and it was still early in that launch, but from the safety warning for some of those competitor HADM products, and then any update on when the advisory committee could be scheduled and what you expect out of that to review scientific information on HAEMs specifically for breast reconstruction and what you expect the outcome to be. Thanks for taking the question.
spk04: Sure. So, yeah, we're excited about the continued momentum that we're building here with Simpliderm. In the second quarter, we actually received our first publication on the product. It was published in June. This looked at a series of patients with about more than 100 implants of our SimpliDerm product versus the market leader in this category. And from this study, we showed that SimpliDerm was safe and effective. So it's great to have our first peer-to-peer article out into the public domain, again, up against the market leader, again, showing excellent safety and efficacy. And already from this study, which, again, just happened in June, we're already seeing the benefits of being able to now add some additional accounts based on this publication uh we're also able to leverage the health trust contract that we were awarded back in in beginning of march and so that's also helped us build momentum and then we sell the product predominantly through a distributor network we added three more regional distributors for our simple numbers in q2 and so i think collectively you know having additional distributors, the publication, and then again, access into more accounts through contracting will help us further expand the business. As it relates to the FDA and the workshop, we have yet to hear a date for that workshop. Again, the FDA has been a little bit preoccupied here still with COVID activities, but we're anxious for them to bring forth and host that workshop so we have a chance to talk about the opportunity of human dermis tissue for breast reconstruction. So at this point, we're still waiting for that workshop to be scheduled.
spk07: Understood. Thanks for all the updates.
spk06: Thank you. Our next question comes from the line of David Rescott with Truist. Your line is open.
spk00: Hey, guys, thanks for taking our questions. Now, I appreciate some of the guidance you gave around Q3 and the commentary around how the guide does not assume there's going to be a significant impact to surgical procedures in August or September. But could you provide, I guess, or discuss some commentary on whether or not there's been an impact in the month of July from the recent resurgence? And, you know, is there any reason, you know, in the fourth quarter that we shouldn't be thinking about kind of similar historical trends that we've seen previously? I'm not sure if if maybe the recall of Fibrocell had impacted or had supported fourth quarter growth sequentially. Just if there's any color here, it would be helpful.
spk03: Hi, David. This is Matt. I'll try to speak to that. So, you know, we've seen the business, you know, hold pretty steady even as Delta has increased concerns about COVID generally around the country. You know, I think it speaks to the nature of the procedures that, that our products are used in. And, you know, we, you know, of course, always see some fluctuation month to month, but we generally saw, you know, procedure trends and sales trends hold pretty steady as we went through July and, you know, just a few days into August here, but, you know, so far in August as well. So, you know, we're hoping that continues to be the case, even in the face of increasing concerns that are obviously out there about the variants. You know, we have heard some anecdotal comments about more elective procedures being curtailed a little bit in some geographies, but by and large, that really has not affected us so far. I think the other part of your question just had to do with fiber cell and the expected contribution of that as we went through the year. I mean, there's no doubt that that was a driver of growth for us in the first and then into the second quarter until sales were suspended, and we're still hopeful that they will resume. We don't think that that will happen in Q3, but we'll see what happens after that. And that's really the reason why we limited our guidance to the third quarter, just because of the lack of visibility around that one event. As Ron talked about, I think there are other dials that we can turn and other levers of growth that, that will be important for us and that always have been important for us, both in our orthobiologics business and our viable bone products, in addition to all of the other product lines. As you already heard, this past quarter, Kangaroo really led the pack in terms of driving growth from a sequential quarterly basis, if you were to exclude the impact of fiber cells. We feel good about the business overall. You know, we definitely see ourselves continuing on a growth trajectory, you know, except for the, you know, we call it the temporary setback of the suspension of fiber cell sales. And, you know, we're focused on growth from here.
spk00: Okay, that's helpful. Thank you. I guess on margins, I mean, they expanded year over year in the quarter here, and maybe more from a high level, I know. You know, now that the Fiverr sale is kind of out of the business maybe for the second half of the year, I guess, could you touch on at all from a high level really how you're thinking about that impacting maybe gross and operating margins and whether or not that's impacted the ability for the company either to invest in the business going forward or do any type of tuck in M&A? Just interested in how the recall here, the pause, impacts kind of the forward expectations of the company it previously had. Thank you. Mm-hmm. Mm-hmm.
spk03: Yeah, yeah. So, in terms of gross margins, as I mentioned in the prepared remarks of the call, you know, we do expect that gross margins will continue to improve as we move through the year. So, we were at about 46 percent on a gap basis in Q2. And, you know, I would see that going up at least two or three points by the fourth quarter of this year. And, you know, there's room to grow after that as well, certainly. I think the things that are driving the growth so far and will continue to do so we are really focusing much more intently on the build scheduling and the product mix and just making sure that we're managing our inventory appropriately and not incurring excess and obsolete charges more so than is necessary. And then we've also looked at some technology that is helping out. Some of that's in the early stages, but it's helpful, and I think there are some other opportunities in that area as well. From an operating expense point of view, you know, we'll keep things pretty steady in most areas of the business, I'd say, over the next couple of quarters, but we will have some additional cost dealing with the recall and, you know, kind of legal and administrative costs associated with that. It's tough to put a number on those, but, you know, we're kind of planning on roughly an extra million dollars or so in the third quarter. And, you know, I don't see that continuing broadly or for a long time, but, you know, that's sort of what we would expect in the near term.
spk00: Okay. Thanks for those other questions.
spk06: Thank you. Thank you. Our next question comes from the line of Brandon Folks with Cantor Fitzgerald. Your line is open.
spk01: Hi, thanks for taking my questions. Maybe firstly, just on Fibersol, should Medtronic decide not to bring the product back to market, can you just talk about your options or thinking in terms of seeking a new partner or going as a loan? And then secondly, you talked about potential additional partnerships. Any color in the environment you're seeing currently? Thank you very much. Sure, Brandon.
spk04: Yeah, I mean, as we think about that business, it's a portfolio of products all built off of the Viable Bone Matrix platform. So we currently have a number of partnerships in place across a variety of products, of which Medtronic and Fibrocell was one of our partners. Obviously, with the size and scope of Medtronic, it was a large partnership. And so if Medtronic makes the decision not to resume, we would look to backfill that through signing additional partners. And again, given the size and scope of Medtronic, it will take us probably a couple of partners to think about in terms of magnitude to backfill that level of volume. But again, as I mentioned, we're already in discussions with some partnerships for additional business and will continue to do so. We have the opportunity to bring out additional products off that platform and to sign these new partnerships, and that's what we'll pursue going forward in the future.
spk06: Thank you. I'm not showing any further questions in the queue. I would now like to turn the call back over to Ron for closing remarks.
spk04: Great, thank you. Yeah, just in closing, the ASEO team remains focused on and excited about the range of opportunities that we have. and I have the greatest confidence in our future. So with that, I want to thank you for your continued interest in ASEO, and have a great day. Take care, everybody.
spk06: This concludes today's conference call. Thank you for your participation. You may now disconnect.
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