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spk07: Good morning and welcome to Establishment Labs second quarter 2021 earnings call. At this time, all participants will be in a listen only mode. At the end of this call, we will open the lines for a question and answer session and instructions will follow at that time. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, today's call is being recorded. I will now turn the call over to Raj Denhoi, Head of Strategy and Investor Relations. Please go ahead.
spk04: Thank you, Robert, and thank you, everyone, for joining us. With me today are Juan Jose Chacon Quiroz, our Chief Executive Officer, and Rene Gaeta, our Chief Financial Officer. Following their prepared remarks, we'll take your questions. Before we begin, I would like to remind you that comments made by management during this call will include forward-looking statements within the meaning of federal securities laws. These include statements on Establishment Labs' financial outlook and the company's plans and timing for product development and sales. These forward-looking statements are based on management's current expectations and involve risks and uncertainties. For discussion of the principal risk factors and uncertainties that may affect our performance or cause actual results to differ materially from these statements, I encourage you to review our most recent quarterly report on Form 10Q and other SECU filings, which are available on our website at EstablishmentLabs.com. As a reminder, Establishment Labs received an investigational device exemption from the FDA for Motiva implants and is undergoing a clinical trial to support regulatory approval in the United States. We continually seek to expand the geographies in which our products are regulatory approved. Please check with your local authority for specific product availability. The content of this conference call contains time-sensitive information, accurate only as of the date of this live broadcast, July 29, 2021. Except as required by law, Establishment Labs undertakes no obligation to revise or otherwise update any statement to reflect events or circumstances after the date of this call. With that, it is my pleasure to turn the call over to our CEO, Juan Jose.
spk09: Thank you, Raj, and good morning, everyone. I hope everyone is healthy and continues to remain safe. I am pleased once again to be able to report a record quarter with 2021 second quarter revenue totaling $32 million. Second quarter revenue increased 205% over the second quarter of 2020 and was up 5% sequentially from the first quarter of this year. Our continued strong sales results show that a singular focus on women's health, innovation based on science, and a track record of over 10 years of excellent clinical and aesthetic outcomes with Motiva implants can drive significant share gains. It is not by accident that we remain on track to achieve the dominant share position in our industry. And as our story continues to resonate with surgeons, and most importantly, with women, we expect to continue to post strong results. With the strong momentum in our business, we are raising full year guidance for 2021 to a range of $122 to $126 million. This is an upward revision from the previous guidance of $118 to $122 million we provided with our first quarter results. This updated outlook represents growth of 44% to 49% over 2020. This updated guidance captures a continued momentum, including strong underlying market demand, and our capturing of share in geographies around the world. While the pandemic continues to create some unusual quarter-to-quarter volatility and more pronounced seasonality is a consideration over the near term in our business, we are confident that our market share gains will continue as countries open up thanks to vaccination campaigns all over the world. As always, and especially with the impact of COVID, we will continue to take a conservative approach to guidance. Renee will provide additional detail on our second quarter performance and outdated outlook in a moment. Before I turn the call over to her, I would like to highlight several recent events and provide an update on the key initiatives. On June 21st, a paper titled The Surface Topography of Silicon Breast Implant Mediates the Foreign Body Response in Mice, Rabbits, and Humans was published in Nature Biomedical Engineering. This paper was authored by a group of researchers at MIT and focused on determining the optimal breast implant surface that is most biocompatible and that induces the least amount of inflammatory response. The researchers were led by Professor Robert Langer, one of 12 institute professors at MIT and among the most published, cited, and decorated engineers in history. He is a scientific co-founder of Moderna, and on top of that, he has been cited over 326,000 times and is an author on more than 1,500 published articles. He was joined on the paper by a distinguished panel of researchers from MIT, MD Anderson, Johns Hopkins, Rice University, Baylor College of Medicine, the University of Manchester, and the Medical University of Innsbruck. The study showed that the patented Motiva smooth silk surface significantly reduces the foreign body response compared to implants with higher degrees of roughness or completely smooth surfaces. the researchers looked at the tissue capsules formed, as well as the expression of immune and inflammatory markers in both animal models and human tissue samples. The smooth silk surface was consistently shown to be in the sweet spot of inducing a healthy capsule, but also limiting the amount of inflammation. As Professor Langer said about the study, the smooth silk surface was superior in minimizing inflammation and excessive foreign body response. He went on to say that determining an optimal surface is a significant step for the medical device community towards designing safer and more biocompatible implants which can reduce patient complications. The importance of this paper is hard to overstate. Nature Biomedical Engineering is a well-recognized and respected journal in its field, and the Nature journals are among the most demanding in terms of their review process. The findings of this paper add more links to a change that spans from the inception of our Motiva implants over a decade ago and the technology we purposely designed into them to the consistently positive real-world outcomes seen by surgeons and patients who use them. It is not by accident that our implants consistently show excellent outcomes, and the work by Dr. Langer's team and others are adding to a body of evidence that is increasingly hard to ignore. The rigorous science and clinical data behind Motiva sets us apart from the competition, and our strong sales results show that this message is resonating more and more with surgeons and with women all over the world. On Motivamia, our minimally invasive breast enhancement procedure, we announced on April 27th the completion of our 100-patient Motivamia IRB-approved study in Costa Rica. We continue to perform cases that reaffirm our belief that this approach will transform breast aesthetics. As a reminder, Motivamia has the potential to make breast enhancement appealing to many women who previously had not considered breast aesthetics. The positive feedback from surgeons from different regions who have used the technology supports our view that MIA will expand our total addressable market. As a reminder, our initial estimate of the global total addressable market for MIA is 1.9 million procedures per year, which is larger than the current total market. Regulatory clearance in Europe for the tools that are part of the Motiva MIA system remains on track and should allow for a planned launch in 2022. Motiva Flora, our novel tissue expander, has begun limited commercial sales. With a first-of-its-kind non-magnetic port, Flora allows for MRI imaging during the time an expander is used after a mastectomy. Flora has the potential to also improve clinical outcomes by changing the way women are treated for their cancer. By being non-magnetic, FLORA opens up a new paradigm for radiation oncology planning, and we have several projects and studies underway to help define how FLORA can improve cancer treatment during this critical stage in a woman's journey to recovery. FLORA is one part of a long-term strategy to make breast reconstruction not only safer, but also to create a new standard of what we call aesthetic breast recon. with the goal to provide similar outcomes for breast reconstruction and aesthetic patients. The clinical benefits that come from offering better alternatives is an important part of our women's health mission. In many countries around the world, less than 10% of women have breast reconstruction after a mastectomy, and there is a real opportunity to move this number meaningfully higher. Our ergonomics tool rollout continues in several select geographies. The Ergonomics2 platform builds upon our flagship ergonomics implant and offers enhanced mechanical properties, advanced chemistry, and improved ergonomics, all of which we believe will result in even greater patient satisfaction and justify a price premium. Our clinical and commercial efforts in China are ongoing, and we continue to make progress in the regulatory process. Our plan is to launch Motiva in this market in 2022. Our regulatory timelines for U.S. approval also remain unchanged. In August of this year, the aesthetic cohort will pass the two-year mark. We continue to enroll patients in the remaining reconstruction cohort of the trial, and as a reminder, we have fully completed the revision reconstruction cohort. Lastly, I want to highlight several recent additions to the team at Establishment Labs. In May, we announced that Prateep Dasidhar joined as head of global operations. He's also overseeing our digital transformation initiatives. Prateep's experience in transforming and scaling business processes at such companies as ServiceMaster, Salesforce, Amazon, HP, and others will be invaluable as we continue to expand our revenue base. In June, we announced that Nita Toprani joined as our general counsel and corporate secretary. She came to us from Zimmer Biomed, and I can tell you that her contributions and insights have already been significant in the short time she's been here. We also announced in June the hire of Heather Brennan as our head of U.S. commercial operations. She joins us from MTF, where she worked for the past 13 years, most recently as a general manager of their plastic and reconstructive surgery division. Heather is very well respected in our industry and among the plastic surgeon community. She's already deep into planning our strategy as we prepare to enter the U.S. market. Of course, as we announced earlier this month, this is Rene Gaeta's last earnings call with Establishment Labs. She's leaving us to pursue another opportunity closer to her home in California. We have appointed Rash Danahoy, our current head of strategy and investor relations, as interim CFO. Raj joined us in February from Jefferies, and his background and experience make him a natural choice to support our continued growth. He has a deep understanding of our business, and he shares my passion to transform our industry by focusing on women's health and wellness. I have enjoyed working with him the past few months and appreciate him taking on this important role in our company. I will now turn the call over to Renee to cover our financial results.
spk01: Thank you, Juan Jose. The significant momentum in our business carried into the second quarter. We saw strong growth again in sales to a new record level and our operating expenses and cash are being managed effectively. Total revenue for the quarter was $32 million. Direct sales were approximately 44% of this total while distributor sales, which can fluctuate based on changes in inventory levels and the timing of reorders, made up the balance. From a regional perspective, Sales in Europe comprised approximately 45% of global sales. Asia Pacific and Middle East was 30%, and Latin America made up the balance. Brazil, which is our largest single market globally, accounted for 7.7% of total quarterly sales. Our reported gross profit for the second quarter was $21.5 million, or 67.1% of revenue, compared to $7.2 million, or 69.1% of revenue, for the same period in 2020. The change in gross margin was the result of regional mix returning to more normalized levels as well as increased production volumes. Our gross profit this quarter improved from 66.2% reported in the first quarter of 2021. Average selling prices in the second quarter were up slightly from the first quarter of 2021. As we have seen in the last several quarters, there will be fluctuations in gross margin. We continue to believe that the best way to gauge our progress on this is on an aggregate basis over time, and we are comfortable with gross margins in the mid 60% range over the near term. SD&A expense for the second quarter increased approximately $7.3 million to $21.8 million compared to $14.4 million in the second quarter of 2020. The increase in SG&A in the second quarter resulted from the normalization of business practices following the significant disruption from the global pandemic in the year-ago period. Our R&D expense for the second quarter increased approximately $2 million from the same period in the year ago to $4.3 million. R&D expense also returned to more normal levels this quarter and will fluctuate quarter to quarter based on the timing of clinical trial and other expenses. Total operating expenses for the second quarter were $26.1 million, an increase of $9.3 million from the year-ago period. The increase this period was, again, due primarily to the normalization of spending relative to a year ago. Net loss from operations for the second quarter was $5.3 million, compared to net loss of $10.5 million in the year-ago period. Our cash position remains strong, at $76.8 million as of June 30th, compared to $84.5 million on December 31st. Our net cash burn this quarter was only $1.1 million. As Juan Jose noted earlier, we are raising our annual sales guidance for 2021 to a range of $122 to $126 million from the previous range of $118 to $122 million. The new range represents annual growth of 44 to 49%. In refining our outlook, we took several factors into consideration. There is considerable momentum in our business and we are taking share globally. We expect this will continue. However, the third quarter could see more pronounced seasonality this year as surgeons and patients take vacations after not being able to for the last year. In general, and especially during the current pandemic, we feel it is best to be conservative in our outlook. As we look down the rest of the P&L, we continue to expect to see spending levels increase as we prioritize investments in a significant number of development and commercialization programs we have underway. Preparing for entry into new markets and advancing our product pipeline with new technologies to drive future growth remains a top priority. However, while operating expenses tied to these initiatives will increase, we expect the efficiency programs we implemented over the past year will become more permanent part of our business practices. The increased efficiency, as well as our strong revenue growth, should result in our cash use continuing to trend down from pre-pandemic levels, even as we increase strategic investments. Overall, We believe our company is in a very strong competitive and financial position. Before I turn the call back over to Juan Jose for concluding remarks, I'd like to say that my recent decision to leave establishment labs was a difficult one. As seen in our results, the company is in a very good financial shape and our outlook remains very bright. I firmly believe establishment labs will succeed in its mission to transform the lives of women around the world. However, As with many people coming out of the pandemic, I simply decided to make a change and to accept a position closer to my home. My time here has been great, and I want to thank Juan Jose and the board for the opportunity to be a part of this amazing story over the past four years.
spk09: Thank you, Renee. The record revenue we generated in the second quarter and recent developments in our industry Show again that ESTA is on the right path to be the leading company in breast aesthetics and reconstruction, and we are preparing for the next chapter in this growth story, fueled by your commitment to women's health. During the second quarter, we announced a groundbreaking on our new Sulayam Innovation Center in Costa Rica. This new facility will house expanded research and development labs, the new state-of-the-art media center, and world-class surgeon education and training facilities. The facility will also more than double our manufacturing capacity to over 1.9 million implants a year, which is enough to satisfy more than half the current world market. I'm pleased to also announce that after his previously announced leave, Salvador Dada returned earlier this month into the position of head of special projects, the first of which will be to oversee the construction and validation of the new facility. I want to close by again thanking our outgoing CFO, Rene Gaeta. Rene has been with us through our IPO and through a time of significant expansion of our company. But more than that, she also is a good friend to me and everyone at Establishment Labs. You will be missed, Rene, and we wish you well as you embark on the next chapter of your life. I will now turn the call over to the operator for your questions.
spk07: Thank you. At this time, we'll 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 tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For 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. Our first question today is from Matt Taylor of UBS. Please proceed with your question.
spk06: Hi, good morning, and thanks for taking the question. So I want to just ask one on market dynamics. You have a nice quarter. You're in so many countries. I was wondering if you could just give us some more color on how things are doing in some of those different geographies. Maybe you could characterize some of the ones that are still seeing some pockets of disruption and how that could improve through the year. And then also would love some color on whether you think you're gaining share.
spk09: Yeah, thank you, Matt, and good morning. So, you know, we continue to see good recovery in Q2, and we do believe we are taking market share globally. We saw good growth taking place in Europe and Asia Pacific. Latin America was down sequentially, but we're not surprised. Brazil usually has a very strong first quarter, and then second quarter is down usually from that. And there was some small impact from FX. But overall, we're super happy about this quarter. It shows that there's momentum to the business. We understand what's going on globally with regards to the pandemic and some of the challenges that it poses. But we continue to perform well and we're very happy with the way the team is doing all around the world.
spk06: Okay, great. And then you talked about some more pronounced seasonality. Maybe you could just talk about any color that you have on the cadence that we should expect for Q3 versus Q4 if that's going to be different than we would see normally?
spk09: Yeah. You know, we've always talked about, you know, aesthetics being a business in which you do have seasonality in the third quarter, and that is in normal conditions. The past couple of years, you know, between our rate of growth, the addition of new geographies, And, you know, the pandemic, it has been hard to, you know, compare. But normally, you would see seasonality in, you know, in Q3. And our guidance contemplates that, you know, that scenario. 45% approximately of our business comes from Europe. And these doctors and their patients are, you know, are going to take a vacation this year for sure. So that's part of that. But that is normal in our business, so we don't see it as a negative. We see it as actually a reflection that things are getting to a more normalized condition in the European market. Furthermore, I think that you're seeing the effects of all the work that we've been doing over the last few years with regards to our science, our innovation. we're launching new products as we speak into new lines like breast reconstruction, continuing to work with MIA. So we're nothing but super excited about the second half of this year.
spk06: Yeah, fantastic. And then maybe just one last one on MIA. I think a lot of investors are excited about that. Could you just give us more detailed and updated thoughts about how that initial launch could progress and when we should start to expect a ramp in the CE Mark countries from that product.
spk09: Yeah, of course. And, you know, we are continuing to prepare very carefully for this launch. We want to make sure, and we have said this in the past, that we do things correctly. This is an entirely new category within breast aesthetics. We have, you know, applied for the CE mark for the tools that are necessary for Motiva Mia, and that is the Motiva injector and the balloon that are necessary for that minimally invasive approach. So we expect approval for that to take place before the end of the year so we can begin our educational activities in Europe. And, you know, After that, then in 2022, well, UCS is working through a list of centers in which we think we will be able to show how we can attract new patients that would normally not go for these type of breast augmentation procedures. And that is the most interesting part about MEIA is not only the fact that it's a price premium over normal breast augmentation, but the fact that you are bringing new patients So, you know, our launch is going to be directed specifically at showing that we can get a different group of patients interested in breast aesthetics.
spk06: Great. Thanks a lot for those thoughts, and thanks for taking the questions. Thank you.
spk07: The next question is from Josh Jennings of Cohen & Company. Please proceed with your question. Thank you.
spk08: Hi, good morning. Thanks for taking the questions and congratulations on the first half of the year and the recovery. I was hoping, Juan Jose, to just get a sense of how impactful you think the recent Langer publication on biocompatibility, Motiva, and the earlier in the year Shear report, how impactful they've been to your direct and distributor sales efforts in terms of driving conversion of new surge in customers and how long you think that the tail is from those two reports. And then my follow-up question, second question would just be, I mean, historically you have transitioned from some markets from distributors over to a direct sales effort. And are there any territories or should we be expecting more movement in the next 12 to 24 months? Thanks for taking the questions.
spk09: Thank you, Josh. Regarding the Langer paper, you know, it is the strongest possible objective scientific evidence why our implants perform better. And, you know, we're very glad that this took place and, you know, especially in a paper like Nature. And, you know, it does confirm once again everything that we've seen in the market with over 10 years and now 1.6 million implants out there over the last, you know, few years. And to us, you know, it is, once again, a confirmation, but there are skeptical surgeons out there. And, you know, we can't wait for the conditions of the pandemic to improve so that we can go and engage with them directly. Same thing with Shear. You know, Shear just happened very recently. It has an impact because it is the first implant know scientific committee worldwide that you know creates a direct causal relationship between texture breast implants and um you know this man-made cancer called alcl so to us it is um you know these two things will be part of um you know of our strategy to capture a new market share but um it's too early you know we we think that you know over the next few years we're going to gain market share from all the things that we are doing, including, you know, this, you know, strongest of proof with the Langer paper and definitely with the results of the share committee. So, you know, when you think about our growth, it comes from so many different places. You know, safety over time is one of those. And these two things definitely confirm that. But, you know, we are going to continue growing with the new initiatives like minimally invasive and breast reconstruction. So at this time, you know, we're not really looking at moving any markets from distributor to direct, nor do we think we need to do so.
spk08: Great. Thanks for those updates.
spk07: The next question is from Chris Cooley of Stevens. Please proceed with your question.
spk03: Good morning and thank you for taking the questions and congratulations on the record quarter. It's very impressive. Just two for me, if I may. First, Juan Jose, if you could speak to us a little bit about as you approach the European market with Flora, or I should say more specifically the reconstructive market in Europe with Flora, what do you need to do tactically that's different versus the approach the company has taken On the AUG side, I'm just curious here a little bit about the incremental investment that might be required. If there's additional data, just help us think a little bit about that ramp and what it entails. And then secondly, for my follow-up, I'm just curious if you could comment as well just from a macro perspective. Clearly we're seeing a rebound here in interest in breast aesthetics coming out of the COVID-19 pandemic. Surgeons are extremely busy right now. I'm curious how much of this you think is a bit of a pent-up demand when we look at the growth rates in the broader market right now relative to just a step function improvement and just the overall interest in the procedure. I'm just trying to kind of tease out what you think is durable as we go into 2022 if we have a step up in the organic growth rates that we've seen historically. or if you see some type of reversion in the second half of next year. Thank you.
spk09: Thanks, Chris. And just to answer both of those questions, I'll start with Flora. We are so happy that we can finally become a key player in the category of breast reconstruction. and the reason we took so long to enter that category is because we wanted to do so in a way that we can transform um you know the state of the art in breast recon and we are doing so with flora flora has so many different features that are you know going to make a difference in breast reconstruction um so of course you know the non-magnetic nature of this device that is the fact that it's rfid enabled you know, the proprietary surface that creates, you know, a healthcare capsule, which is a huge thing in breast reconstruction. Remember that, you know, up to half of, you know, of the women that receive the tissue expander will have a capsule contracture. So this is important. And beyond that, you know, the possibilities with radiation oncology and the things that we can improve there. So there are so many things that we can do. Now, the good thing is we always took a scientific approach to breast aesthetics. So this is not new to us. We have a very strong team, you know, in clinical, in med affairs, and, you know, our sales force is used to handling, you know, scientific messaging. Also, we have our Motiva Edge medical education platform, and we've been using that already during the early experience part of the launch of Motiva Flora. So, you know, to us, when we think about incremental spend, of course there are going to be new, you know, new people involved specifically in breast reconstruction, but our team is very strong and, you know, caters to that type of, of, of products. So I think, you know, is nothing new to the company. We're growing very fast and we're adding capabilities across the board. Now, when it comes to, you know, to pent up demand and how we see the future, The way we are growing, it's hard to respond that specifically. But I can tell you, we can't wait for the pandemic to be over. We don't see the end of the pandemic as a period where we will see reduction in growth. We actually see it as a great time for us to be able to meet again in person with surgeons, especially those surgeons that in the past have been skeptics about Motiva. And same thing with medical education. You know, we will continue to do online medical education, but definitely some of these surgeons will require, you know, in-person medical education. And those are things that we can get done once the situation improves. Thank you.
spk07: The next question is from Anthony Patron of Jefferies. Please proceed with your question.
spk02: Thanks. And first, good luck, Rene, as you go into your new endeavors and good luck to the team as you transition. My questions will be first on China and then pricing overall. So, JJ, I'm wondering if you could just recap the market opportunity around China. It was previously marked at $150 to $200 million within the global market, but at premium pricing. So, just want to get a recap of that calculus. And then As you look at implant pricing, you know, sort of globally, we now have the Nature Report published. Shear was out there earlier this year, and there's been obviously a lot of data behind those two publications on, you know, the lymphoma incidents. And so I'm wondering, has that impacted at all the actual procedure pricing on the surgeon end and by extension implant pricing?
spk09: Yes, thank you, Anthony. And for us, it's always been about showing that non-commodity product in a commodity market can make a difference. And we've been winning market share over the last few years by pricing our products according to the science and innovation that we bring to surgeons and patients. So for us, ergonomics too, just to give you an example, it has that proprietary smooth silk surface. And at the same time, you know, improve chemical and mechanical properties, you know, more ergonomics, more patient comfort, so many different things. So when we think about, you know, the Langer paper is one of so many different components that reinforce our premium pricing. So as we go into MIA, of course, you know, we think that the value that we are creating should be priced accordingly. So we will continue to do that. And when you look at China, China is a premium price country. It's, you know, it's not known to anybody, you know, to everybody. It's about 100,000 procedures a year, and those 100,000 procedures are done with products that are not local to the Chinese market and are priced at the highest ASPs worldwide for any of the manufacturers. So we can't wait for us to gain approval in China so that we can get ahead and bring our products that are seen as luxury products already in China. Before the pandemic began, over 25% of the patients that we saw in South Korea were paying to be able to get Motiva implants in that market. So we certainly do see it as a good indication of what we would be doing in China. And just overall, you know, our patients, Our strategy is to create healthy growth. You see it with the gross margins that we continue to show. And I think those will improve over time as we bring new products and we go into markets like the US and China.
spk02: Thank you.
spk09: Thank you.
spk07: The next question is from Amit Hazan of Goldman Sachs. Please proceed with your question.
spk05: Thanks and good morning. This is Phil for Amit. First, I want to emphasize Anthony's comments for Rene. Congrats and good luck with everything going forward. I'm hoping, Juan Jose, that you can talk about the search process for replacing Rene and maybe the points of emphasis or how strategically you're thinking differently than you did the last time you went through this process.
spk09: Yeah, of course. And good morning, Phil. I think last time we did this, it was pre-IPO. You know, we were, you know, getting set up and there were so many things that had to be done. So, you know, Rene did a phenomenal job in creating a very strong team that could, you know, take us from just being a private company in a region of the world to actually becoming a global company with all the, you know, the respect of compliance rules across the board. This time around, we have the opportunity to think about the future, the company that we will be in 2025. I think the board is trying to take this as a great opportunity to get the person that can align us with that view. Definitely, when we talk about the future, we talk very clearly. Our aim is to become the dominant player in this industry You know, we're bringing new products that are, you know, creating new categories like minimally invasive, transforming breast reconstruction into this aesthetic breast recon concept. And, you know, the way I see this is by having a CFO that is a strategic partner to that view. So, you know, we'll take our time or, you know, making sure that we look at all the different opportunities. And, you know, when it's time, we'll let you guys know.
spk05: That's great. Thanks for all that. The second one, you know, I appreciate the conservatism and forward numbers, but updated guidance does contemplate at least some slowing in the second half from the first half if you look against normalized kind of 2019 numbers. I know you called out vacations probably more so in 3Q, but maybe comment on how COVID variants or vaccine rates may still be limiting procedure volumes and what's sort of contemplated in two-half guidance on the COVID front. Thanks very much.
spk09: Yeah, no, I think that's, you know, that's a fair comment. You know, we are seeing excellent momentum in our business. And, you know, when we think about the second half of this year, you know, we're always going to be conservative. We're always going to take into consideration, you know, the different scenarios. And, you know, just as we see the possibility of the variants making a mass insert in the regions of the world. What we have seen in the last year and a half is that because of the regional spread that we have in our revenue, then when the situation gets tougher in Latin America, it tends to get better in Europe and in Asia and the other way around. So we're very... We're very, I would say, happy with the way the team has performed over the last year and a half during the pandemic. And we think that, you know, it's going to get well over time. As the vaccination campaigns improve, the situation will improve. We saw it in Europe already in the first half of this year. And we think that's going to be the case. But we're mindful of what's going on out there. And I think that's what the guidance says. And, you know, there is a scenario in which, you know, we do even better. So I don't think, you know, we're trying to be too conservative, but at the same time, we're mindful of the situation. Great. Thanks for all the comments.
spk07: The next question is from Marie Tybalt of BTIG. Please proceed with your question.
spk00: Thank you. Good morning, and thanks for taking the questions, and congrats on a great quarter. I did want to ask one on FDA. You've mentioned that the timelines are on track there, and I'm just curious if you've had any further discussions with the agency. I know there had been potential for thinking about an acceleration of endpoints, so I just wanted to hear what the latest was on those discussions.
spk09: Yes, thank you, Marie, and one of the most important things is that just next month, all of our patients in our aesthetic cohorts will have passed a two-year mark. So that is a significant milestone for us. And just as a reminder to everyone, the FDA precedent for approval of silicone gel-filled breast implants is three years of clinical data. So, you know, we continue to explore those options with our two years data now that, you know, we're going to get to that milestone. So I think with that data on hand, we can have more meaningful conversations with the FDA about that.
spk00: Okay, that's great. We'll stay updated on that as well. And then I guess one last one for Renee. We're certainly sorry to see you go, Renee, and wishing you a lot of luck with your next role. I'll sneak one last question in here for you. I thought the cash burn this quarter was impressively low. Very nice job with that. Wanted to hear what sort of got you there and what we can expect for cash burn going forward. You certainly made a lot of progress on that metric.
spk01: Thank you, Marie. I appreciate it. And also the kind words from, from everyone else on the line. It's been lovely working with all of you. So yeah, cash burn, you know, we're committed to it and we're seeing the results. As you can see just from the first half of the year, you know, we will continue to invest in the business. So cash burn will go up from where we are this quarter. But it's been really nice to see how we're managing the balance sheet, leveraging everything and yet performing that, You know, as we've mentioned about, you know, COVID and activities coming back into play, we will continue to see cash burn increase from here. But again, we stay committed to ensuring that overall cash burn for the year is down from pre-pandemic levels.
spk00: All right. Very good. Thanks again.
spk09: Thank you for joining us on today's call and we look forward to providing our next quarterly update in November. Thank you very much.
spk07: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
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