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spk08: Good afternoon. Welcome to Establishment Labs' second quarter 2023 earnings call. At this time, all participants will be in listen-only mode. At the end of this call, we will open the line for the question and answer session, and instructions will follow at that time. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. As a reminder, today's call is being recorded. I will now turn the call over to Raj Dhanoy, Chief Financial Officer. Please go ahead.
spk09: Thank you, Operator, and thank you, everyone, for joining us. With me today is Juan Jose Chacon Quiroz, our Chief Executive Officer. Following our 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 in the meetings of federal securities laws. These include statements on Established 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 certainties that may affect our performance or cause actual results to differ materially from these statements, I encourage you to review our most recent annual and quarterly reports on Form 10-K and Form 10-Q, as well as other SEC filings, which are available on our website at Establishalabs.com. Please also note that Establishalabs receives 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 regulatorily approved. Please check with your local authorities for specific product availability. The content of this conference call contains time-sensitive information accurate only as of the day of this live broadcast, August 8th, 2023. Except as required by law, Establishment Labs undertakes no obligation to revise or otherwise update any statement to reflect or events or in circumstances after the date of this call. With that, it is my pleasure to turn the call over to our CEO, Juan Jose.
spk04: Thank you, Raj, and good afternoon, everyone. Revenue in the second quarter of 2023 totaled $48.6 million, an 18% increase over the second quarter of 2022, and a new quarterly record for our company. We are growing well in excess of our underlying markets, and there are a number of positive catalysts we expect over the coming months, all of which is providing a strong foundation on which to build for 2024 and beyond. Raj will provide additional details on our second quarter performance and our outlook in a moment. On July 19, the five-year anniversary of our listing as a public company, we held the grand opening of our Sulayum Innovation Campus. Over 400 people attended the event, including representatives of the Costa Rican government, plastic surgeons, distributors from around the world, suppliers, and other business partners. The new campus supports our strategic plans with additional capacity and capabilities in R&D, manufacturing, digital media, training, and medical education. This year, we will bring online approximately 35,000 square feet of new manufacturing and warehouse space that more than doubles our manufacturing capacity to over 1.5 million units a year, which is about half the current global demand. We also have the ability to add an additional 45,000 square feet of manufacturing as our growth requires. The new facilities include advanced R&D labs and a global learning center that allows us to produce content that we can stream around the world. The on-site surgical theater and procedure rooms allow for medical education and training that can scale to our global business and help us expand the market and create broad demand for our products. The state-of-the-art facility is designed to be carbon neutral and uses sustainable materials and other green design elements and standards throughout. Our goal was to build a center for creation and innovation where our employees, healthcare professionals, and partners from all over the world can usher new standards for the future of plastic surgery. And with the opening of the SULEOM, we are certain we have succeeded. We are better positioned than we have ever been to create and expand new markets and to make a meaningful change in the lives of women around the world. One of the most exciting near-term opportunities for us is Mia Femtech. With the recent approval in Europe of the tools needed, the global rollout of this new category in breast aesthetics is picking up pace. Our launch activities are centered on creating this new category with our growing list of certified partner clinics. We are strengthening our pipeline of partner clinics with new centers in Japan, Spain, Switzerland, Sweden, Germany, England, Costa Rica, and France, with more requests every week to join. We have created branding and marketing programs localized for each market that are directed at creating and capturing consumer demand. In Spain, where we launched our first campaign in July, the first week saw us generate over 175 leads, 30 of which resulted in patient-seeking appointments. Most importantly, 47% of these patients were not seeking a breast augmentation prior to learning about MEA. As a reminder, as part of the MEA experience, a plastic surgeon can shape the breast in a 15-minute minimally invasive procedure without the need for general anesthesia. The result is natural and discreet with a one to two cup proportionate result. The procedure requires minimal downtime with women returning to most activities the same day. By providing a solution that overcomes many of the obstacles of traditional breast augmentation, we are opening up a whole new group of women to breast aesthetics. It is still early in the launch of MIA, and we remain focused on bringing women into this new category of breast aesthetics as plastic surgeons see improved efficiency with our partner clinics benefiting from better economics. We are seeing early proof points that we can scale this new category with MIA into a multi-billion dollar opportunity. In our aesthetic breast recon franchise, the rollout of our Motiva Flora tissue expander continues. We developed Flora to provide surgeons and the women who receive these devices better options. Despite one in eight women developing breast cancer, tissue expanders before Flora have seen little meaningful innovation in decades. Among the improvements in Flora are a first-of-its-kind RFID-enabled port. which allows for MRI imaging with our artifacts during the time an expander is used after a mastectomy. By being non-magnetic, FLORA also opens new options for radiation oncology treatment. FLORA also features our patented cell-friendly smooth silk surface technology, which can offer improved patient comfort and healthy capsule formation. The market feedback is very positive, and we are seeing an increasing number of clinical publications confirming the benefits of FLORA. A recent publication out of Switzerland was the first in human study to confirm that FLORA does not affect the image quality of artifact-prone image sequences during MRI, a fundamental improvement in the standard of care for women undergoing breast reconstruction with tissue expanders. A recent publication out of South Korea demonstrated that in radiotherapy planning, the Motiva FLORA, with the non-metallic RFID-enabled port showed superior dosimetric results to the heart and lungs versus traditional metallic ports, potentially reducing side effects to these organs. The RFID port materials also reduced artifacts on CT imaging compared to the metals used in conventional expanders. In another recently published paper, scientists at the Medical University of Innsbruck in Austria were able to confirm in a head-to-head study that Flora provides much improved patient comfort and satisfaction in their breast reconstruction journeys compared to an FDA-approved expander. As a global medical device company focused on women's health, Establishment Labs has the opportunity and the responsibility to improve breast reconstruction. Flora is only the first step in our Aesthetic Breast Recon Initiative, where Establishment Labs will offer tools and techniques that allow women to receive reconstructive surgeries that achieve the aesthetic ideals to which they aspire. On China, we are actively preparing for the launch of Motiva with our distribution partner. We continue to make progress in the regulatory process and expect to launch Motiva in this market later this year. We have been in active communication with our partners in China to close the final questions remaining before regulatory approval. In the US, the final module of our PMA was submitted to the FDA in the first quarter and the full PMA has now been accepted and is under review by the agency. The pace of activity and our interactions with the agency remain positive. Clinical sites around the country have now undergone their BIMO inspections, bringing us closer in this process of approval. It is difficult to predict regulatory timelines, but nothing in the process thus far has diminished our confidence that Montiva implants will be available soon to women in the United States. I will now turn the call over to Raj.
spk09: Thank you, Juan Jose. Total revenue for the second quarter was $48.6 million, which was growth of 18%. From a regional perspective, sales in Europe, Middle East, and Africa were approximately 42% of the global total. Asia Pacific, 24%, and Latin America made up the balance. Direct sales were approximately 37% of implant sales, while distributors made up the balance. Brazil, which is our single largest market globally, accounted for approximately 14% of total quarterly Motiva sales. Our gross profit for the second quarter was $30.3 million, or 62.3% of revenue, compared to $27.5 million, or 66.7% of revenue for the same period in 2022. Our gross profit in the second quarter was negatively impacted by higher overhead and labor costs. Direct labor costs were higher in part from changes in foreign exchange rates between the U.S. dollar and the Costa Rican colones. As we report in U.S. dollars, the significant revaluation of the clone over the last year resulted in higher costs in the period. We are also absorbing the early start-up costs for the training and certification of MEA clinics, which is reflected in cost of goods. Average selling prices in the second quarter erupt from the first quarter of 2023 and year-over-year, which confirms that we are providing increased value even while we continue to take market share. STNA expenses for the second quarter increased approximately $4 million to $37 million, and compared to $33 million in the second quarter of 2022. The increase in SG&A in the second quarter resulted in part from our investments in new growth initiatives like MIA, preparations for our launch in the United States, and the underlying growth in our business. R&D expenses for the second quarter increased approximately $2 million from the same quarter a year ago to $6.9 million. Higher personnel costs and increased activity related to the U.S. clinical trial contributed to the higher spending this period. Total operating expenses for the second quarter were $44 million, an increase of approximately $6.1 million from the year-ago period. Net loss from operations for the second quarter was $13.7 million, compared to a net loss of $10.4 million in the same period in 2022. Our cash position as of June 30th was $90.2 million, compared to $66.4 million at the end of 2022. Our cash position reflects the $1.265 million share offer we completed in late April as well as cash used in the second quarter that included approximately $9 million of investment in CapEx, including for our new manufacturing facility, as well as a planned increase in inventories we've prepared for the launches of Motiva in China and the United States, and further growth we expect in the near future. As a reminder, we have two remaining tranches on our debt facility, which total $50 million, and become available on the achievement of sales and regulatory milestones. These, along with the cash we have on hand at Inet2Q, provide us with access to approximately $140 million in capital. Under our current forecast, the cash we currently have on hand, as well as the additional capital available to us under our credit facility, will allow us to achieve cash flow profitability while still funding our growth initiatives. We are maintaining our revenue guidance for 2023 in a range of $200 to $210 million. There are a couple of things to note in the cadence of revenue for the second half of the year. We expect approval and launch of Motiva in China in the fourth quarter. Also, MIA launched in Europe in the summer months, which is a seasonally slower period. We expect MIA consultations to begin in earnest in the third quarter and procedures to contribute more meaningfully in the fourth quarter of the year. Overall, we continue to see good momentum in the underlying business, and we expect to have a very strong finish to the year. We expect gross margin in 2023 to be approximately 100 basis points lower than 2022, which reflects higher overhead and labor costs, the early cost of the global rollout of MIA, and the startup of manufacturing in a new Cillian facility. We continue to see regular fluctuations in gross margin. However, the trend in our gross margin is expected to be positive over time. The prices we expect to realize for our products in the U.S. and China, which are the highest paying in the world, will provide a tailwind to our gross margins as we take share in these new markets. We continue to expect operating expenses as a percentage of revenue in 2023 to be similar to 2022. Operating spending over the near term is reflecting our investments in development and commercialization programs. However, expenses as a percentage of revenue will trend down as we move into these initiatives and begin to leverage our spending. I will now turn the call back to Juan Jose.
spk04: Thank you, Raj. During the opening of the Sulayom campus, we held a discovery session as part of the program. The session highlighted the scientific and clinical foundations that have been laid over the last two decades and which have led to the products we've introduced to the market. Motiva Implants, Joy, Mia Femtech, and Flora are redefining breast aesthetics and reconstruction and are driving the strong growth we are seeing globally. Beyond fundamentally changing the current landscape, the technologies behind them have provided platforms that we are now developing into new offerings. We've taken the minimally invasive platform developed with Mia Femtech and are leveraging it into new minimally invasive aesthetic categories, the first of which is minimally invasive gluteal ergonomic modeling, which we call GEM. The market for gluteal augmentation in 2021 was estimated by ISEPS, the International Society of Aesthetic Plastic Surgeons, to be 523,000 procedures globally, which is a 41% increase from just four years ago. Despite this strong demand, the current options are lacking with high rates of morbidity and even mortality. We have an initial IRB-approved study underway and are encouraged by what we have seen so far. We are early in the development of this new product and procedure and will provide updates as we make progress. Since 2014, our implants have been available with an RFID sensor platform we call QID. The passive privacy-proven sensor provides identification information about the device, such as a serial number, date of manufacturing, and others. 60% of our devices on the market now include the QID technology. And in many markets, women are selecting devices with QID 4 to 1 or more over non-QID devices. We will soon introduce the next version of our sensor platform, which we are calling Zen. This new platform continues to be passive, but is non-metallic and will add additional capabilities, such as the measurement of temperature. This feature, and in particular, core temperature, is a very useful biomarker. And with XEN, we have a device which can provide measurements in real time. Temperature is only the first of what we hope will be a suite of biomarkers enabled by the XEN platform. GEM and XEN are just two of the many exciting things we are working on, and the expanded capabilities in our new Sulayam campus in research and development, medical education, media, and manufacturing will enable us to develop them to their full potential. We remain confident that the target we offered earlier this year of $500 million in revenue in 2026 will be proven conservative. And with the continued contribution of our existing product portfolio and the growing contribution of new solutions like GEM and ZEN, we believe that we will continue to grow at a healthy clip well beyond 2026. I will now turn the call over to the operator for your questions.
spk08: Thank you. We'll now be conducting the question and answer session. If you'd like to ask a question today, please press star 1 from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Thank you, and our first question comes from the line of Matt Taylor with Jefferies. Please proceed with your questions.
spk02: All right, great. This is actually Yong Lee, and for Matt, thanks for taking our questions. I guess to start, you know, maybe on the China launch, I think you mentioned Q4, you know, you're using the same distributor that you had been using in South Korea. and you're going to be replicating a lot of the Korean strategy for the China launch. I guess, you know, since China is a DTC market, I was wondering, you know, how you think about the adoption curve, how China might be different versus some of the other key markets?
spk04: Yes, thank you. And I think it's important to remind everyone that China is the fastest growing breast aesthetics market in the world. And of course we are super excited about this opportunity. Already, you know, in the countries around China, we've been doing, you know, a lot of activities to create awareness about Motiva implants and make them the implant of choice. We are market leaders in Japan, in Taiwan, in South Korea, in Vietnam, and in Thailand, which tells you a lot how, you know, the Asian consumer has seen the opportunity with Motiva as the implant of choice. Before the pandemic, we had around 25% of consumers in South Korea coming from China to get Motiva implants. And when you look at the data coming from China, what you see is that patients request premium brands, that brand reputation is highly valued by hospitals, and our market research shows that there's a good reception and great image to the Motiva brand. So we think that given the importance of this launch and everything that we are preparing with our partner, we will be successful in gaining the same type of traction that we've gained in the rest of Asia.
spk02: All right, excellent. My follow-up is on Mia. Very early in the launch, but wanted to hear a little bit about how you think the launch is going versus your expectations. Sounds like the, uh, the Spanish experience is very positive so far and confirms the market expanding opportunity. Um, you know, how's the Japan launch going? Um, you know, what are some of the positive or negative surprises that you're seeing so far?
spk04: Yes, Mia is, you know, just exciting breast harmonization, new category. And what we are seeing is that this value proposition is opening breast aesthetics to a whole new group of women. Just to give you an example, what we are seeing, for instance, in Spain, where we launched our first campaign just last month, in one week we had 175 leads and that led to 30 patients seeking appointments with clinics. But more importantly, 47% of those patients We're not seeking a breast augmentation. And that's what's exciting to us, is that we are talking about a true new category in market expansion. You know, we're strengthening the pipeline. We now have, you know, new clinics taking, you know, the certification process in place in Germany, in the United Kingdom, and also in even Japan. Now, it's early on, but it's very promising. In Japan, it will go slower for one very simple reason, compliance. We have to comply with many rules in Japan that are restrictive to us communicating directly to consumers. So it's going to take a little longer. There's going to be more word of mouth. But when we see the results, especially the outcomes for patients and the response to the experience, you know, of course we feel like it's going to get there in terms of the patient acceptance and the increase in awareness and satisfaction.
spk02: All right. Thank you very much.
spk08: Our next question is from the line of Anthony Patron with Mizuho Group. Pleased to see you with your questions.
spk01: Well, congrats on a strong quarter here and as well as for the opening in Costa Rica and thanks for hosting. It was a great event. Maybe just pivoting to Motiva, U.S. clearance, obviously the PMA is submitted here. Just wondering sort of the behind-the-scenes mechanics here, how many rounds of questioning do you expect from FDA? And I would assume that there's no panel needed here, but I could be wrong. Is there any thoughts on the need for an advisory panel for clearance of Motiva in the U.S.? And then I'll have a couple of follow-ups.
spk04: Yeah, thank you, Anthony. And, you know, it's important to know that we submitted, you know, the full PMA and was accepted for review by the agency. You know, we are trying to be very careful to keep into the propriety of the trial by not disclosing, you know, too many details. But I can tell you some things that, you know, will give you some comfort regarding your question. You know, about now, all of our clinical sites around the country have now undergone the biome inspections. which is bringing us closer to, you know, the approval. Also, you know, we had the 100th date meeting, which was held in June of this year, and we're still waiting for the, you know, inspection of our manufacturing. But, you know, all of our interactions with the agency have been very collaborative, and the level of interaction is great. So nothing at this point makes us think that there will be a panel.
spk01: Okay. Okay. Just a follow-up, Chair. One would be on GEM unveiled at the Suleon campus opening. You mentioned Juan Jose, 523,000 procedures globally. I'm just wondering if there's any pricing data you can share on gluteal implants relative to breast augmentation. And then one in there, I'll just sneak in for Raj. When we think of the new campus manufacturing, as that expands, but also as we layer in price from China, for instance, and possibly the U.S., you know, how should we think about gross margin, let's say, over the next two years from the 2Q level? Thanks again, and congrats on a good quarter.
spk04: Well, first, the interest from consumers on contour aesthetics, and in particular, gluteal aesthetics, has been increasing over the last few years. And when you look at that number, you know, more than half a million procedures per year, of course, you know, as a women's health company, we are looking to solve for the problems that we see in terms of safety and the quality of the outcomes. So, you know, what is the correct pricing for that procedure? I think we will know as we, you know, we gather more data and, you know, we do more market research. But I think, you know, you know, when you look at MEA as improving procedure compared to traditional breast aesthetics, I think you can use a similar mindset to think about, you know, what GEM could be compared to traditional gluteal options.
spk09: Okay, Anthony. So, on the gross margin, you know, we are absorbing several things right now. As we noted in the prepared remarks, you know, the Costa Rican cologne in particular has revalued about 25% in the second quarter alone. So, we're We're up against that headwind right now. But as we move out of this and into next year and we launch into China and then hopefully in the U.S. very soon, the tailwind at our gross margins is going to be pretty meaningful. You know, the pricing in those markets are the best in the world. And so we expect you're going to see a very nice improvement in our gross margin over the next couple of years.
spk01: Thanks again.
spk08: Our next question is from the line of Joanne Rich with Citi. Please proceed with your questions.
spk05: hey good afternoon guys this is actually anthony on for joanne um thank you for taking our questions um my first just on guidance since there's a some moving pieces with the u.s china launchers can you just talk about what your assumptions are um at the low end of guidance versus the high end of guidance and then just had a quick follow-up thank you yeah thanks for the question you know it is uh there are a lot of swing factors for us over the balance of the year
spk09: You know, we're thinking about the contribution from MIA. Of course, the China approval, which we talked about, we're expecting in the fourth quarter. And there's a lot of different ways that the year could unfold. You know, generally, we're comfortable with the entire range we provided, but it's just very difficult to pinpoint exactly where we'll fall, given all these various dynamics at play.
spk05: That's helpful. And then I thought the sort of information on Spain, on the leads to a consultation conversion was interesting. Do you know how many of those, I think it was 30 patients that sought out the ME appointments. Do you know how many actually moved on to get the procedure?
spk04: Yes, thank you. What I can tell you is that because it is summer, you know, many of these potential patients are scheduling either the appointments or the procedure for after the summer break. In Europe and in particular in Spain, you know, they take off the entire month of August. So, you know, part of what Raj was referring to, you know, is indicative of the way we are looking at MEA. You know, when we think about MEA, we see this amazing initial response that could transform itself into many appointments and potentially procedures. So as that ramps up, you know, we expect to see more and more clinics coming in, and that's, you know, what we want to see with the MEA launch. Great. Thank you.
spk08: Thank you. Our next question is from the line of Josh Jennings with Cowan & Company. Please proceed with your questions.
spk10: Good afternoon. Thanks for taking the questions, Juan Jose and Raj. I wanted to start just on Joy Plus and the ergonomics to implant the premium pricing associated with that program and just to get a better understanding of the momentum this year in 2023 as new countries you're getting approval in launching Joy Plus and the pricing premium associated with that, and how do you see that ramping over the course of the next six, 12, 24 months?
spk04: So as we launch new, exciting experiences like the one we have with Joy, which is a program to promote the Ergonomics 2 platform, what we see is that once... consumers understand the value proposition, they understand that upgrading to these type of offerings is worth the price premium. So, you know, more than 10% of the market in certain countries has been, you know, moving to joy for us. And that's very important because it tells you that, you know, what we came into more than a decade ago, which was a commodity market, no longer is. And we've been able to shape that through technology and through the type of value propositions that Joy embodies. So still many countries that we need to go to with Joy, but definitely super pleased about it. Further to that, I think it's important to recognize that although we are creating a lot of potential awareness and interest with Mia, Some of those, you know, patients are not suitable for Mia. So, you know, Joy becomes like the alternative for them that is high quality and, you know, close in the type of experience.
spk10: Thanks for that. And I apologize for referencing that as Joy Plus and not just Joy. But I wanted to follow up on this topic. And you did unveil a development program for Mia Plus down in Costa Rica at the Suleiman Grand Opening. And I wanted to just, I think you've commented multiple times on the MEA launch so far, but just any signals that MEA or MEA Plus has the potential to cannibalize traditional breast augmentation procedures as well as you move forward with that MEA Plus development program? Thanks for taking the questions.
spk04: So in all the market research that we have done over the last few years, what we have seen is that The market expansion comes from around half of the consumers interested in MEA were not considering a breast augmentation before. The other half were considering it, but when they see MEA, it's appealing to them. Now, given the significant difference in the price points for establishment labs with MEA, I think it is a quite positive development for the company. So either, you know, the expansion that we see in terms of new entrants to the category with MIA alone or the ones that are, you know, moving through the consideration phase and end up in MIA. Both very positive for us.
spk10: Thanks for that. If I could just think one more in for Raj, just on the FX impact in the quarter on the top line, any quantification you provide would be great. Sorry about that. Thank you.
spk09: Yeah, no problem, Josh. It was minimal in the quarter, you know, not really worth calling out.
spk10: Excellent. Appreciate it.
spk08: Our next question is from the line of Marie DeBolt with BTIG. Please proceed with your questions.
spk06: Hey, good afternoon. Juan Jose and Raj. This is Sam Ibram from Marie. Thanks for taking the questions. Maybe I can ask my first question here on the cadence of the back half of the year. And, Raj, I appreciate your comments and prepared remarks. But in terms of seasonality here in Q3, you know, is that something we should expect relatively in line with, you know, 2021 and 2022?
spk09: We do expect seasonality, right? And I think one thing you're seeing probably in our numbers is that the the amount of revenue going to distributors is also increasing, right? And so as our distributors start to experience that seasonality as well, it becomes even more pronounced in our numbers. So we are expecting it's going to show up here in the third quarter as we've seen. So we expect, you know, the dip in the third quarter is probably going to be a bit more pronounced than we've seen, you know, relative to the overall cadence of revenue for the year than we've seen in years past.
spk06: Okay, that's helpful. I appreciate the comments. And maybe just to follow up here on some of the questions out of the initial Spain experience for Mia, you know, in the past for typical breast augmentations, we've heard that it takes anywhere from months to a few years to, you know, for a patient to decide to go through the procedure. But it sounds like with Mia that's potentially accelerating some of that conversion. Just wondering if that was something you think is a phenomenon that's maybe translatable to the broader market for Mia.
spk04: I think it's one of the most interesting things because, you know, the consideration phase in traditional breast augmentation tends to be around four to eight years. So, you know, when you look at the group that was not interested in a traditional breast augmentation, you know, that would signal that their cycle of decision making is made a lot easier by the fact that you are removing all these obstacles, you know, from the decision. And I think that's absolutely logical. And then when you look at the group that was considering a breast augmentation, what you see is that, you know, Mia, again, is getting them through the finish line by, you know, removing the obstacles that they were looking at.
spk06: Thanks for taking the questions.
spk04: Thank you.
spk08: Our next question is from the line of Neil Chatterjee with B. Riley. Please proceed with your questions.
spk07: Yeah, good afternoon, and thanks for taking our questions. Maybe just sticking with Mia, you touched on Spain. Just curious how that kind of initial experience is maybe similar across the other European countries or centers. And if not, if there's any other anecdotal feedback you've gotten from those centers.
spk04: Yeah, I think what we are seeing is that these clinics that have moved from certification to actually launching, you know, are getting a lot of interest from potential consumers. Now, the summer months did get in the middle of, you know, of this. But I think what we expect is that many of these potential consumers, once they go and get their consultations, will make a decision to go ahead with Miya. So, you know, just to let you know, you know, we have also added another chain of clinics in Japan. You know, we've added two, you know, high, you know, premium clinics in Germany. And, you know, we're adding more, you know, as the summer progresses. So I think that's really good for us because potentially filled that interest.
spk07: Great. And then just one follow-up here for me. I think you talked about the kind of ASPs, you know, being up, I think, sequentially year over year. Just curious, you know, if there's any nuances or dynamics to think about, you know, for the various international regions.
spk09: Oh, hey, Neil. No, I think it's, you know, it's kind of a reflection of a number of things, right? I mean, we are As the earlier question noted, we're seeing Joy start to get more utilization. That's a higher-priced product for us. We've taken a little bit of price in a number of our markets. It really reflects the value that we're bringing with the products that we're taking to market. And so I'd say it's really a combination of, again, that mix and then the pure price we're seeing. And overall, we're pretty pleased at how things are progressing there.
spk07: Great. That's it for me. Thanks.
spk08: Thank you. As a reminder, to ask a question today, you may press star one. The next question is from the line of George Sellers with Stevens. Please proceed with your questions.
spk03: Hey, good afternoon, and thanks for taking my question. I apologize if I missed this. I'm hopping from a few calls, but I was just curious if you could give some color on maybe what you're expecting in terms of contribution within the guidance from China. I'm not sure if you've specifically quantified that but obviously um that approval has been a little bit slower than we'd expected and just curious if that's a potential headwind or risk to the guidance at this point oh hey george um you know we we're not going to provide specifics around the the number right the the amount of revenue we expect from china for competitive and other reasons our level of confidence and approval this year is very high
spk09: We continue to work with our partner in China and ranting the last few questions that we've received. You know, as I noted on an earlier question, there's just a number of different ways that the year can play out with the contribution from EIA, with China approval. And so, again, we're comfortable with the entire range we've given, and it's just really difficult to pinpoint where exactly we're going to fall within that.
spk03: Okay. That's totally understandable. And then maybe switching to EIA. You've announced 14 partnerships so far. I'm just curious how you're thinking about that playing out the rest of this year, what your expectations are, and if you're trying to sort of accelerate those partnerships, maybe what gets that or gets doctors to sign up faster or if this is maybe a purposeful slower rollout and sort of picking and choosing the best partners at this stage.
spk04: No, absolutely. I think what we're trying to do is, you know, accelerate the number of premium partner clinics that we bring on board in Europe. And I think, you know, there's still a lot of space for us to, you know, to acquire some of those premium partners. And also more importantly, you know, we need to train them, certify them and get them to launch. So I think the importance is that as we move, you know, through this and month by month we've been seeing it, we learn more and more what works in terms of creating awareness and what is most efficient. So clinics that come later on will benefit from those learnings.
spk03: Okay, great. Thanks for the time again. I appreciate it.
spk08: Thank you. This is all the time we have for questions today. I'll turn the call back over to Juan Jose Chiros-Cruz. Please proceed with your closing comments.
spk04: Juan Jose Chiros- Thank you for joining us on today's call. We look forward to providing our next quarterly update in November, and we wish everyone continued good health and happiness.
spk08: Thank you. This will conclude today's conference. You may disconnect your lines at this time, but thank you for your participation.
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