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spk06: Ladies and gentlemen, thank you for standing by, and welcome to the MODIS GI Holdings Incorporated second quarter 2021 financial and operational update. At this time, all participants are in a listen-only mode. There will be a presentation by the MODIS management team, followed by a question and answer session. I must advise you all that the conference today is being recorded. I'd like to turn over the call to Garth Russell of LifeSci Advisors. Please go ahead, sir.
spk08: Thank you, operator, and thank you, everyone, for joining us for the MODIS GI second quarter 2021 update call today. Representing the company are Tim Moran, Chief Executive Officer, and Andrew Taylor, Chief Financial Officer, and Mark Pomerantz, President and Chief Operating Officer of MODIS GI. Before turning the call over to management for their opening remarks, I would like to take a minute to remind you that this conference call and webcast will contain certain forward-looking statements about the company. These statements are subject to certain risks and uncertainties, that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will not undertake any obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements are discussed in greater detail in our most recent filing on Form 10-K, and other periodic reports on Form 10Q and 8K filed with the SEC. I'll now like to turn the call to Tim Moran. Tim, the floor is yours.
spk02: Thanks, Garth, and good afternoon, everyone. Thank you for joining our call today. I'm excited to share an update on our business through the second quarter of 2021. I'll start by providing an overview of our commercial progress, which continues to build each quarter. I will then discuss each of our four value creation drivers, which include new product innovation, reimbursement, clinical data generation, and strategic partnerships. I'll then ask Andrew to provide an overview of our financial performance for the quarter. And at the end of our prepared remarks, we will open the call to take your questions. I'm pleased to share that our commercial team continues to build positive momentum in the U.S. market. as we convert more of our targeted hospitals into active PureView customers. In the second quarter, we delivered revenue growth of 95% compared to the first quarter of 2021. Notably, this represents our fourth consecutive quarter of incremental revenue and procedure growth. As a reminder, this momentum is being accomplished through a very lean commercial team that has remained laser focused on securing the support, and commitment from prominent key opinion leaders at targeted U.S. hospitals. Our growth reflects an ongoing recovery from the impact that COVID-19 had on our initial commercial launch for most of the last year. As I've mentioned previously, since the beginning of 2021, we have seen an increasingly stable environment among U.S. hospitals, including procedure volumes and access to GI units. A big driver behind this quarter's success is our team's unyielding determination and perseverance as we create this exciting market. In addition to initiating several important evaluations during the second quarter, we also closed a new customer agreement with Sinai Hospital, which is part of the LifeBridge Health System. As the largest community hospital in Maryland, we are pleased to see them fully adopt the PureView system, including the outright purchase of our capital equipment. Cyanide is another example of our ability to showcase the value of the PureView system as we offer a comprehensive solution that addresses poor visualization during colonoscopy and upper GI procedures. Enhanced visualization can provide improved patient outcomes, faster time to diagnosis, and reduced length of stay. Each of these critical benefits resonate well with the priorities of hospital physicians and administrators. We now have five major hospitals signed to 12-month committed volume agreements, which require minimum quarterly purchases of PureView sleeves in return for the use of our capital equipment. We are actively negotiating additional such agreements, which we anticipate will close over the next two quarters. The value of these initial volume commitments typically ranges between $60,000 to $120,000 of recurring disposable revenues annually. As it relates to outright capital purchases, we are also currently negotiating additional deals that we expect can close in the second half of 2021. While we are encouraged to see some positive movement on capital spending, we believe our volume commitment agreements offer customers the flexibility needed to obtain the Pureview system immediately with the option to purchase their workstation once capital funding is released. In addition, these volume commitment agreements offer several key long-term benefits to MODIS GI. First, they provide us with reasonably predictable recurring sleeve revenues each quarter. Next, they typically provide for higher gross margins on our disposable sleeves. Third, from a marketing perspective, we believe these engagements help us further cultivate awareness, market acceptance, customer relationships, and utilization of our proprietary peer-review system among some of the leading hospitals and renowned GIs in the US. And finally, these agreements have mutually agreed upon minimums that we expect to be achieved and potentially exceeded as we continue to train additional physicians and establish utilization protocols at these sites. To date, all committed customers have met or exceeded their quarterly requirements. The sequential improvement we have reported each quarter gives us confidence that our focused commercial strategy is taking hold and we are setting the company up for significant long-term success. To support and maintain continued growth, we anticipate adding additional sales resources in the back half of 2021. We began this effort in Q2 with the hire of a seasoned sales director who is now responsible for growing PureView revenues in the New York City tri-state area. While we will remain diligent about spending, we expect additional sales resources will have positive near-term return on investment. Now, I'd like to shift gears to our four value creation drivers. First, let's discuss where we are with new product innovation. In mid-June, we commenced our controlled market launch of the PureView Upper GI solution. Our initial focus is on performing targeted evaluations that allow us to demonstrate clinical utility while also gaining real-world procedural experience. This is an exciting new market opportunity that further enhances the overall utility of the PureView system in the GI lab. As a reminder, the upper GI sleeve works off the same PureView capital equipment as our existing colonoscopy product, and the procedures are performed by the same target physicians at the same target hospitals. This new product is a natural extension of our existing commercial strategy. We're in the initial stages of gaining valuable procedural learnings and feedback from key physicians, which we believe will allow us to best position Peerview for use in this new indication. The early feedback has indicated that a key benefit that Peerview provides during upper GI procedures is our ability to enable constant visualization without disrupting the working channel of the gastroscope. Today, without PureView, the working channel is the only method for a physician to access the bleed source, and moving between suction, irrigation, and mechanical tools can be time-consuming and burdensome. We plan to continue to execute our controlled market launch during Q3, and we'll update you on our broader launch plans later this year. I would also like to take this opportunity to announce a pending launch of our third generation of the PureView system, which is called PureView EVS. This system has been under development for the last 12 months, and we anticipate applying for 510 approval to the FDA by the end of this calendar year. The PureView EVS system will provide enhancement to overall ease of use, particularly related to rapid system setup which we expect will take less than 90 seconds. We've enhanced the sleeve design to offer even greater control and navigation for the physician, and the system will support both upper and lower GI capabilities. Another key strategic benefit of the next generation system is we expect our overall cost of goods to be substantially lower. This gives us even greater flexibility as we plan for our entrance into more price sensitive markets and segments such as outpatient and international expansion. With that said, we plan to provide additional details about the EVS system during future calls and events. I am pleased with our team's continued commitment to enhancing our offering and driving innovation as we leverage our first mover advantage. Now let's move to an update on reimbursement. As discussed previously, we have a multi-pronged strategy to secure reimbursement of the Peerview System procedure by both private and public payers. Over time, if we can secure reimbursement, it would help to further accelerate our commercial expansion. As you will recall, in March 2021, we submitted a request for an ICD-10 code at a Centers for Medicare and Medicaid Services meeting. On August 2, 2021, CMS granted the Peerview system a permanent ICD-10 code, which will commence on October 1, 2021. Unfortunately, the Peerview system was not selected as part of the new technology add-on payment for inpatient procedures. You'll remember this was a fast-tracked opportunity, which would have been nice to have, but as we previously stated, gaining add-on payment for Peerview for hospital inpatient procedures was not a necessity as we believe we do not face reimbursement headwinds in the inpatient environment. We will continue to execute our holistic reimbursement strategy and will keep you updated on our progress each quarter. Moving to our third value creation driver, the generation of new clinical data. In June, we announced the publication of an article presenting data from the REDUCE study in the peer-reviewed journal BMC Gastroenterology. Among the important findings presented in the article, in which we have continued to emphasize since data from the REDUCE study was first announced, is the PureView system's 97% clinical success rate. We believe this overwhelming outcome clearly supports our claim that the PureView system improves bowel preparation quality in hospitalized patients undergoing colonoscopy. As we continue to drive commercial sales in hospitals, It is publications like this that help us educate the market on the potential for the peer review system to enhance patient care while also lowering costs for hospitals and payers. If you are interested in reading this peer reviewed article, it can be found on our website, modusgi.com. Also during the second quarter, we announced the peer reviewed publication of new data from a company sponsored cost effectiveness and resource allocation analysis of the peer review system. on the outcomes of cost, quality of life, and avoidance of colorectal cancers as compared to the current standard of care for outpatient colonoscopy. This data was published in a journal titled Cost Effectiveness and Resource Allocation. We believe there are important and compelling findings outlined in this article that show the use of the PureView system has the potential to generate lifetime savings compared to the current standard of care for outpatient colorectal cancer screening. As a side note, we believe this new data can potentially be helpful in our efforts to gain outpatient reimbursement for the PureView system. In terms of active clinical studies, our investigator-initiated study at the Cleveland Clinic continues to enroll patients. This study is evaluating the clinical and economic benefit of using the PureView system in patients with emergent lower GI bleeding. This study is designed to enroll at least 20 patients. patients will not undergo standard bowel preparation as the physician will utilize just two tap water enemas in conjunction with PureView, allowing for faster time to diagnosis compared to the current 24 to 36 hours typically required to complete traditional bowel prep. The outcomes we received from this study could begin to challenge the current standard of care for critical lower GI bleed patients. In June, we also announced that we have begun enrolling in outpatient study in Europe. This study is evaluating the clinical outcomes in outpatients who have had a history of poor bowel prep. The study protocol uses PureView in combination with a low volume bowel prep and limited diet restrictions. If successful, this study could lead the way for our PureView system to change the management of patients who struggle to get an adequately prepped colon due to their age or medical condition. The study will enroll approximately 44 patients across two sites in both the Netherlands and Germany. The primary endpoint for the study is improvement of the bowel preparation from baseline to post procedure as assessed by the Boston Bowel Preparation Scale. The study will also look at key clinical endpoints related to the quality of the exam, including the detection of critical pathology in the colon. Let me now turn to potential strategic partnerships. We continue to advance our dialogue with several potential strategic partners. Our focus is finding pathways to accelerate and expand our commercial efforts in the U.S. and in targeted regions outside the U.S. We are also discussing opportunities for enhancing our technology development with the aim of being able to unlock value for our shareholders. As we continue to drive greater utilization of Peerview in the US market, we believe strategic options that fit our criteria and are actionable may become available for consideration. Additionally, we are seeing new interest by strategics following our announcement of the launch of Peerview for upper GI procedures. In summary, we believe we're making important commercial progress and have deployed a highly disciplined and focused approach to build the market and capitalize on the four value creation drivers, each of which have the potential to greatly enhance the momentum and trajectory of our business in 2021 and beyond. Finally, before turning the call over to Andrew, I want to briefly mention on today's call how excited we are to have Sonia Nelson join our Board of Directors and as our Chair of the Audit Committee. Sonia is currently the Chief Financial Officer of Ambrex, and brings more than 25 years of financial and operational leadership expertise to our board. We're fortunate to have her join us and pleased to have an additional accomplished executive join the board of MODIS GI. Andrew, I will now turn the call over to you.
spk03: Thank you, Tim, and thank you everyone for joining us today. We reported revenue for the second quarter 2021 of approximately $100,000. as compared to $1,000 for the same period last year. As Tim mentioned, this quarter also represented an almost doubling of reported revenues compared to the first quarter, 2021. For the three months ended June 30, 2021, we reported a net loss of approximately $4.7 million, or 10 cents per basic and diluted share, compared to a net loss of $4.4 million or 15 cents per basic and diluted share for the same period last year. During the second quarter, net cash used in operating activities and for the purchase of fixed assets was $3.2 million as compared to $4.3 million for the same period of 2020, a reduction of approximately 26% year over year. At June 30, 2021, We reported $26.4 million in cash and cash equivalents. This balance included $8 million from our 2019 term loan with Silicon Valley Bank. In July 2021, we refinanced this loan and increased our credit facility by 50% up to $12 million through the execution of a new loan agreement with Creos Capital. There are no financial or liquidity covenants associated with this credit facility. Additional material terms related to this transaction can be found in the company's 8K filed with the Securities and Exchange Commission. Our current cash balance allows us to continue executing on our value creation drivers and is expected to meet our overall anticipated cash needs through 2022. And with that, I'll now turn the call back over to Tim.
spk02: Thanks, Andrew. In closing, we remain committed to continuing to build a strong foundation of loyal Peerview supporters and capitalize on our first mover advantage as we build this large market. We will continue to closely monitor the impact of the COVID variants on U.S. hospitals, but to date, we are encouraged by the rebound in GI procedural volume in the U.S., as well as our access to hospitals and physicians. We intend to work with our customers to ensure access to our technology and expect to continue to ramp procedure volumes in the back half of 2021. I'll now ask the operator to open the call for your questions.
spk06: Thank you. And ladies and gentlemen, at this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press the star key followed by the number two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question comes from Matthew O'Brien with Piper Sandler. Please state your question.
spk00: Hi, everyone. This is Simran on for Matt. Thank you for taking the questions. I want to start off on upper GI. Based on the feedback you're hearing from physicians in your pilot cases, I think you had mentioned 20 to 25 sites previously. Do you expect a relatively rapid uptake of the product once you launch, especially in those five major hospitals that are signed to the customer agreements? And then, can we expect any meaningful revenue contributions possibly later in Q4, or should we be thinking of it as a Q1 2022 event with, you know, robust acceleration throughout the year?
spk02: Great. Thank you. Thank you for your question. I appreciate that. So, just let me clarify one point. So from an upper GI perspective, as you mentioned correctly, we're in our controlled kind of market release. We are targeting 20 to 30 procedures in this time period to get feedback, so procedural learnings, real-world feedback. So I just wanted to clarify, we do not have upper GI in 25 sites today. However, we do expect to complete that work over the next month or two. And I think we'll be in a better position during the Q3 call to provide more detail in terms of how we see the broader launch plans going and timing of revenues and things like that. I think it's premature. Right now, it's really important that we continue to get these learnings under our belt. But what I will say is there's a lot of enthusiasm about this product, the unmet need in terms of visualization during these very critical upper GI bleed procedures. is something that physicians have really been clamoring for. And some of the early feedback that we've seen is PureView is providing constant visualization. So through our irrigation and our suction port, they're getting constant visualization at the site of the bleed without us obstructing the working channel of the gastroscope. So as I mentioned in my prepared remarks, the reason that's so important is today, they have to work through that working channel for everything. So if they wanted to, you know, connect a suction pump or an irrigation pump, they obviously can't then be using a mechanical tool to break up a large clot. So they're constantly going back between different, you know, modalities through that working channel. With the use of PureView, it opens up the channel for their tools and lets them, you know, work consistently. So we're excited, but it's early. And as I said, we'll continue to provide more detail and most likely at the next quarterly update.
spk00: Okay, very helpful. Thank you for the clarification on that. Next, on your minimum sleeve purchase agreement, I think you had mentioned first-year utilization was going to be roughly seven to ten procedures per month in each of these accounts. Is that still the case, or have you seen faster uptake?
spk02: So we're still comfortable with that as in very early prediction of these accounts when they first get up and running. And the reason for that is we typically have one or two key physicians that have trialed the product, have supported us through the value analysis committee approval, and are active on day one. However, the focus of our sales organization, and particularly over the last two quarters now that we've been back out with access to our accounts, has been driving new training and bringing more physicians on at these sites that have approved and are now purchasing Peerview. So I think 7 to 10 is a good number to start, but we absolutely expect these accounts to do well more than that over time. And our earliest sites, what I will say is the sites that got converted in the first part of the year, we're starting to see that number tick up each month and each quarter as we train more docs. So absolutely the way we're looking at it. So driving, you know, bringing on obviously new customers, but also driving deeper into our accounts, if you will.
spk00: Okay. Got it. And lastly, looking at gross margins, so the street had you modeled at roughly 21% for Q2, which you guys handily beat at 58%. Is that a run rate we should base off of for the remainder of the year? And How do you see that evolving as you eventually launch the upper GI product and your next generation peer review system at higher volumes?
spk02: Sure. So what I'll say on that, I don't want to get into specific gross margin guidance, but, yes, you saw the 58% this quarter. There's still, and I'll deem it, you know, there's still noise that comes into the the gross margin number when you're in the process of doing, you know, a lot of evaluations as well because of the way, you know, GAAP rules, you know, have us account for evaluation products. But what I will tell you is I think what you see here this quarter is actually still lower than where we expect to be over time, you know, at a steady state in terms of our current COGS and then certainly as we move forward to the next generation. Does that help?
spk00: Yep, that does. Thank you.
spk02: Great. Thank you.
spk06: Thank you. Our next question comes from Jeffrey Cohen with Lattenberg Salmon. Please state your question.
spk07: Well, hi, Tim, Andrew, and Mark. How are you?
spk02: Hey, Jeff. How are you?
spk07: I'm doing fine. Just two from there, and I think, firstly, could you talk us through a little bit about the commercial organization now?
spk02: size and uh focus and geography and then walk us through uh how that may advance over the coming uh few quarters sure yeah jeff um what i'll say is um first of all you know coming into this quarter we have three uh sales directors um that uh you know is the size that we've been running with since we resized the organization you know in march and april of 2020 due to covid They're currently, as you'd expect, in some of the larger metro areas, California, Texas, the Midwest. And then we just brought on, as I said in the prepared remarks, this quarter we brought on a new director that's covering kind of the northeast, greater New York City, tri-state area. So we've been going with a lean team, and this team has done a terrific job to date. But if we just think back to the strategy that we kind of talked about upon on the original launch of Peerview. You know, we talked about the first year being all about building the foundation, you know, getting validation from large sites, getting KOLs on board, clinical data that supports, you know, our efficacy and outcomes. That obviously gets that back, as we've discussed, with COVID. So 2021 has really become the year to kind of finalize that work. But I think now we, you know, as we look at the opportunity, as we get into the the end of this year, you know, we believe that we start to lean into the commercial organization. So, you know, as I said, we're going to be very cautious. Obviously, this COVID variant, you know, is a very dynamic situation. You know, even just in the last, I would say, four weeks or so, you know, I think most people saw the comments that were made in Texas, which is obviously concerning to hear. But we believe that, you know, we're getting – we're getting to that point of where we can start to really scale into this opportunity. I don't want to put specific numbers on it, Jeff, but you will see us add, um, a few people, uh, to the team before this year is out.
spk07: Got it. Okay, perfect. And then secondly for us, talk a little bit about, um, I missed the actual number. You were speaking about the, uh, the outpatient in Europe study and two centers, Netherlands and Germany. How many patients was that or will it be? And also, could you talk about, um, Others, as far as other centers involved in the study or other studies in general? Thank you.
spk02: Sure. Yeah, so the answer on the European study, it's expected to be a 44-patient study, and that will be between two centers, one center in the Netherlands, one in Germany. I'll ask Mark if he wants to provide any additional color on that study. Mark, I'll hand it to you.
spk04: I think you hit it correctly, Tim, with the 44 patients. It is a powered study against historical controls in this population that has a history of inactive PrEP. We do expect to get some nice statistics on the ability for improvement in this patient population.
spk07: Okay. When might we expect that?
spk04: We're targeting completion of enrollment by the end of this year.
spk07: Okay, perfect. That does it for us. Thanks for taking the questions.
spk04: Okay, yeah, thanks, Jeff.
spk06: Our next question comes from Steve Lichtman with Oppenheimer and Company. Please see your question.
spk05: Thank you. Hi, guys. Tim, you mentioned getting up to five minimum sleep purchases and one capital purchase. I know as of the last quarter, you had a number of potential accounts that you were looking to to do one of those two things. Can you talk about how many accounts are evaluating, and then also currently, and also during the quarter, did you have some that were evaluating that decided not to go either one of those paths, or are they still open?
spk02: Yes, sure, Steve. Listen, as I said, we've taken a very focused approach. I think we've talked about that, and I think we've been smart about how we've been utilizing the lean team that we have. But what I've been encouraged to see is we went a bit deeper this quarter, so we were able to get several of these accounts committed, as we mentioned in the prepared remarks, to quarterly volumes. We were able to get some capital movement with Sinai. We have a handful, I would say, call it between – you know, four and eight accounts that have either finished their evaluation and are now just pending a final approval from VAC to move forward or in an evaluation actively. And then I would say we have kind of low double digits that are in the pipeline pending approval for evaluation that will occur obviously this year. So, you know, with a team of the size that we have, you know, very, very pleased with, you know, the number of accounts that they've been able to kind of move through get completed, and then get new ones started. But as we look at the commercial organization, as I said to the last question, clearly the funnel and the opportunity far outweighs the size of the people that we have. So I think that's why we start to think now about, okay, scaling into this opportunity is going to be important. as we get into the end of this year and into the start of next year, particularly as we talk about the launch of the next generation system, which I mentioned today for the first time, the EVS system, which we think will be even more easily adopted due to some of the enhancements that we're putting into that system. And we expect that to be an early 22 launch if everything goes well with regulatory. So that kind of all comes together nicely, I think, for scaling the commercial organization.
spk05: Great, thanks, Tim. And then just a second question for us. On the strategic partnerships, you've been talking about that for a couple quarters now. Just wondering if you could characterize that a little bit more. Has there been movement such that we could see something in the near to medium term? Obviously, I don't expect any specifics, or is it still sort of a wait and see as as you guys progress commercially and go from there? Just trying to get a better sense of what kind of work is going on on that front generally.
spk02: Yeah, so it's a good question, right? And it's a hard one to provide too much detail with, so I appreciate you kind of asking for just the high level. I would deem these conversations as very active, and they continue to progress with several. I think they range from discussions around broad global relationships, which obviously could be interesting, to very specific geographic relationships, which also might be a nice way for us to accelerate into particularly OUS markets in a timeline that may be quicker than we could do on our own. Part of it, though, Steve, is, yes, the COVID setback, obviously, didn't allow us to get that first kind of year validation work done, as I alluded to earlier. So I think now that we're showing this progress, I mean, I would put Q2 as, like, the cleanest quarter we've had in terms of, you know, no holdups with COVID-related issues. And the team, you know, did well and got a lot accomplished. So I think we continue to do that. And as we get towards the end of the year into the early part of 2022, I think that's probably a timeline where some things could become actionable. Whether or not they're right for us for the value, you know, that they can generate for our shareholders, you know, that, of course, always remains to be seen. But that's probably the best I can give you in terms of, you know, my outlook on it.
spk05: Got it. Appreciate the call, Tim. Thanks. Sure.
spk02: Of course. Thanks, Steve.
spk06: Thank you. And just a reminder, to ask a question, press star 1 on your phone. Our next question comes from Yi Chen with HC Wainwright. Please state your question.
spk01: Hi, this is Bubalan dialing in for Yi Chen. Just a few questions. So firstly, Gen 3 is pretty intriguing, so I was wondering if you could kind of state some differences between Gen 3 versus Gen 2.
spk02: Sure, Bubalan, nice to speak with you. So what I can say right now is, you know, we've had this as part of our product development roadmap So this is something that we've, you know, even when we launched our first gen, that we knew that over time we'd continue to iterate and drive the innovation, listen to our customers, get their feedback, and continue to advance the platform. As I mentioned earlier, really the significant focus that we've done here has been around just continuing to make it easier and easier to use. And I think that allows for broader adoption across the kind of GI specialty So ease of use in terms of setting the device up, I mentioned earlier, we expect that now to be down sub-90 seconds to get set up and utilized. You know, be able to load our sleeve onto a scope that has what can be referred to as a dirty scope. So say the physician starts a case, realizes that the patient isn't clean, they want to use peer review, they could theoretically take that scope out, load peer review, and go right back in and use peer review and complete the case. So some really nice advancements as it relates to usability for the end user, the physician, and the staff. But also, we set our sights out as we thought about eventual market entrance into very critical segments like outpatient or places outside of the U.S. where price sensitivity will become more important to have the development that would reduce our COG. So we believe that this will do both, and As I said earlier, we'll provide, you know, further detailed updates as we get, you know, closer towards the end of this year.
spk01: Okay, that's really helpful. And just some general questions. So how many physicians have been trying to use PureView so far?
spk02: So what I'll tell you is probably the more important question, if you will, is, The growth of physicians that we're having at our closed accounts, so we've been tracking that and what we've seen from the beginning of this year, so in more of a stable sales environment with access and ability to be in the accounts, we've seen the team really double the number of users that we had from January till the end of this past quarter. So we don't want to continue to give an update each quarter on every physician that we train, But what we are seeing, and I think is most important, is that we're getting more and more traction in these signed accounts, which is going to, over time, translate into higher disposable recurring revenue each quarter for these sites.
spk01: Okay, that's pretty understandable. Yeah, so a final question from me. So how do you expect the R&D costs to evolve during the remainder of the year?
spk02: Let me just clarify. Did you ask about R&D costs?
spk01: Yes.
spk02: Okay, sure. I'll let Andrew take that question, Buvalon.
spk03: Sure, Tim. Thanks for the question. You know, in general, our P&L and our cash earn expectations for now the third and fourth quarter, so for the remainder of the year, are expected to be pretty stable. You know, certain activities that we have in place that we've budgeted for last growth in the R&D and clinical area, but it'll be pretty, I'd say, insignificant, maybe a few percentage points higher than what you're seeing in the first couple quarters of the year.
spk01: Okay. Thanks so much.
spk02: Thank you. Thanks for your questions.
spk06: Thank you. There are no further questions at this time. I'll turn it back to Mr. Tim Moran for closing remarks. Thank you.
spk02: Thank you, Diego. Thanks, everyone, for joining the call today. We will look forward to speaking to everybody next quarter and hope everybody stays safe and, you know, know that we are very focused on this commercial execution and very pleased with the performance that we're seeing and hopeful that the COVID situation, you know, remains intact. So look forward to speaking to everyone next quarter.
spk06: Thank you. This concludes today's conference. All parties may disconnect. Have a great evening.
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