Pear Therapeutics, Inc.

Good afternoon, everyone. Welcome to the Paratherapeutics second quarter 2022 earnings conference call. My name is Bella and I will be your operator today. All lines have been placed on mute to prevent background noise. This call is being recorded. A replay of the webcast will be available in the investors section of the company's website approximately two hours after the completion of the call and will be archived for 30 days. I'll now turn the call over to your host, Mara Murphy, Senior Director of Corporate Communications.

Thank you, Bella. Welcome to our second quarter earnings call, and thank you for joining us today. With me today are Corey McCann, our President and Chief Executive Officer, Chris Guifre, our Chief Financial Officer and Chief Operating Officer, Yuri Maricich, our Chief Medical Officer, Ronan O'Brien, our General Counsel, and Julia Strandberg, our Chief Commercial Officer. I'll turn it over to Ronan for the Safe Harbor Statement.

Good afternoon. Some of the statements we make in today's call may constitute forward-looking statements. This includes statements concerning our future business, operating results, management's intentions, beliefs, and expectations about future results, events, strategies, operating plans, and performance or financial condition, and statements regarding proposed federal legislation regarding P&T. all of which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. Actual results may differ materially from those indicated by these forward-looking statements due to a variety of important factors. Additional information regarding these factors is included in our annual report on Form 10-K and quarterly report on Form 10-Q filed with the SEC. Except as required by law, PEAR assumes no obligation to update or revise these forward-looking statements, even if actual results or future expectations change materially. With that, I'll hand off to Corey.

Thanks, Ronan. And thanks, everyone, for joining us today as we discuss PEAR's second quarter 2022 results. In the second quarter, we made important progress in introducing software-based medicines called prescription digital therapeutics, or PDTs, as a new class of medicine. Once again, we grew revenue with 20% quarter-over-quarter revenue growth in Q2. Then, in July, we cut costs, which extended runway during a period where raising capital could be difficult. As we laid out in our investor day in June, we continued to demonstrate to patients clinicians, and payers that our products can improve outcomes, deliver value, and increase access. The Promise of Payer and PDTs is advancing through our three-prong strategy. By number one, generating advocacy from clinicians, patients, and patient advocacy groups. Number two, generating access for patients by creating coverage density. And finally, number three, generating real-world data that demonstrate durable clinical outcomes and cost savings in excess of product price. We continue advancing software as mainstream medicine. For example, two more states are now providing access to one or more of our FDA-authorized PDTs. Another example, 14 Blues plans now offer formulary access to Reset and ResetUp. And finally, Reset-O has been added as a covered benefit by a subsidiary of Intermountain Healthcare. Each of these milestones represents a step toward our long-term goal of coverage density so that all patients can count on government and commercial payers to pay for PDTs. To share more details on our commercial progress, I'll turn it over to Julia. Then, Yuri will discuss the real-world data for our products that are being published in peer-reviewed journals. And finally, Chris will walk through financial and operating results as well as the steps we've taken to extend Runway.

Julia?

Thanks, Corey. Let's talk about how we're working to meet patients and providers where they are. Demand for our products continue to grow in second quarter with more than 11,000 prescriptions. In Q2, we saw more prescriptions from existing customers, and we added new customers like Cove Behavioral Health, Recovery Connection Centers of America, and Prisma Health. We continue to make progress across multiple payer channels. I'll give you four examples. First, Corey mentioned two new states providing access. North Carolina has more than 10 million residents and an estimated 6% are suffering from substance use disorders. We applaud North Carolina's leadership to allocate opioid settlement funds to create patient access for FDA authorized PDTs for the treatment of OUD. Additionally, we have been awarded an agreement with a Midwestern state that we cannot name yet to provide patients access to RESET and RESET-O. Second, of course, Corey also mentioned the Blues adopting our products. Thanks to our relationship with Prime Therapeutics, Blues plans in Illinois, Florida, Kansas, Minnesota, Montana, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Rhode Island, Texas, and Wyoming all listed RESET and RESET-O on a subset of their published formularies with coverage under the pharmacy benefits. These additions represent an important step towards coverage density in each of those states. Just as importantly, they may encourage other Blues plans to join their peers in providing access to our products. Three, Corey mentioned Intermountain Healthcare. which is the 11th largest nonprofit health system in the US. We established coverage with Select Health, a Utah-based non-for-profit health plan that is a wholly owned subsidiary of Intermountain. Select Health has added Reset-O as a covered benefit for its members across Utah, Idaho, and Nevada. Finally, on the legislative front, PAIR other PDT companies, advocacy groups, and trade groups are securing co-sponsors for the bipartisan, bicameral, federal legislation called Access to Prescription Digital Therapeutics Act of 2022 that would establish a new benefit category at CMS for PDTs. If passed, the PDT Act would require both coverage and payment for products in this category. The PDT Act now has 18 House and Senate co-sponsors from both sides of the aisle. We continue to work with the lead sponsors to identify the appropriate opportunity to attach our bill to the right legislative vehicle, which would ultimately turn our bill into law. If this bill becomes law, it would be a huge win for PEAR and the entire PDT category. Now, I'll turn the call over to Yuri, who will talk about the real-world data that are proving to providers and payers why PDTs should become mainstream medicine.

Thank you, Julia. At our investor day in June, we presented our continuum of randomized control trials, real-world clinical data, and real-world health economic data. We believe that payers want products that are safe, effective, secure, usable, and deliver value. That's why we are providing them a wealth of peer review data to help them understand why PDTs are beneficial to patients, providers, and payers. Let's look at the data we are presenting to payers. Our data show reduced inpatient hospitalizations, reduced emergency department use, durable clinical effect, and overall cost savings. To highlight a few recent studies, RESET reduced overall hospital encounters, including ER visits and inpatient stays, by 50%, demonstrating total cost of care savings of more than $3,500 per patient in six months following product initiation. RESET-O reduced overall hospital encounters, such as inpatient stays, by 28% in the entire cohort, In the particularly expensive and hard-to-treat Medicaid population, Reseto demonstrated a total cost of care savings of more than $3,800 per patient in 12 months following product initiation. Somerisk reduced overall facility services by 53%, with ER reductions of 21%, demonstrating a total cost of care savings of more than $2,000 per patient in 24 months following product initiation. In addition to health economic data, payers are focused on removing or reducing disparities in care across underserved and minority populations. These disparities have many negative consequences for payers. Our data continue to show that our products are effective across different disease states, different geographies, different socioeconomic statuses, and different ethnicities. For example, we recently presented study data at the American Psychiatric Association annual meeting that shows similar engagement with Reset-O among patients across a broad range of U.S. geographic regions, including urban and rural. These data highlight the scalability of PDTs to address underserved and minority populations and to improve health equity for those seeking recovery. As we've discussed previously, one of the great advantages of PDTs is that they collect data as they treat patients. We look forward to utilizing these data to develop larger and longer data sets to strengthen our value proposition and to ultimately provide access to all patients who could benefit from a new class of medicine. With that, I'll hand it over to Chris.

Thanks, Yuri. I'll start off. by sharing financial results and operating metrics. Then I'll discuss our recent cost-cutting measures and the implications for our business. Lastly, I'll share revisions to our guidance and then open the call for Q&A. We reported second quarter revenue of $3.3 million, up 20% over the prior quarter and up 175% over the same quarter last year. This growth rate was lower than our expectations, primarily due to the difficulty in predicting access agreement timing and elongated government sales cycles. Nevertheless, it is a strong revenue growth and further validation of our commercial model. Turning to our four operating metrics. We'll start with total prescriptions. we had more than 11,000 total prescriptions in Q2, in line with our expectations. Please note, however, that in connection with our restructuring, we've begun making changes to narrow the focus of our commercial efforts. These changes deprioritize collecting data from unpaid scripts and prioritize both revenue and data from paid scripts. We believe this prioritization will help us improve payment rates, but it has consequences for total prescriptions. Therefore, we are revising 2022 total prescription guidance from 50 to 60,000 prescriptions to 35,000 to 45,000 prescriptions. Second, fulfillment rate. We had a 56% fulfillment rate, also in line with our expectations. The progress we've made here is a result of efficiencies from product updates, process improvements at our patient services center, and improved integration into clinician workflows. Third, payment rate. We received payment for 45% of filled prescriptions in Q2. lower than our expectations. As I mentioned, we are refining our strategy to focus on paid scripts, and we expect payment rate to be within our guidance range for the remainder of the year. Finally, ASP. Our ASP in Q2 was $1,323 per script, again in line with our expectations. Our strong ASP is indicative of the favorable unit economics associated with our products. Two further financial results to note. One, on June 30th, we had $107.6 million of cash, cash equivalents, and short-term investments on the balance sheet in line with our expectations. our operating expenses were $36.1 million in the second quarter, down $1.4 million from Q1, and in line with our expectations. This result also is in line with our guidance on our last earnings call regarding a small decline in operating expenses each quarter this year. Now let's turn to the restructuring we announced on July 25th. In response to a challenging macroeconomic environment, we've taken significant steps to adapt our operations and, importantly, reduce our operating expenses in 2022 and 2023. We made these decisions to ensure PAIR is well positioned to overcome the challenges to accessing capital that currently face many growth-oriented life sciences and tech companies. Reducing expenses was in the best interest of PAIR, but that did not make it any easier to reduce our workforce. The employees who left PAIR helped us bring our products to patients, providers, and payers. We thank them very much for their contributions to help PAIR further its mission. In addition to reducing our workforce, we substantially reduced work on pipeline candidates, discovery programs, business development, and our dual platforms. We didn't stop there. We also narrowed our commercial efforts to focus our resources on areas of highest coverage density while deprioritizing longer-term opportunities for the time being. As a result of the restructuring, We expect to reduce our operating expenses by approximately $28 million over 18 months. We expect to spend less in Q3 than we did in Q2. And we expect to spend less in Q4 than we did in Q3. We expect quarterly expenses in 2023 to be roughly in line with Q4. We expect to incur a one-time charge of approximately $900,000 in Q3 related to the reduction in force. We expect to extend runway into 2024 in all but the most conservative revenue assumptions. And finally, we expect the combination of lower burn rate and consistently growing revenue to move us closer to profitability. Our cost reductions extend runway in a meaningful way because of PEARS' attractive unit economics. Our unit economics are driven by drug-like ASD and software-like contribution margin. In Q2, we delivered revenue growth while reducing costs, and you will see that trend continue. Importantly, these numbers represent a business with very limited coverage density at this stage of our maturation. Finally, a few words on revenue guidance. Based on where we are after Q2, we think it's prudent to revise 2022 guidance from $22 million to a range of $14 to $16 million. That assumes roughly 20% quarter over quarter growth going forward. It also reflects the nature of our current business, where the vast majority of our revenue comes from access agreements from states, which rarely move as quickly as we do, despite their sincere desire to use our products to fight the growing addiction crisis. As you know, PAIR has not provided formal revenue guidance for 2023. We understand that there is interest in 2023 revenue guidance, and we plan to provide that guidance on our November earnings call. This is a change from 2022 revenue guidance, which we provided in March. Our 2023 revenue guidance will be informed by our 2022 results, our quarter over quarter growth rate, and other factors and information available to us in November. With that, Bella, let's open the call for questions.

At this time, if you would like to ask a question, you will need to press star 1 1 on your telephone. Again, that is star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. Please stand by while we compile the Q&A roster. And our first question comes from the line of Judith Romer with Credit Suisse. Your line is now open.

Yeah, hi, guys. Thanks for taking the question. A couple financial ones. You know, I think maybe there was a planned trajectory for 2023 versus 22 at one point, and there was certainly an inflection expected in sales. So can you just remind us of what the key drivers would be to get to some inflection sales between 22 and 23. It seems like obviously CPT codes have been a part of that conversation. And then secondarily, in terms of the reduced 2022 guidance, any particular reason you didn't do that at the same time as kind of the reorganization announcement? Did anything change since you started implementing steps toward the reduction in force? Thanks.

Judah, thank you for your question. What I'd like to suggest is we'll maybe break it into two parts. Chris, if you wouldn't mind starting off on guidance, and then I'll speak to commercial inflection points.

Sure thing.

So, Judah, the question was why didn't we provide updated guidance when we announced the reduction in forest member structuring? I think the reason is there's two definitely different things going on. Number one is the restructuring was designed as a reaction to the macroeconomic environment and the difficulty that companies like us face today in raising capital and may face for a good part of next year. So that was a decision that was made entirely based on the need to extend runway. And at that point, that's what we wanted to make the public aware of. We provide guidance four times a year on this call. And today we're talking about guidance and we're talking about the different factors driving that, which directly relates to the timing of moving our access agreements forward and has little to nothing to do with the macroeconomic environment that faces or that relates to capital raising for companies like us. Got it.

And Judah, maybe if I can just speak to catalysts for revenue growth. We're very much focused on a concept that we would refer to as coverage density. And that coverage density is in many ways reflective of payment rate, which is a metric that we report on quarter on quarter. As you might imagine, payment rate is really driven by two fundamental levers. One is third party payment via access agreements and payer coverage. And then the second is targeting providers in regions where that coverage exists. Right now, we're very focused on generating that coverage density. And as a great example, you can now see in the state of Oklahoma, we have a value-based agreement with Oklahoma Medicaid, and we also now have a coverage decision from the Blues Plan in the state of Oklahoma. And so that's the way that we plan to go geography by geography. achieve coverage density and then target within that coverage density. That's really what drives the ramp into 23.

Got it. Thank you.

Your next question comes from the line of Michael Sherney from Bank of America. Your line is now open.

Afternoon, and thank you for taking the questions. and working to understand the business. I can ask a question.

We're having a hard time hearing you. It sounds like you're cutting out on a cell phone possibly.

Unfortunately, I am. Can you not hear me?

It's a little bit better now. We can give this a second shot.

Okay. I mean, I'll ask the question quickly. As we learn more about your large and complicated customers, How do we get, how do you get more visibility into the timing of adoption? As you noted, some of the components of really working to best penetrate these formularies.

Mike, thanks for the question. And what I might do is just sort of briefly speak to where we are. And again, our big focus is on states and state Medicaid organizations. Right now, we're engaged with more than 30 of those states. These are conversations that are in various stages of discussions, and some of them are actually quite advanced to the point where states are reaching out to Massachusetts and Oklahoma to really learn how they've turned on coverage. I think what you rightly point out is this is a question of timing. And these are states and organizations that, frankly, don't move quite as quickly as we would like them to. But with all that said, we continue to see really the population of states continue to move forward, and we look forward to being able to produce some coverage wins throughout the balance of the remainder of this year.

Thank you. I'll leave it there.

And your next question comes from the line of Nina from Citi. Your line is now open.

Hey, guys. Thanks for taking the question. I was just wondering if you could talk a little bit more about the growth rate that was assumed in the updated guidance on Scripps. You know, it seems like you did see about a 20% quarter-over-quarter growth rate in Scripps in 2Q, but that was presumably before the restructure and kind of the strategic update in terms of thinking on how you're going to refocus the commercial efforts. So just curious if you could talk a little bit about that and how we kind of get comfortable that that 20% growth rate can continue with the strategic update. Thanks.

Nina, thanks very much for the question. I'd love to tag in Chris to talk a bit more about script growth and the way that we're approaching scripts. Sure.

So I'm going to fold a couple things together. In terms of script growth, It is, in fact, true that we revised our guidance down for script growth because we are going to focus on driving up that payment rate, even if that means missing out on some unpaid scripts that we previously leveraged quite successfully to generate our large body of real-world data that Yuri often talks about. So there is going to be a slowing of the growth rate in scripts The benefit there, of course, is the payment rate we expect, but that should go up. I think the other part of your question relates to sort of revenue guidance, revenue growth, the 20% growth rate that I mentioned earlier in the call. We saw a 20% growth rate Q1 to Q2. as we acknowledged that growth rate was not consistent with our expectations. It certainly is a robust growth rate, but it was not as steep as we expected. That is largely because, A, we are unable to make large organizations like payers and state government move as quickly as we'd like, and, B, we're unable to forecast that with great accuracy, which may go to Mike's question from just a moment ago. We're working on that, but we don't think we have that mastered yet. I'm not sure if we'll ever be able to master predicting the pace at which various state governments move, but we do think we're getting better at it. So as we provide guidance for the rest of the year, we want to try and be as transparent as we can be with the information that we have today. And since we just explained that we did not meet our expectations for revenue in Q2 because the growth rate was not as steep as we anticipated, we are trying to recalibrate expectations based on what we know today. If that growth rate were to slow for any reason, we would let you know that in the next call. If that growth rate picks up for any reason, we will let you know that in the next call. But today, on August 11th, we think it's prudent and wise to forecast growth rates consistent with the one we just saw.

Okay, got it. Thank you.

Your next question comes from the line of Eric Perscher from Nifron Research. Your line is now open.

Thank you. Coming back to your comment about the elongated government sales cycles, is part of the issue here that you've invested in states that you thought were going to be up and running and paying revenue and they haven't gotten there yet? And as you dial that back, does it change the algorithm for how quickly you will extract revenue as states come online?

Eric, thanks for your question. And I think as I mentioned, we've got activities that are ongoing with more than 30 states right now. And so that represents a significant investment on our part. I'd love to again tag in Chris, just to add a bit more color.

Sure. So, Eric, it's a great question. There's a lot of things going on here, so let me just try and reduce it to a couple sort of simple factors. We need, in order to drive our payment rate up, we need to get payers paying, government payers and commercial payers, PBMs, self-insured employers, all the stuff that you know very well, so I won't go into great detail there. We've had some major successes, and we're proud of the successes we had in Q2. But there's a lot of work before we can imagine a world where there's universal coverage for PDTs. And with our small force, we're working with as many of them to move them as quickly as we can. It just doesn't go as fast as we'd like in almost all situations. There is a very similar dynamic that is going on with state government. We are working with many state governments, as Corey just mentioned, both to get Medicaid coverage up and running and to get bulk purchases through access agreements. That process continues to show progress. We continue to add to our pipeline, but getting these deals closed is just not moving as quickly as we'd like. So when you put all that together, what we're seeing is a healthy growth rate and a continuing improvement of the long-term pipeline, but an inability to turn that into revenue quite as quickly as we had anticipated. That's what we're talking about today.

Got it. And as I look at this, the script number is down less than the revenue growth. But I know you said that you're going to focus on revenue paying scripts and the payment rate goes up. So is that in part because of the shortfall this quarter or help me square the revenue being down more than the script number?

Sure. So, Corey, you want me to just keep going? Please go. So the script volume is up quarter over quarter. Revenue is up quarter over quarter. They're in similar neighborhoods, if you will. There is not a simple formula to explain all of that, but I think you've seized on the fact that our payment rate was not quite as high as we expected this quarter.

Thank you. Thanks, Eric.

Your next question comes from the line of Rahul Rakhid from LifeSite Capital.

Your line is now open.

Hey, guys. Thanks for taking the questions. So I know you've kind of touched on it a few times, and you noted that, you know, payers do seem to be pretty receptive. know something you can tell us a little bit more about you know the impact that the clinical and real data has has had on on payers willingness to provide access you know i guess in my mind you know it's a pretty extensive portfolio so i'm just trying to ascertain whether there are any lingering questions on the payers end and if so you know what can those questions kind of be focused on that that the data hasn't already covered

Rahul, thanks for your question. And very briefly, I wouldn't say that there are lingering questions. I think as we mentioned, our products demonstrate durable cost savings in excess of product price, which is exactly what payers are looking to see. I think with that headline, I'd love to turn it over to Yuri to maybe speak just a bit more to some of the details.

Yeah, thanks, Corey, and thanks for the question. I think as highlighted earlier in the call, the evidence and value is a really critical question that providers as well as payers and formulary decision makers are asking about. And as we outlined in the investor day, and I just summarized some recent studies, we are bringing additional data to bear. And so as Corey mentioned, we now have not only our randomized clinical trial data, but we also have real world clinical outcomes, and real-world health economic outcomes across all three products. The thing now is bringing that to bear to those payer conversations. And just as an example, we recently updated our AMCP dossiers, which are standard dossiers used for most drugs, for all three of our commercial products, which highlight this expanded evidence of clinical and economic outcomes. And we've seen in the past both payers and providers being highly receptive to our data. So we're working to use this new data, the six-month data for RESET, the 12-month data for RESET-O, and the 24-month data for SOMRIS to open up access for additional patients.

Got it. Okay. I really appreciate that. And then, sorry, just switching gears a little bit. Just more on prescribing dynamics. I wonder if you could touch a little bit on the refill rates that you're seeing? Do you see patients, are you seeing it kind of come to a steady state or are you seeing certain use cases where patients are using it over and over and really benefiting from it? Are there any trends and key takeaways that you could speak to?

Rahul, thanks for the question. As you probably know, refill rate is not a metric on which we currently report or provide guidance. That said, as I'm sure you're aware, we have disclosed some public data looking at the health economic and clinical outcomes impact of multiple prescriptions. There does seem to be a positive correlation between the number of prescriptions and the aggregate clinical outcome, so we view that all as very positive. And just as a bit of a teaser, that's an area where you could imagine we might be collecting additional data and putting forth additional publications. Got it. Yeah. I mean, that's kind of what I was looking for.

Really appreciate it. Thank you, guys. Thanks, Rahul.

Your next question comes from the line of Kay and Akai from Chardon.

Your line is now open.

Thank you. You know, within geographies where you have coverage, what sales or marketing efforts are you finding are most successful in getting scripts written?

Okay, thanks for the question. It's a good one. I think as we've discussed previously, we have a hybrid effort, which includes both boots on the ground who are converting prescribers at a clinic by clinic level so really coming in and instituting the products in very much the same way that you would expect to see for an enterprise software solution as opposed to a clinician by clinician detail like you might assume for a pharma product in addition to that we've put up what our teleprescribing capabilities and you saw in q2 our work with groups like pursue care and quick MD to be able to provide remote and directly targetable scripts going into these different areas of coverage density. And I would just lay the guidance that you should expect to see us continue to enact that playbook. I think the demand that we're seeing is strong. The data that we're seeing is strong, and we are turning payer coverage on. I think, as Chris mentioned, it's just a question of bringing those two things together and the timing around bringing those two things together.

Okay, and separately for Somerus, you know, qualitatively, can you speak about where you're at and trying to establish coverage for that?

It's okay. We haven't broken out product-by-product guidance. What we can say is that Somerist is earlier in the process than Reset or Reseto. So, whereas with Reset and Reseto, we've got significant prescribing across most states. We've got robust bodies of real-world and clinical trial data. You may have seen actually yesterday we just put out the first real-world and health economic data for Somerist. So, we've certainly seen that playbook of advocacy, demand, and data be effective for RESET and RESET-O. And you can think about SOMRIST as being much earlier in that playbook. And that essentially will be running the same playbook for SOMRIST.

All right, thanks.

Your next question comes from the line of Marie Thibault from VTIG.

Hi. Thank you for taking the questions this afternoon. I wanted to follow up here, and perhaps I missed it, but I want to hear a little bit more about the strategy you have to focus on the paid scripts and your confidence in payment rates remaining within that guidance range that you've given us. Just want to hear a little bit more about that and whether payment rates have affected prescriber reactions, whether it's swayed them to continue or not continue prescribing, if that's a factor at all for them.

Marie, thanks for the question, and I tag in Chris to really highlight the transition that we're making from spend to grow to grow to spend.

Sounds good. Prescriber reactions, maybe I'll ask Julie to tag in on that, but I'll handle the strategy to de-emphasize unpaid scripts. So, Marie, we don't provide all of our competitive playbook on calls like this, but at a high level, what I want to make sure we try and articulate is that last quarter we introduced a new metric called payment rate because we thought it was important. And we provided guidance for it that was consistent with our experience in Q1 and that we expected to be consistent with our experience for the rest of the year. As we acknowledged earlier in this call, we were below our guidance. That is primarily a function of not being able to move access agreements forward as quickly as we anticipated. So, what we're going to continue to do is focus on moving access agreements forward and focus on moving scripts through in those limited areas that we have moderate coverage density. We are not going to put as much emphasis on trying to bring up new sites where there's no coverage density, where we would generate a lot of unpaid scripts that would be quite useful in terms of continuing to generate more data for URI to analyze, but would not bring in revenue. So, the point here is we're at the point now where we have enough scripts where we can get the data we need from paid scripts, and we don't need to work so hard to generate unpaid scripts in order to get that data.

Does that make sense?

Yeah, that makes a lot of sense. Would love to hear the prescriber reaction to what you're hearing from that early days of the strategy.

Thanks much for the question. Prescriber reaction is positive to make sure that we are focusing on bringing prescriptions to patients that utilize and subsequently we get paid for. Then it adds confidence to the prescriber base as we communicate to them again that their patients will be covered for our products. So net positive early days as we continue to facilitate the strategy.

Okay, that's really helpful. Thank you both for that. And then maybe I can use my follow-up here on the physician fee schedule proposal. You know, there was mention of creating four new HCPCS G codes. Wanted to hear a little bit about what that means for, you know, 2023 Medicare coverage on some of those codes and how it aligns with sort of your expectations or your strategy going forward. Thanks again for taking the questions.

Marie, thanks for the question, and I think in brief, our assumptions for Medicare coverage run through the federal legislation. That's really a place where the new benefit category is required in order to turn on fee-for-service Medicare reimbursement. That said, we did provide comments on the HCPCS code. And in our testimony, we reinforced our position that we believe that discrete HCPCS codes should be assigned. And I think this is reflective of the diversity of different PDT modalities and PDTs that are out there, as opposed to just a single PDT modality or PDT. We definitely don't think that a single HCPCS code is sufficient to cover the array of dissimilar PDTs, but it's a start, and we'll continue to work with CMS to really refine that position.

Thank you.

And I see no further questions at the queue.

I would now like to turn the conference back to Dr. McKay.

HCPCS codes should be assigned. And I think this is reflective of the diversity of different PDT modalities and PDTs that are out there, as opposed to just a single PDT modality or PDT. We definitely don't think that a single HCPCS code is sufficient to cover the array of dissimilar PDTs, but it's a start. And we'll continue to work with CMS to really refine that position.

Thank you.

And more cost savings. We started the third quarter by pausing many projects and reducing our workforce. We're confident that reducing our burn rate was the right thing to do in these unusual times, and we believe that reducing costs while revenue grows is the right thing to prepare at this point in its evolution. That's because it accelerates our march toward becoming a sustainable business. We look forward to reporting our progress in November. Thanks to everyone for your time today. As always, please reach out to Mira Murphy, our head of corporate communications. If you have any new grows, it's the right thing to prepare.