This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk06: Good afternoon and welcome to SIPhone's first quarter earnings conference call. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Matt Basko from the Gilmartin Group for a few introductory comments.
spk10: Thank you for participating in today's call. Joining me are Laura Francis, Chief Executive Officer and Anshul Maheshwari, Chief Financial Officer. Earlier today, SI Bone released financial results for the quarter ended March 31st, 2021. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. These forward-looking statements are based on the company's current expectations and inherently involve risk and uncertainties. These risks include the impact the COVID-19 pandemic will have on the ability and desire of patients and physicians to undergo procedures using the iFuse implant system, the duration of the COVID-19 pandemic, and whether the COVID-19 pandemic will recur in the future. Other forward-looking statements include our examination of operating trends and our future financial expectations, such as expectations for hiring, surgeon training and adoption, active surgeons, new products, clinical trial enrollment, and reimbursement decisions are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factor section of our most recent quarterly report on Form 10-K, filed with the Securities and Exchange Commission on March 10, 2021. SI-BOND explains any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 3rd, 2021. With that, I'll turn the call over to Laura.
spk07: Thanks, Matt. Good afternoon and thank you for joining us. Before we get into the details, I'd like to take a moment to thank all the healthcare workers who continue to work relentlessly, especially those who are administering the COVID-19 vaccine. to help reduce the spread of the virus and allow society to return to normal. I'd also like to officially welcome Anshul Maheshwari, our new CFO, who is joining us on today's call. Anshul is an experienced financial executive with an impressive record of building high-performance teams to scale global healthcare and manufacturing organizations. I'm very excited to be working with Anshul and know that he will be a great addition to our team. Now, turning to the results. I'm pleased to report that the SI bone team continues to navigate and push through these unique and challenging times with tremendous effort. We got off to a good start in the first quarter, generating total revenue of $20.4 million, a 22% increase compared to the first quarter of 2020. Although procedure volumes were negatively impacted by persistent COVID-19 headwinds and extreme weather conditions in parts of the country in January and February, We ended the quarter with a record March. I'm proud of our team's strong execution this past quarter and confident in our ability to accelerate our capture of the multi-billion dollar market opportunity in the SACRE public space, especially as COVID becomes less of a headwind to the overall economy and healthcare system. We also started to see signs of a recovery in Europe, with total international revenues increasing roughly 10% compared to the first quarter of 2020. Growth in the first quarter of 2021 was led by relative strength within Germany and France, partially offset by continued challenges in the UK and other parts of Europe due to COVID-19. We also received EU clearance for our trauma indication during the quarter, an additional growth driver as we focus globally on minimally invasive SI joint fusion, adult deformity, and trauma applications in the sacral pelvic space. As an organization, we continue to focus on execution, which is reflected not only in our revenue growth, but also our ability to manage expenses. One of the most impactful initiatives that has increased surgeon utilization rates and reduced costs has been the rollout of the SI bone simulator surgeon training system. We now have 24 SI bone training simulators in worldwide use. This innovative training platform eliminates many of the barriers that we historically had to overcome prior to the COVID-19 pandemic. Our sales and medical affairs teams can now train surgeons on demand, bypassing the cadaver lab, which eliminates radiation exposure for surgeons and staff. Additionally, there are no travel requirements on the part of the physician, which significantly reduces overall costs and logistical planning. While this has been a positive for the company from an efficiency perspective, the key driver has been the positive reception from the surgeon community. The number of trainings continues to ramp, and we expect this remarkable capability will attract many more surgeons in the future. We're targeting the approximately 7,500 spine surgeons in the United States, of which 1,600 have been trained and completed a procedure to date. We're also making an impact, but there is still much opportunity ahead. The enthusiastic reception of our simulators over the last nine months and the ease with which surgeons can be trained have allowed us to more effectively target new surgeons and reengage with inactive surgeons. While we've been able to manage expenses quite well to start the year, we continue to make great progress on expanding our sales force. Specifically, at the end of March, we had 75 direct sales reps and 52 clinical support specialists. and remain on track to end the year with 90 and 60, respectively. Our thoughtful strategy to expand our sales force will allow us to meet our long-term growth objectives. As we have communicated in the past, the productivity ramp for the average sales rep takes approximately 12 months. The reason for this ramp is due to the level of training we require our reps to go through to maximize their success in the field. Further, once in the field, our reps are instrumental in training surgeons through the first few cases, which includes precision diagnosis and treatment protocol. Next, I'd like to talk briefly on our direct-to-patient marketing initiative. Although it's still early, we're encouraged by the results. Our team was particularly excited to see our first patient case from our direct-to-patient marketing test. We're now in the midst of a second TB marketing test program in multiple cities, as well as making improvements in the operations related to patient inquiries to our call center. We'll be evaluating the results of this second direct-to-patient TV test in the next few months. The direct-to-patient advertising strategy is an additional tool to educate patients, and we'll continue to take a measured approach. Turning to product updates, we're also excited to announce the recent launch of iFuse Torque, a highly differentiated, 3D-printed threaded implant. for pelvic trauma and minimally invasive sacroiliac joint fusion applications. iFuse TORC solves an unmet clinical need for low-energy pelvic ring fractures compared to bedrest, sacroplasty, and traditional trauma screws. We're also targeting chronic sacroiliac joint pain after high-energy pelvic ring trauma. Our engineering team incorporated features for stable, bone integrating scaffolding across the joint and fracture site for fusion, improved healing, and earlier patient mobility. Our torque lock threads have a hook design and anatomical zone-specific thread pattern for enhanced fixation, providing approximately 10 times the rotational resistance upon insertion of trauma screws. Based upon these trauma applications, we believe iFuse Torque opens up an attractive adjacent market worth approximately $350 million, where we were not able to compete before. iFuse Torque also has applications in the primary SI joint fusion market. Last year, we estimate our competitors generated approximately $40 million of business in our core market. iFuse Torque leapfrogs these other products, creating an opportunity to convert competitive business. Our Fusion 3D surface mimics cancellous bone for better bony on-growth, in-growth, and through-growth. And our IntelliHarvest technology includes cutting flutes that self-harvest host bone and funnel it into the fenestrations for optimal bone integration. These technological advances may result in more robust and faster fusion of the SI joint. Our corporate web deck on the Investor Relations website has more information on iFuse Torque. While we do not anticipate a meaningful revenue contribution from TORC in 2021, we believe the trauma market represents a key element of our strategy to improve sales synergies, expand our total addressable market opportunity, and become a comprehensive sacral public surgical solutions company. We continue to be pleased with the progress of bedrock. Interest in the bedrock technique among deformity surgeons, including many key opinion leaders, has provided our sales reps with access to important medical centers. This enables our reps to train a broader group of spine surgeons, including residents and fellows at these centers, on both the bedrock technique and minimally invasive sacroiliac joint fusion. To date, we've conducted training courses at over 100 academic centers in the U.S., where more than 600 surgical residents and fellows have been trained. In addition, bedrock is helping drive the growth of our business. We also continue to make progress on our second-generation adult deformity product. On the reimbursement front, we continue to add exclusive coverage from some of the largest health insurance providers in the United States. Most recently, MVP Healthcare established exclusive coverage for the iFuse implant system effective April 1st. MVP Healthcare is now the 38th iFuse exclusive payer, adding an additional 500,000 covered lives. Overall, reimbursement continues to be a tailwind for the company with broad coverage across the United States, with total covered lives eclipsing 300 million, including approximately 80 million lives covered exclusively for procedures using iFuse. We're also excited to welcome Helen Lowe to the Board of Directors. Helen joins SI Bone with over 25 years of experience in brand and growth marketing at both Fortune 500 and early-stage technology companies. Currently, Ms. Lowe is the Senior Vice President of Digital, Product, and Client Marketing at Charles Schwab, where she's held roles of increasing responsibility since 2004. Helen holds a BS in Industrial Engineering and MBA from Stanford University. Finally, the appointment of Anshul completes the recently announced senior leadership transition, which includes me succeeding Jeff Dunn as CEO and being added to the Board of Directors. and Tony Recupero becoming president of commercial operations. As a reminder, Jeff is not going anywhere and will continue to be very involved in the company as executive chairman. Before I turn it over to Anshul, let me close by mentioning our ongoing focus on ESG matters. This focus is an important aspect of our business, and it's an expectation we hear from investors, employees, and other stakeholders. And it's one we take very seriously. In the next few days, we plan to publish an updated environmental, social, and governance shareholder letter on the investor section of our corporate website. If anyone has any questions or interest in our ESG efforts, please reach out to myself, Anshul, or Matt Baxo at Gilmartin. With that, I'll now turn the call over to Anshul, our Chief Financial Officer, to provide more detail on our financial results.
spk01: Thanks, Laura. I'm excited to be joining SI Bone at such a pivotal time. I look forward to partnering with the entire SI Bone team to continue to execute on our growth and value creation strategy, deliver innovative and differentiated products to surgeons, and improve patients' lives. I'm also looking forward to developing strong relationships with the investment community and hope to see many of you at upcoming investor events. Now turning to the financials. Our first quarter total revenue of $20.4 million increased 22% compared to the prior year period. U.S. sales of $18.8 million, which accounted for approximately 92% of total revenue for the quarter, increased 23% compared to the prior year period. International revenue of $1.7 million increased 10% compared to the prior year period. Although procedure volumes were negatively impacted by persistent COVID-19 headwinds and extreme winter weather conditions in parts of the country in January and February, we ended the quarter with a record March as COVID-19 cases started to decline. Similar to what we experienced in the third quarter of 2020, we believe March procedure volumes benefited from an increase in rescheduled cases from November through February. Gross margin for the first quarter of 2021 was flat compared to the prior year period at 89% as higher cost of operations to support the growth of the business were offset by lower inventory write-downs. Operating expenses increased 11% to $29.8 million in the first quarter 2021 as compared to $26.8 million in the prior year period. The increase was driven by higher sales and marketing costs related to increased sales hiring, research and development expenses for new product development, and increased stock-based compensation expense. Our operating loss was $11.6 million in the first quarter 2021 as compared to an operating loss of $11.9 million in the prior year period. Our net loss was $12.2 million or 37 cents per diluted share for the first quarter of 2021 as compared to a net loss of $12.8 million or 47 cents per diluted share in the prior year period. As of the end of the quarter, our cash and marketable securities were approximately $185 million and long-term borrowings were $39.5 million. Now, I'd like to provide an update to our 2021 outlook. While encouraged by the strong underlying momentum in our business, we remain cautious given the uncertainty surrounding COVID-19 cases and the potential impact on hospitals and AFCs. Our guidance is highly sensitive to assumptions on a global recovery, which anticipates continued progress on vaccinations and immunizations, resulting in normalized case scheduling and elective procedure levels progressing throughout the year. While the first quarter was a good start to the year, we continue to take a measured approach given the early stages of the COVID-19 recovery. Based on this, we continue to expect total revenue of $92 to $94 million, representing growth of 25 to 28% compared to full year 2020. Additionally, we expect to end 2021 with approximately 19 direct sales reps and 60 clinical support specialists, up from 64 and 58 respectively at the end of 2020. Lastly, we expect gross margin to trend towards the mid to high 80% range in 2021 as we increase spend in operations to support growth of the business. I will now turn it back over to Laura.
spk07: Thanks, Anshul. I'm excited to become the CEO of SI Bone during this period of inflection and market development for the company. I greatly appreciated the support and enthusiasm of our employees, board, and investors since the announcement in January. I've been with SI Bone for six years, and I can say without hesitation that it's been the best experience of my career. Jeff Dunn, now our Executive Chairman, blended vision and grit to lead us through the early stages and challenges of building a new market. Tony Recupero, now our President of Commercial Operations, has been my thought partner since joining the company, understanding from his experience with Kaifan and other companies how to build a market and rapidly expand a sales team in our space. Anshul will bring a new perspective to our leadership team, positioning us to accelerate our capture of the multi-billion dollar Sacral Pelvic Solutions market. Anshul and I look forward to meeting our investors to discuss our market development plans. I'll now turn the call over for questions. Operator?
spk05: Thank you. Ladies and gentlemen, if you'd like to ask a question, please press the star, then the one key on your touch-tone telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Bob Hopkins with Bank of America. Your line is open.
spk12: Oh, great. Thank you, and good afternoon. Laura, as a place to start, it sounds like the strong March bookings you guys talked about on the last call turned into strong March revenue. And so I was just wondering, what we've seen from some other companies is that maybe March was around 40% of the total quarter, given the slow start to the year. Is that a rough way to think about what happened to you guys in March, and did you continue to see decent trends in the month of April? Thank you.
spk07: Thanks, Bob. In terms of how the quarter developed, we had talked about January and February being impacted by COVID cancellations, but then, as we mentioned, actually seeing a record March. In terms of how we're looking at that, we think that a couple of things happened in March. First of all, we were not hindered by cancellations due to COVID. But in addition to that, we benefited from some of those rescheduled cases. We've been fairly open about cancellations that we saw in the month of November, December, January, and abating a little bit in February. So we think that March really accounted for Both of those, the increases that we saw in March were a result of those particular items. In terms of what we actually saw in April, April continued to show strength. However, a little lower than March, given that March was a high watermark for the company overall as a business. As I said, the scheduling of cases is dependent on several factors and And COVID-19 has increased some lumpiness in the month-to-month trends. But with that said, as the risk of COVID-19 continues to subside, we remain confident that the demand for our solutions will continue to drive steady volume growth throughout 2021. Okay.
spk12: Well, yeah, thank you for that. So I assume then from the sound of it that maybe March was a little bit better than 40% of the total quarter, right? just given your comments there. Is that roughly fair?
spk07: I would say that it's in the range of what you just mentioned.
spk12: Okay. And then are there, and I hear you on the trends in April, but just generally as you look around all of your geographies right now, are there any that are concerning you or going the wrong way, or do you see kind of broadly speaking general momentum across the board?
spk07: For the most part, we're seeing the momentum across the board. There are still pockets. For example, whenever we see news reports about COVID surges, for example, in Michigan, we do tend to see... you know, results that would be consistent with those challenges. And so that's part of the reason why we're guiding in the way that we are for the year to continue to stick with our current guidance and just be cautious, you know, through the second quarter of this year as COVID works through the system.
spk12: Right. That makes total sense. And then last really quickly on the IFU's torque, I think you're calling it, are you modeling any revenue for that in the guidance? And when will that be kind of rolled out to the sales force?
spk07: Yeah. We did put a little bit of revenue from TORC into our expectations for 2021, but a small amount. What we really want to do is to give it time to to grow into those numbers. And so that's the way we've actually approached it. In terms of the launch, the launch has been completed in the US. So we actually got clearance in February and then the US launch occurred in April. So that product is available to our surgeons at this point in time.
spk12: Excellent, great. Thanks for taking the questions.
spk07: Thanks, Bob.
spk05: Our next question coming from the line of CaliCrop with Truth Securities. Your line is open.
spk08: Hi, guys. Thanks for taking our questions. Congrats to Laura on your new role and Anjul for joining a great team. Thank you. Of course. It sounds like you guys had a great end of the quarter, strong performance through April, but out of an abundance of caution, you're maintaining your guidance first. Is that correct? Is that right? And second, if trends continue to persist like they have in March and April, where do you think that revenue could end up for the full year 2021? Is it crazy to think you guys would be growing in the mid thirties or, or higher?
spk07: It's a, it's a great question. And, and as you said, Kayla, what we're doing is we're being conservative given that we're coming out of this period, uh, and point in time. And, uh, And as I said, we also do expect that there may be some lumpiness as well in the development of the return of the business. And so for all of those reasons, that's how we're approaching our guidance. With that said, we are really excited about the long-term opportunity for iFEWS with these headwinds eliminated. We're very excited about bedrock and its continued development in adult deformity. And then the new TORC product, we're pretty excited about, too, both in trauma as well as in primary SI joint fusion. So we have a lot of different opportunities and tailwinds that could really catapult us this year. I don't want to speculate on what those numbers could look like at this point in time, but we're excited about the potential in a lot of different areas.
spk08: That makes a lot of sense. Thanks, Laura. And then just to follow up on TORQ, it sounds like you guys have about $40 million in sort of potential low-hanging fruit to go after and then $350 million in an incremental opportunity. So first, is that the right way to think about it? And then second, do you see any reason why this couldn't be, you know, a $5 million to $10 million product in 2022? Or how do you see this thing sort of scaling over the next 12 to 24 months? Thank you for taking the question. Thanks, Kayla.
spk07: You are looking at it in the right way. The $40 million is the opportunity that we have in the primary SI joint fusion market, and we are already starting to see some of those competitive conversions at this point, and we just launched the product last month. So We're excited there. What's equally exciting is seeing some of these trauma cases come in as well. Given that that's a different call point, we thought that it may have taken a little bit longer for us to actually see more of the potential in the trauma market, but Given the product and the different features of the product, it does seem to be resonating more quickly than we thought in that adjacent market. So excited about both and think both present great potential for the business now and into the future.
spk08: Thanks, Laura.
spk05: Thank you. Our next question coming from the line of Drew Raniere with Morgan Stanley. Your line is open.
spk09: Hi. Thanks for taking the questions tonight. Laura, I know you've talked about the surgeon training being a great tool for driving adoption. You've talked historically about moving from three cases to four cases, but As you've trained some of these surgeons in the near term with the simulator, are you seeing any difference in utilization from surgeons that are using the simulator versus more traditional methods?
spk07: Yeah, it's a good question. It's a little early to know the answer to that question, Drew. But, you know, suffice it to say we're pretty excited about the simulator and the opportunity that it presents. 24 simulators in the field at this point. Last year, and by the way, 21 of those are in the United States and three of them are in Europe. Last year, we had four simulators in the U.S. and one in Europe. So we have very significantly increased the potential with the simulators and the ability to train surgeons. And Given that we have 7,500 target surgeons and only 1,600 of them have been trained and performed one procedure, it gives us a lot of opportunity to pretty rapidly grow the number of surgeons. In addition, our active surgeon numbers per quarter, it was a little less than 600, again, for the first quarter. and that compares to that 1,600. So there's 1,000 that are inactive, and we're actually seeing a lot of surgeons who have been inactive being trained with the simulator too. So we're really excited about the potential with the simulator and think that it is going to help us to convert and newly train a lot of these surgeons.
spk09: And with the simulator, the new trauma product, also has an application, or the simulator also has an application with the new trauma product, or would that be rolled out at a future date?
spk07: It actually is going to be rolled out at a future date, so we're in the process of doing some software work with the simulator in order to get Torque to work with the simulator as well, but expect that shortly.
spk09: And then just one last question on gross margin guidance. I think looking at the presentation, it was 85% to 89%. You just did closer to the high 80s this quarter, but just can you help us frame the low and high end? Is that kind of just all mix-driven, but I would love to get your thoughts there. Thank you.
spk07: Thanks, Drew. There's really two factors that are at play here, and one of them is just the impact on ASP over time. So, I think, you know, we have said in the past that, you know, we want to make sure that we are competitive in the marketplace in terms of pricing. On average, our pricing of our core iFEWS product has been declining two to three percent per year. We did see some acceleration of that last year because of a move from outpatient hospital primarily to more in the ASC setting where there is more competitive pricing pressure. And so that's a factor and that's the first factor. The second one is the product mix that you just mentioned. So bedrock and trauma applications on average are using two implants versus the three that are used in primary SI joint fusion. And so you're getting a price there of a little over $6,000 for those particular cases versus a little over $9,000 for our core iFuse product.
spk09: Great. Thanks for taking the questions.
spk07: Thanks, Drew.
spk05: Our next question coming from Delaina, updates are calling with JMP Securities. Your line is open.
spk00: Hey, good evening. Congrats on the hires as well in terms of the sales force. I guess if we look at sort of the split, I'd love to get any color. Are the CSS people being promoted, and that's driving some of the ads to the direct sales part? I guess your thoughts on sort of the trends in those two areas, and are you adding a bunch, or are some of the people getting promoted?
spk07: Yeah, very good question. So it's a mix of both. On average, I would say that the positions that we filled for the TM role, around 50% of them have come from promotions from the CSSs, and the other 50% have been outside hires. So this is exactly our strategy, where we obviously have a pretty rapid growth strategy in terms of our sales force. And so the idea is that we hire... more junior reps of CSSs that when they're ready to be promoted in a particular territory is ready to be split. If we can, we'd like to promote those people, if not hire from the outside. The other thing to just take into consideration is it's been very important for us to build our sales management structure as well. And so we actually promoted a couple of people from TM to regional sales director and actually one of our regional sales directors became an assistant vice president, too. So there's a lot in those numbers, David, that you're looking at, but you're correct that a big part of the funnel for the TM role is coming from the CSFs.
spk00: Got it. And then as a quick follow-up, you know, that slideshow from last time where you did talk about the competitors having something, you know, in the ballpark of $40 million in sales. Okay. As we look at that comment you made on this call, are you saying that the competition, the other players in this market are primarily doing trauma cases today and that's how you're looking at their business? And I guess if that's true... No, that's not the case, David.
spk07: So let me make sure to clarify. There's two different market opportunities with TORC. So the first one is actually trauma, which is around a $350 million market and It's targeting trauma surgeons, and it is getting at pelvic ring fractures, both high impact and low impact. And that's a completely new and adjacent market, and that's not a market that the historical SI joint fusion competitors are operating in, at least not from the perspective of their SIJF products. So that's the larger opportunity. The second opportunity is the $40 million of sales that our competitors are doing. And that's exactly the market that we're talking about right now. And that is primary SI joint fusion that our competitors are targeting with their particular products. And we quite frankly think that we have leapfrogged their products in terms of the capabilities and technical aspects of Torque, and it's going to be an opportunity for us to basically get low-hanging fruit.
spk00: Got it. Thanks for cleaning that up. Appreciate it.
spk07: No worries. No worries. I'm glad you asked.
spk05: Our next question coming from the lineup, Brennan Hooks with Cancer Pistole. Your line is open.
spk11: Hi, thanks for taking my questions, and congratulations to everyone on their new appointments. I don't know if I missed this, but did you say what percentage of your sales were in the ASC setting this quarter? And maybe how you envision that playing out along the term, and then just any sort of impact on gross margin we should think around if that number is, or if that delta is quite big between now and peak. Thank you.
spk07: Yeah, good question, Brandon. And in terms of sales and ASCs, they continue to increase. And we're getting up close to 20% of our sales now being in the ASC environment. And as you may recall, just before the pandemic, that number was around 10%. So it's a pretty significant increase in a fairly short period of time. The way that I've been looking at ASCs is simplistically around 50% of our surgeons are employed by hospitals, and so I was assuming that that business would remain at hospitals. The other 50% tend to be surgeons who are in private practice. And then I was simplistically just saying let's assume we can get half of those working in ASCs so the total ASC opportunity would come out at around 25% of our sales. What I'm hearing is that the opportunity may actually be even larger than that. So from the perspective that hospitals are pushing more into the ASC business as well and surgeons who are in private practice really seeing the benefits of ASCs. You know, at the end of the day, we're agnostic as to where the sales actually go. We have a great solution for hospital inpatient, hospital outpatient, as well as ASCs. And so we want to make sure that we're just meeting the needs of our surgeons and their patients. In terms of the gross margin, it does have a little bit of an impact on the gross margin just because the ASP in the ASCs tend to be a little bit lower. And once again, that 85% to 89% number that we've provided is taking into consideration the impact of that as well as some of the new products that we've put out.
spk11: Great. Thank you very much.
spk05: Thanks, Brandon. Our next question coming from the lineup. David Saxon would need him. He let us open.
spk03: Oh, good afternoon. And thanks for taking the questions. I guess first one. Yeah. Hi, Laura. And congrats on the new role.
spk04: Thank you.
spk03: First one is just on torque. I was wondering if you have any clinical data or if you're planning on something similar to what you've done with bedrock and Sylvia. And then kind of related to that, can you just give an update on, on Sylvia, you know, enrollment and, and when we could expect to see some data from that?
spk07: Yes. Yeah, good question. So thus far, we have not collected clinical data on eye-fused torque implants, but we have performed biomechanical and animal testing, and it shows a lot of different benefits to the product. So from a fixation perspective... you know, 1.6 times stronger than trauma screws, around two times greater insertional torque versus SI joint fusion competitors. And that's fixation from a compression perspective. Just a stronger compression compared to trauma screws based on the testing that we've done. And then on the fusion side, There's approximately three times more surface area for bone-in growth versus our competitors and trauma screws. Just designed to allow for more osteointegration versus our competitors and trauma screws. It's a 3D-printed cancellous bone-like surface that facilitates osteointegration and then also has a fenestration structure that allows for bone... through growth. Uh, and we're seeing that through a sheep study. So, so a lot of work that's been done more on the biomechanical and, uh, animal testing, uh, to help support the product.
spk03: Okay. And, um, sorry, could you just give an update on, on Sylvia as well? And then I have one more follow up.
spk07: Great. So if Sylvia continues to go well, so, um, Obviously, this is for our bedrock product and showing the benefits of our product in a RCT. And so we continue to see enrollment in Sylvia and expect for that to continue to enroll throughout the year and hope to have results out shortly thereafter.
spk03: Okay, that's helpful. And then just with, you know, the continued hiring, I think you'll have about 15 hires planned for the balance of the year. And all these investments that you're making, you know, direct-to-patient marketing programs, et cetera, how should we think about OpEx, just the cadence through the balance of the year? And thanks so much for taking the questions.
spk07: Thank you. So you get a picture of what we've been trying to do. So from a sales hiring perspective, we did grow from, I believe it was 64 TM's to 75 just in the first quarter alone. So pretty rapid growth there. We plan to continue on getting to 90 TM's by the end of the year and 60 clinical support specialists. We're making significant investments in sales hiring, but also in surgeon training. We've been talking quite a bit about torque, and we will be making additional investments in new products. You also mentioned clinical trials, and Sylvia, that's an important area. And then there's also the digital and direct-to-patient marketing From a digital and direct-to-patient marketing perspective, as I mentioned earlier on the call, we are putting our toe in the water is the way I would describe it. We are doing testing in various markets, and we want to make sure that we very clearly understand the ROI on those investments prior to really pushing in a significant way in that area. So I would say that the sales hiring, surgeon training, new products, clinical trials, we are pushing very hard on. And on the digital and direct-to-patient, we are just continuing to evaluate that, is the way I would put it. So you're going to continue to see growth in our operating expenses throughout the year, and those investments are intended to accelerate our growth more into 2022 and beyond, given that a lot of these investments that I just mentioned, it takes around 12 months for them to have a significant impact. But we expect expense growth is going to outpace revenue growth in 2021 and that it will lead to a larger loss this year compared to last year.
spk03: Okay. Very helpful. Thank you.
spk05: Thanks, David. And as a reminder, ladies and gentlemen, to ask a question, you will need to press the start and the one key. Our next question coming from the line of Kyle Rose with Canaccord. Your line is open.
spk02: Great. Thank you for taking the question, and I apologize. I've been jumping between calls. I just had a few housekeeping questions on our end. One, I guess, could you just help us, you know, break out, you know, how many docs were specifically trained in the quarter? I think you gave the simulator numbers. I didn't know if there was anything incremental there, just given the focus on torque. But then also what the overall, you know, account base was in the quarter. And then lastly, I'll just ask them all up front, was, you know, how we should think about the pricing of torque relative to traditional IFUs and bedrock. You know, I know that you've kind of talked about, you know, year-over-year, your price declines just given more bedrock usage, but help us understand how that dynamic changes with torque as well.
spk07: Great. Hi, Kyle. Thanks for the questions, and you're very efficient. In terms of training, we do not typically provide training numbers, and so instead, what our target is is to train as many surgeons as possible, but what we would like to to speak about is the number of active surgeons. So in the first quarter, we finished with 583 active surgeons. So very similar to where we were at at the end of Q4. And just as a reminder, it is how many surgeons performed at least one case during the quarter. So, you know, we do think that that number was muted by the impact of COVID. Overall, we're continuing to train surgeons and we believe that an increase in the number of active surgeons is going to drive the growth in 2021 in addition to an increase in additional procedures per surgeon. In terms of the pricing of torque, it's actually very similar to the price of iFuse 3D. In those cases where torque is being used for primary SI joint fusion, there are typically three torque implants that are being used, and the pricing is in that approximately $9,000 range. In the case of trauma, there are typically two torque implants that are being used, and so on average, you're talking a little over $6,000, very similar to our bedrock applications.
spk02: Great. Thank you very much for taking the questions.
spk07: Thank you.
spk05: I'm sure enough for the questions at this time. I would like to turn the call back over to Laura Francis for any closing remarks.
spk07: I just want to say thank you to all of you for your time today. Anshul and I are looking forward to meeting with many of you this month. We'll be at the Bank of America and the Truist Investor Conferences and We also have a number of individual meetings, so we look forward to meeting you in each of those different places. Have a great evening.
spk05: Ladies and gentlemen, that's the conference for today. Thank you for your participation. You may now disconnect.
Disclaimer