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spk05: Good day and welcome to the Cientra, Inc. first quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Oliver Bennett. Please go ahead.
spk08: Thanks, Operator. Good afternoon and welcome to the Cientra First Quarter 2022 Earnings Conference Call. I would like to remind everyone that in our remarks today, we will include statements that are considered forward-looking statements within the meaning of United States security laws. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current assumptions and expectations of future events and trends. which may affect the company's business, strategy, operations, or financial performance. Actual results may differ materially from those expressed in or implied by the forward-looking statements. The company undertakes no obligation to update or review any estimate, projection, or forward-looking statement. A detailed discussion of the risks and uncertainties that the company faces is contained in its previously filed annual report on Form 10-K, and its quarterly report on Form 10-Q for the first quarter that ended March 31, 2022, to be filed with the SEC and available on the company's website and at sec.gov. I would also like to note that Cientri uses its investor relations website to publish important information about the company, including information that may be deemed material to investors. Financial and other information about Cientra is routinely posted and is accessible on the company's investor relations website at www.cientra.com. Today, on our call, we have Ron Menendez, Cientra's President and Chief Executive Officer, and Andy Schmidt, Cientra's Chief Financial Officer. I will now turn the call over to Ron. Ron.
spk09: Thanks, Oliver, and hello, everyone. Our seventh consecutive quarter of growth was fueled by a record high reconstruction performance. This result was a validation of our strategy to focus on the recon market. This quarter has set the foundation for 22 with the reemergence of this highly valuable market, which will support our long-term growth. We're now seeing hospitals go back to pre-pandemic volumes. We'll continue to add accounts and grow market share in this important segment. We had record Q1 revenue. of 21.4 million, a 17% increase over the same quarter last year. We're also thrilled with the over 50% year-over-year increase in the reconstruction channel. In the augmentation or cosmetic market, we hit an all-time high market share of 13%. The company also had 60% gross margins as a result of increased recon sales and improved operational efficiencies. As we look into the rest of 22 and beyond, we're focusing on three key areas. First, accelerate market share growth within reconstruction and augmentation. Second, continue to invest in commercial and R&D to support current and future growth. And lastly, to transform Sientra into an innovative aesthetics company offering an enhanced portfolio for plastic surgeons. Our existing accounts continue to perform extremely well and drove more than 90% of our revenue in Q1 22. New accounts also served as a leading indicator to a long-term growth profile, and we added over 200 new accounts in the first quarter of 22. As a reminder, our teacher expanders are now in every major GPO in the country. And when we bring a new Recon account, it typically takes four to six months before it receives significant sales volumes. We expect those new accounts to be accretive to Cientra's top-line growth this year and beyond. This continuous growth in accounts reinforces the fact that surgeons are switching to Cientra, driven by our value proposition, the safety profile of our products, which is backed by our 10-year clinical data, which is the best-in-class warranty, and being the partner of choice for plastic surgeons. The benefits of our portfolio have led to the acceleration on both recon and augmentation share gains, which offers unique and innovative technologies in tissue expanders and breast implants. Now turning to the augmentation market. The pandemic caused quite a boom in the plastic surgery market, and now we're seeing the augmentation market return to normal seasonality. Last year, we purposely set ourselves and our surgeons up by resetting our commercial strategy, and it's working. We'll continue to grow our volume, and our share of the market hit an all-time high of 13%, this quarter compared to the same quarter last year, where we are about 8.5%. We also doubled our consumer brand awareness over the past two years, growing at the highest rate in the category and putting us in the number two position amongst all brands. We're strategically investing to educate consumers about our safety profile, which is driving brand requests to plastic surgeons for C-entry implants. Additionally, we're providing more value to our surgeon partners, by training them not only about our product advantages and techniques, but on practice management and growing their business in the highest revenue producing segment in plastic surgery, brass augmentation. We're also seeing growing interest in fat grafting in the plastic surgery market, which validates our decision to acquire the novel fat grafting technology abandoned last year. Just a couple of weeks ago, At the Aesthetics Meeting San Diego, the growing use of fat grafting in plastic surgery was a topic highly discussed and highlighted in many of the sessions. The benefits of fat grafting in both aesthetic and recon breast surgery has also been a topic of recent publications. We're confident our fat grafting technology will offer patients and surgeons unique benefits to obtain safe, natural, predictable, and reliable outcomes. We're very excited about this year. as we build the foundation for the upcoming years. With that, I'll turn the call over to Andy.
spk02: Thanks, Ron. Considering our Q1 2022 financial results, we recorded record Q1 plastic surgery results, which brings our running total to seven consecutive quarters of record revenue performance. Tantra posted revenues of $21.4 million as compared to $18.3 and Q1 2021 an increase of 17%. Gross margin for Q122 was 60%, which is a very strong performance as compared to 55.4% for the same period last year and 54.9% for the total year 2021. The key driver for gross margins is product and channel mix. Our Q122 results saw strong performance from a reconstruction space which we expect to continue to perform strongly in 2022 as supported by hospital wins in 2021 and new hospital wins in 2022. Consistent through 2021 and into 2022, we experienced price stability across our entire product line and improved product cost performance. We have moved past our transition expenses in Q122 related to our distribution center move and expect to see the results of the improved cost dynamics throughout the year. Switching to operating expense. Total GAAP operating expense for Q1-22 was $28.9 million, which compares to $21.9 million in Q1-21. That said, the op expense compares to the Q4-21 period of $26.1 million, the increase being related to both non-recurring G&A items and as expected, increased expenses associated with an increased sales force to optimize 2022 customer acquisition opportunities. Total gap loss from continuing operations for Q1 22 was 18 million as compared to a $56.6 million loss for the previous year period. Q1 of 21 included a non-cash charge of 42.7 million associated with the change in value of our previously defined derivative instrument. During 2021, we corrected for the derivative instrument accounting. Considering the Q121 results without the derivative accounting, a comparative is a loss from continuing operations in Q122 of $18 million as compared to $13.9 million, attributed primarily to the investment in sales and marketing in the 2022 period. Adjusted EBITDA for Q1-22 was a $11.8 million loss as compared to a $7.3 million loss for Q1-21. Again, attributed to both our investment in our sales initiatives and non-recurring G&A charges in the current period. Switching to key balance sheet items. We ended the March 31, 2022 period with a cash balance of $38.9 million. This compares to a balance of $51.8 million on December 31, 2021. Year-to-date cash used in operations was $17.9 million. However, $6.5 million of that amount was attributed to an increase in accounts receivable due to increasing sales in our transition and ERP systems in Q3 of 21, which caused the delay in delivery of customer statements. We expect to recapture much of that increase in accounts receivable in 2022. We also increased inventories by approximately 1.3 million to support significant recon hospital wins, which require consignment inventory. This is an as expected increase and compares favorably to the 13.8 million increase in inventory in 2021 to address increasing sales, and support our business recovery from the 2020 COVID shutdowns. Total debt on March 31, 2022 was approximately $84 million and total outstanding shares were approximately $62 million at period end. Turning to guidance for 2022, reiterating our past communication, we expect plastic surgery revenue in the range of $93 to $97 million reflecting growth of 15 to 20% compared to sales of 80.7 million in 2021. In regard to operating expense guidance, we are guiding 2022 GAAP operating expense to be 105 million to 109 million, representing an increase of 15 to 20% compared to GAAP operating expense of 90.7 million in 2021. Non-GAAP 2022 operating expense is expected to be $90 million to $94 million, representing an increase of 18% to 23% compared to non-GAAP operating expense of $76.3 million in 2021. At this point, I will turn the call back to Ron.
spk09: Thanks, Andy. With strong momentum behind us, we have many exciting catalysts on the horizon. We expect to continue to expand our market share and number of accounts in both the recon and augmentation. We'll also focus on driving towards profitability in 2023, but further growing our top line by investing in areas that will drive future growth. We'll plan to fuel our future by transforming Sientra into a full aesthetics company, leveraging the full potential of our existing portfolio and the new fat grafting platform. Looking ahead, I'm very confident that we'll be on track to double our revenue within the next three years. And with that, I'll open up for Q&A.
spk05: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw from the question queue, please press star then two. The first question is from Margaret Cazor of William Blair. Please go ahead.
spk06: Hey, good afternoon, guys. Thanks for taking the question. Maybe I just wanted to start out a bit with, you know, what's included in your guidance, if you can give us a sense of Recon versus Aug, and whether that's shifted at all, given the momentum that you are seeing in the Recon business, or even kind of underlying market trends in Aug.
spk09: Hi, Margaret. Welcome back.
spk06: Thank you. Fun to be back.
spk09: Margaret. Our model was a 55-45. That's what we planned for the year. This quarter, it came in closer to almost a 50-50 between the two of them, but we did model 55 AUG and 45 recon for the rest of the year.
spk02: Sure. Just adding to what Ron said, we're taking a look at 2022 to understand the return to seasonality. and we saw that in their q1 in terms of aug and q2s we're launching true we're seeing strong performance from both sectors so it'll be a bit of a wrestling match between the two but recon is very strong you see it in their gross margins it's very exciting to see that space take off but aug we expect to perform equally as well okay yeah and so if i kind of you know keep going down that that track right so
spk06: Can you give us a good sense of underlying market growth within reconstruction and then similar, you know, within AUG to the best of your abilities? I know it's tough in the marketplace. And then just kind of the pace of market share gains as we go throughout this year, you know, 500 basis points is spectacular. But can you keep going at that level and what might kind of stop you or maybe even have you accelerate from there?
spk09: So recon, Margaret, recon, we don't have the data. Acuvia is going to release that data next week. And I'll have that in one of the upcoming investor meetings. We'll have a shared data, which I'm very, very optimistic will share at that time. And that includes always the market for first quarter. For augmentation, as I've been saying the last six months, we did expect and we saw seasonality first quarter back to 2019 levels. And as you notice, we don't really rely on the market growth to advance our performance. We saw our share growth dramatically increase to 13% from 11 at the end of the year. So, yeah, it's nice to have a market behind us. We're not waiting for the market. But you've seen our market share the last two years double. So that's where we're focusing on what we can do from our side.
spk05: Okay, great.
spk06: Thank you, guys.
spk05: The next question is from Alex Nowak of Craig Hallam. Please go ahead.
spk03: Good afternoon, guys. This is Chase on for Alex. Thanks for the question. I guess starting, you know, you said you saw the seasonality kind of return to 2019 levels. Going forward with likely decreased discretionary budgets, you know, maybe a recession on the horizon, how do you see demand holding up for you? And I guess what have you seen historically that kind of guides this opinion?
spk09: Yeah, Jace, looking at, let's look at AUG first and it will separate AUG and reconstruction. AUG, like I said, it's back to seasonality, which means Q1 and Q3 are the lowest quarters. Q2 and Q4 are always the highest quarters. So we expect Q2 to come back and back to a strong quarter as individuals get ready for the summer. And then we expect Q3 to go back down. Doctors are very, very busy still. I was in San Diego just two weeks ago at the American Aesthetics Conference, and they're telling me there are two or three months booked ahead. So I don't know if they're planning a recession yet, but they are being very busy. Reconstruction, as we stated on their opening remarks, if the market is back, hospitals are busy, individuals have delayed their reconstruction, are going in and getting taken care of, and they're very, very booked as well in that regard for reconstruction. So I see a very strong recon market throughout this year, and I see AUG right back to seasonality.
spk03: That's helpful, thanks. And I guess just concerning your sales force, what was the sales team reception to being more recon focused? Any concern amongst the AUG reps, and what was the excitement level coming away from the sales meeting at the conference?
spk09: Chase, this is a strategy that we implemented in beginner 2021. to really pivot this company and focus on reconstruction. So we've been doing that since the beginning of last year, adding new accounts, training our representatives. And the great thing is as we add new reps, and we did add 11 new representatives at the beginning of 2022, all of them have reconstruction background. Some of them, actually the majority of them, have come from med device companies with extensive OR experience. So it is part of their job. The individual that calls in the hospital also calls in the office for the augmentation side. We did expand as well our reconstruction managers. We have seven. Before we had four reconstruction managers. So we're very excited about the support we have right now. And our marketing team as well added more resources and more programs to drive that educational component to our hospital surgeons. Last year, At the Cientra Summit, it's a program that we do to help our surgeons that are focused on reconstruction learn more, learn from each other. We had about 35 surgeons. We expect over 100 surgeons to attend this program this year. And it's a weekend program. They take time for their own time to attend this program. So reconstruction is part of us. Reconstruction is what Cientra stands for. We are very focused on augmentation as well. We're very excited about performance, not just in this quarter augmentation, but for the past six quarters. and augmentation.
spk03: That's good to hear. Thanks. And then just lastly from me, Andy, can you speak to pass the shore up the balance sheet at all? You laid out a path to profitability, but will you need to raise additional capital to bridge you there? I guess, what are you thinking about from the balance sheet perspective?
spk02: sure so um you know when we look at the past our legacy debt facilities and capital strategies they've been effective over the last several years but keep in mind they were put in place in 2018. so they're designed basically to take the company from 2018 to essentially 2023 to 2025. when we look at those current strategies we have ample capital for the year 2022 But we're looking at different ways, different strategies to increase access to capital to provide a view of 2025 to 2027. It's basically time for a refresh of what was in place in 2018, and we have a lot of options. So we're working through that in real time right now, and we will report back, obviously, to you all and to the field once we come to a landing spot.
spk03: Got it. Thanks for the questions, guys.
spk05: The next question is from John Block of Stifel. Please go ahead.
spk00: Thanks, guys. Good afternoon. Hope all's well. Andy, maybe just a couple on the P&L to begin with. The 60% GM was really solid and a nice step function above where you had been. I know you say a lot of it's mixed, but maybe just talk to us. I mean, do you think we're now working off this level? You sound like you, for a lot of reasons, expect recon to remain strong. That's the higher gross margin component. So, you know, do we think about a six handle for GMs throughout 2022? And then on the non-GAAP op-ex, I think I got the numbers right. I think you're calling for 90 to 94 mil in the PR and the press release, but you did 25, just over 25 in one queue, and you're still being quite active there. on the R&D front. So, you know, how do we step down off that run rate in terms of where we were in 1Q? And then I just got a quick follow-up.
spk02: Sure. So let's start with growth, gross margins. 60% is part product mix. But a big part of this is the work we've done in our distribution center. As we said, you know, during the launch of that big move in third quarter of 2021, that we had work to do to find the efficiencies that we're looking for. A past communication was we needed Q1 and Q2 of 2022 to complete that work. We're ahead of schedule. We completed that work here in early 2022. We're seeing the results in Q1. Those results will stay with us and build going forward. So that 60%, that current product mix is solid. It can go up from there based on, again, recon performance and additional efficiencies. It won't drop much from there if we have an extremely heavy AUG quarter. So that additional pickup of four to five points is with us going forward. So again, that was completing the work that we started in 2021. When we look at 2022 in terms of op expense, we have a similar dynamic. We still have work to complete in terms of our ERP change and other really significant investments we made in infrastructure in 2021. You're seeing some of that effect in Q1 2022 op expense. Approximately $2.5 million of what you saw in op expense in Q1 is non-recurring. When they look at guidance, specifically, as you said, if you annualize our Q1, it doesn't fit our guidance. There's a reason for that. We expect Q2 to also have some non-recurring costs. But of the $14 to $18 million in non-GAAP increase in op expense, approximately $8.5 to $9 million of that amount is non-recurring. That's where we start looking at the second half of 2022 in terms of basically... Measuring out our op expense are basically making that look much more reasonable. And that's basically going to be the foundation for 2023 when we talk in terms of very little increase in op expense in 2023. And our long-term modeling has much to do with our early 2022, taking care of some business, taking care of some of the restructuring work that we did in 2021. That will be behind us and we'll see it normalized. That's the right word. And by the way, we now include a non-GAAP to GAAP operating expense reconciliation in our press releases. We'll do so every quarter so the street can understand how we basically get to non-GAAP operating expense.
spk00: Got it. Very, very helpful. And then, you know, Ron, for you, maybe just more higher level or strategic. I mean, I guess a nitpicky one, is there anything to talk about in terms of Alex 2 Pro and any dialogue with the FDA. But to zoom out, you know, you've clearly got a lot of traction in recon. I think there's been a lot of airtime given to a future competitor. But if and when they get there, it would be specific to all. So just give us your thoughts on, you know, your recon portfolio versus others. It should get stronger with pro. And do you think anyone's really there even chasing you in that part of the market? Thanks, guys.
spk09: Thanks, John. We are focused on becoming the leader in reconstruction. And you mentioned one of the products, PRO. We're in discussions with the FDA, and we submitted that after type 10K in December. So we expect that to continue to move forward as we talk about the project. And then the other part, too, is our fat grafting technology, where the majority of surgeons use some kind of fat grafting reconstruction. So we're going to have our representative walking in with the only dual-port tissue expander in the marketplace that reduces re-operation, reduces seroma, reduces infections, and really makes it a critical advantage for us. Then we have breast implants that has advantages we discussed in the past, and obviously you have fat grafting. So this is all going to be happening within the next 12 months as we launch fat grafting. So we have this product that we discussed. And the pipeline is strong. We're looking at different opportunities as well, focused on reconstruction. I'll be also very clear, augmentation is a critical segment for us. It's done very, very well for us in the past. We've gained market share quite a bit this past three months. We see augmentation as well as a path for sustaining this company. But the critical part is because we have such an advantage into reconstruction with the clinical data that we have, And I'll share an example. We won this well-known military base contract. We're so proud of that. And usually, as you heard in the past, it takes four to six months to get a contract to really start seeing revenues. It just takes a while. But because the surgeons in that base were so impressed by our clinical data, by LX2, they actually quickly started using LX2, quickly started using our breast implants. They felt that for the patient, it made more sense to quickly go to Alex 2 versus worry about using the inventory from the previous manufacturer. So that's the kind of data that makes it sustainable, a long-term growth and long-term focus on being the number one company in the reconstruction area.
spk02: Perfect. Thanks, Rob.
spk05: The next question is from Chris Cooley of Stevens. Please go ahead.
spk04: Good afternoon, and thanks for taking the questions. Just two for me, if I may. Maybe one, I know we just had the aesthetic meeting, but just when we think about the pipeline, as John alluded to, just kind of curious if you could give us some color there about the contribution in the quarter from the new six-tab version of DermaSpan and more broadly expanders as a whole. And similarly, if in Canada we're still expecting – approval here in the second quarter as well. Just wanted to touch base on those two fronts and then have a quick follow-up. Hey, Chris.
spk09: We just launched the DermalSpan 6 tab, and we saw very high demand in the last week in March. We basically did a really nice job selling most of them out, and they obviously are taking care of the needs and demand in this quarter as well. We also continue to see increased demand and interest for AlloX2. We have several well-known networks, hospital networks in the U.S. that are continuing to talk to us about the clinical data and finding ways to add AlloX2 and Dermospan 6-Tab. So those are the kind of things that we see immediate impact that will continue to pay for the future as well. And then obviously all the work efforts that we did last year, we're seeing now in the first quarter, the results of those accounts that we won in third or fourth quarter of 2021. So we're excited about where we're going from a reconstruction standpoint.
spk04: Appreciate that additional color. And I just wanted to circle back as well, just as we kind of try and dial in the model going forward here a little bit tighter, you know, post the fourth quarter. Any update that you can provide just as it pertains to the non-surgical side of the portfolio and specifically just thinking about scar management? And I'll hop back into you. Thanks.
spk09: Yeah, I'm sure you're talking about biocorne. Biocorne did extremely well last year. We expect similar performance this year, Chris. I don't know if we broke that down.
spk02: What we provided was, you know, it started out in the mid-seven figures as basically a cash cow, and we see it as an eight-figure contributor going forward.
spk04: Thank you.
spk05: The next question is from Kyle Bowser of Lake Street Capital Markets. Please go ahead.
spk01: Great. Thanks for taking the question and for all the updates. So maybe I'll switch to fat grafting. So from our checks, it sounds like physicians and perhaps even consumers are quite price elastic in the fat grafting space. So to drive adoption is pretty key, at least according to a couple KOLs, that you can show better efficacy of fat retention. So it's great that you're running the clinical trial. You're kind of all over this. I'm just wondering, could you talk a little bit again about what the industry averages for fat retention from fat grafting with traditional methods, and what do you think would be a reasonable threshold to achieve to drive meaningful adoption? I mean, does it just need to be statistically significant, or is there a clinically significant threshold that might make more sense? Just kind of curious how you're thinking about that.
spk09: Kyle, in most products in the marketplace, including the two are marketed by two companies, and the homemade products by surgeons, about 40% to 50%. After 12 months, they will see, you know, it's about 40% to 50% retention. That's been pretty much the threshold that they go by. The data on the system, the fat grafting system we acquired from Mass General, is that 71% after 12 months. Now that's where we're trying to duplicate that in extensive studies, a little higher, you know, to see that, to make sure that is the case. We do very confident because they had beautiful data, which was approved by the FDA at 71%. So we're going to be doing the studies in more patients to see that fat retention. And that's going to be kind of the game changer. You're going to be able to apply and use fat grafting for reconstruction. that a patient can last majority of them over 12 months. You can also see that as well in different parts of the body, you know, part of the body transformation in buttocks and other parts of the body and potentially down the road as a filler as well. Most synthetic fillers out there, they usually are good for 12 to 15 months. Now we have fat grafting, which is in patients on tissue. that could be 70% for about 12 months. So you're really going to see very consistent fat grafting, very predictable fat grafting, and that's very different to what's in the marketplace right now.
spk01: I appreciate that, yeah. And then I follow up. Can you remind me what some of the top reps in the implant business are generating in sales per year and roughly how long it takes to ramp a new rep on average? I know it kind of varies. Thank you.
spk09: Yeah. So last year, we were very proud to have got close to $1.6 million per rep. A year and a half ago, it was $1.2 million per rep. We think that $2 million per rep is what we'd like to be eventually. And we have reps that have $3-plus million territories. We usually have to divide it because it becomes very difficult for that one representative cover. So you heard me stating we added 11 new individuals. Some of them are going to areas you'll think it makes sense to add new representatives, South Florida, parts of California, et cetera. So we feel that $2 million per rep is a good target for representatives. And as you go way above that, it makes it very difficult to manage. And your second question about how long does it take, in the past, Kyle, you would probably say six, eight months as somebody walks in, starts to meet the customers, establish a relationship with customers, start learning about hospitals. But because we're hiring mostly, if not all, individuals that have extensive OR experience, they're coming in and making an impact right away. Within the two to three months, we've seen people make an impact in the territory. We're teaching them the cosmetic side, but they're already coming in well-known with the connection to hospitals. We're bringing those individuals from well-known big med device companies And they like the flexibility. They're excited about the opportunity to come on board to Centra. And they like joining a company that's fast, nimble, and makes quick decisions. So they're really excited about joining us. And they're seeing an impact within the next two to three months after they join the company.
spk01: Oh, that's great. Appreciate that. Well, thanks for all the updates. I'll jump back in queue.
spk05: The next question is from Anthony Vendetti of Maxim Group. Please go ahead.
spk10: Thanks. Appreciate it. Thanks, Ron. Thanks, Sandy. Just a follow-up on that, and then I just have two quick questions. So the goal of $2 million per rep, you increased the average rep to $1.6 million, and that was up 33% from 18 months ago. The goal of $2 million per rep, is that 18 months from now? Is that two years from now? When do you think the average rep could do $2 million a month? per year.
spk09: Yeah, I can hear you making some math calculations there, Anthony, in the background. We're kind of targeting about 1.8 plus this year. Obviously, you know, we're now at 56 reps. So you target at about 1.8. And then eventually to get to that, you know, you heard me saying we're going to double our revenue in the next three years. So that means sometime Not in 2023, but sometime after that, we'll probably have to assess the deployment of our sales force. We're very confident on our current structure from both sales and marketing for the next 18, 24 months. When we added those representatives, we're already thinking of fair grafting launch beginning next year. But keep in mind, it's going to be the same rep that's already in that hospital and that also the office for the cosmetic doctor. And we'll be talking about fair grafting in addition to the products we'll have.
spk10: Okay, that's helpful. And then you added 200 new accounts this quarter. Is that the approximate run rate we should look at per quarter for the rest of 22, give or take a little bit?
spk09: Give or take a little bit. Remember, one of the things I announced the last quarter is that we're focused on expanding our market share on the current accounts. We don't want people to be so focused on the new accounts that they forget accounts. 90% of our revenue was driven by existing accounts And adding the accounts is important. And by the way, Anthony, 80% of those accounts were added or hospital accounts. There are reconstruction accounts in this quarter. We have a different target. I'm not going to show what the target is per quarter, but every rep, all of us have a certain number target we're supposed to add per quarter. But I can say that 200 accounts is a really good number.
spk10: Okay. And then just last question on origin. How is the – where are you at on that – 200-patient, 10-clinical site study. Any update on that?
spk09: Yeah, all the sites have been identified. We actually have about 15 patients already in the process of being enrolled. So we're ready to start the process. We're very, very confident in our ability to finish the study in time for the launch. Remember, the product is approved, has all the indications, a very broad indication by the FDA that We would like to have more ways to talk about the product based on the clinical data. So, again, Mass General did a wonderful job with clinical data. We just want to have more data to be able to share when they launch the product beginning of next year.
spk10: Okay, great. Thank you so much. I'll hop in the queue.
spk05: Again, if you have a question, please press star, then 1. The next question is from Kyle Rose of Canaccord. Please go ahead.
spk07: Great, good afternoon, and thank you for taking the questions. This is Gibran on for Kyle. So maybe to follow up on that point, Ron, with over 300 accounts now added in the last two quarters, both coming in at around 80% recon, where does your total account base stand now, and what's the rough split there between recon and AUG today?
spk09: Yeah, Kyle, we're close to 3,000 accounts, okay, right now. So we're pretty excited about that. And I would say it's still about –
spk07: after that it's 60 plus percent on the rest are recon but trust me quite a bit yeah yep and then maybe just to follow up or check in in terms of ous expansion to china japan middle east uh you know are those distribution agreements in place how are approvals tracking there are are you still targeting china the next two plus years just maybe a refresher on other ous initiatives yeah
spk09: So let me start first in Canada because there was a question about Canada. I didn't answer that. We're very excited because we had our first patient in Canada. We have a lot of Canadian surgeons that are very excited about using our implant. We have several surgeons already bought our implants. So Canada is going extremely well. We're very excited about the future there. Middle East, we're still in negotiations there. In China, we are engaged and talked with the Chinese regulatory agency. I don't think we've changed the timeline for some time in the next few years. We're really on track for approval. We have a distributor right now in China, and we're discussing with the Chinese FDA. So everything is progressing extremely well in China, and we'll probably think 24-ish it will be launched there in China.
spk07: Great. Thanks again for taking the questions.
spk05: There are no other questions at this time. This concludes our question and answer session and today's conference. Thank you for attending today's presentation. You may now disconnect.
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