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spk00: Good afternoon, ladies and gentlemen, and welcome to the Telebio third quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to Greg Hudacek from the Gil Martin Group. Please go ahead.
spk02: Thank you, Felicia, and good afternoon, everyone. Earlier today, Telebio released financial results for the third quarter of 2022. A copy of the press release is available on the company's website. Joining me on today's call are Tony Koblish, President and Chief Executive Officer, and Roberto Cuca, Chief Operating Officer and Chief Financial Officer. Before we begin, I'd like to remind you that during this conference call, the company may make projections and forward-looking statements regarding future events. We encourage you to review the company's past and future filings with the SEC, including, without limitation, the company's 2021 Form 10Q, excuse me, 10K and Form 10Qs, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, statements regarding product development and pipeline opportunities, Product potential, the impact of COVID-19, the regulatory environment, sales and marketing strategies, capital resources, or operating performance. With that, I will turn the call over to Tony.
spk04: Thank you, Greg. Good afternoon, everyone, and thanks for joining us today for our third quarter 2022 earnings call. I'm pleased to report that Telebio had another strong quarterly performance. Third quarter revenue was $11.2 million, a 46% increase from the same period in 2021. While we are pleased to see further revenue growth, I continue to believe we haven't seen the full potential of our products as hospitals are still contending with staffing shortages, reduced operating hours resulting in postponed surgeries, and healthcare professionals taking longer than usual vacations during the summer after having put them off last year due to COVID. The good news is the magnitude of these headwinds continues to lessen, which we believe will result in increased procedural volumes and further revenue growth. In particular, the backlog of surgeries we've described on past calls remains high, showing substantial future market opportunity. And notwithstanding headwinds affecting the entire industry, we continue to see Ovatex gain market share each quarter. Our success has been driven by our continued focus on the five factors driving our revenue and revenue growth. These are group purchasing organization access, compelling clinical data, Salesforce size, sales rep productivity, and product portfolio expansion from internal R&D and business development. By improving on even one of these factors, we can grow revenues. By enhancing multiple factors, We can achieve the sort of revenue growth we're reporting today, and by fostering all of them going forward, we can tap into even higher growth potential. Let's take them one by one. Our GPO access efforts are progressing very much on track. As you know, we already have an agreement in place with Health Trust, and that organization's members routinely account for approximately a third of our revenues. October 1st was the day that our recently signed contract with Premier became effective. Premier is the second largest group purchasing organization in the nation, representing over 225,000 providers and 4,400 hospitals. We are pleased to see that Premier has gotten off to a good start with sales to the organization's members already accounting for a noticeable portion of our revenues in October. GPO access is critical to our success as it allows physicians to use our products off the hospital supply room shelf rather than having to go through the utilization committee process. To accelerate uptake in premier hospitals, we've established a compensation incentive premium for our sales force when selling products to this GPO's members for the first six months of the contract. We believe this will increase the adoption rate and align the sales reps with our long-term goal of significant penetration in premier facilities. We are also continuing to pursue contracts with a range of additional GPOs to increase our footprint to cover all significant purchasers in the U.S. We have also been advancing another factor contributing to revenues and their growth, clinical data. We have been pleased with the high-quality outcomes data from recent studies, and we believe these compelling results will enable us to continue capturing market share. In September, two Ovitex studies were presented at the American Hernia Society meeting, demonstrating a low recurrence rate in both ventral and inguinal hernia repair. The 24-month BRAVO study measured the clinical performance of Ovitex for primary and recurrent ventral hernias in an open and minimally invasive procedure study. patients experienced an impressively low recurrence rate of 2.6% compared to the double-digit recurrence rates of competitive products. As seen in the recent publication of our 24-month BRAVO data in the Annals of Medicine and Surgery, we are committed to compiling additional data supporting our products and are progressing with recruitment of BRAVO II, which will have focus on robotic hernia repair. Today, 40% of Ovitex procedures are conducted with the use of a surgical robot in a minimally invasive setting. The use of a surgical robot system in general surgery continues to grow, and we believe Ovitex is well-positioned to take advantage of this trend. Moving on to our sales force, as we noted in our last quarterly call, we reached 57 reps at the end of June, and we are on track to finish 2022 with at least 60 sales reps. We are in the midst of our 2023 budget process and expect to deploy some of the proceeds of our August equity raise to further growing our sales force. We will have more details on what that looks like during our fourth quarter call. Rep productivity is also an essential component of future expansion. The latest metrics from our Playbook 90 program continue to indicate that our newest reps are reaching break-even within three to six months' time. We've had great success with this training process. We are currently preparing additional selling materials based on our 24-month Ovitex clinical data. We anticipate this will make the case for Ovitex even more persuasive in our REST communication with surgeons. And finally, the fifth aspect of our strategy to create stakeholder value is growing our product portfolio. We continue to evaluate product expansion through strategic collaborations, partnerships, or acquisitions, and we are also advancing product development internally on our own and in collaboration with our contract manufacturer. We want to leverage our accomplished sales force by providing them with additional standout products with the same call point as Ovatex and continue to build out our soft tissue preservation and restoration portfolio. We expect to begin rolling out additional products in 2023 and we'll have more to say on that at a later date. With that, I'll turn the call over to Roberto for more details on our third quarter financial results.
spk03: Thanks, Tony. Revenue for the third quarter of 2022 increased 46% year-over-year to $11.2 million, growing 7% sequentially from the second quarter. OVITEC's revenue grew 29% year-on-year, and PRS more than doubled, growing 108% year-over-year. Gross profit percentage was 66% in the third quarter of 2022 compared to 60% in the same period last year. The increase was primarily due to a lower provision for excess and obsolete inventory. Sales and marketing expense was $11.2 million in the third quarter of 2022 compared to 6.9 million in the same period in 2021. This increase was mainly due to higher salaries, benefits, and commission costs as a result of the expansion of our commercialization activities higher travel and consulting expenses, and additional employee-related costs due to increased headcount, particularly in our customer-facing roles. G&A expense was $3.5 million in both the third quarters of 2022 and 2021. R&D expense was $2.1 million in the third quarter of 2022, compared to $1.4 million in the same period last year. The increase was primarily due to higher salaries and benefits due to an increase in headcount as well as increased consulting and study costs. Loss from operations was $9.5 million in the third quarter of 2022 compared to $7.2 million in the prior year period. Net loss was $10.7 million in the third quarter of 2022 compared to $8.3 million in the same period in 2021. We ended the third quarter of 2022 with $54.2 million in cash and cash equivalents. Finally, for the full year 2022, we continue to expect revenue to range from $42 to $45 million, representing growth of 43 to 53% over the prior year. I'll now turn the call back to Tony for closing remarks. Tony? Thanks, Roberto.
spk04: So, as you've just heard, things continue to proceed according to plan. Telebio has put in place and continues to expand and improve on each of the five factors driving our success, and growth in a competitive medical device industry. We have an exceptional product portfolio sold by a highly effective sales force. We offer our customers an excellent value proposition of functionality and price. Our supply chain is strong and our products are backed by a substantial volume of published clinical data. When combined, this has a very powerful impact and is why we are consistently generating such strong results. The one area of improvement we heard that the investment community wanted us to address was our balance sheet. To that end, we bolstered our cash position with an equity raise in August and are now well-funded to further execute on our strategy. I'd like to commend our team's ongoing tenacity in delivering strong performance despite the lingering challenges COVID presents for our markets. Looking forward, we will continue to focus on growing our five drivers of revenue and value growth. Finally, I'd like to reiterate something we've said to investors before. We are still in the early stages of a tremendous opportunity. We estimate the market for our Ovitex products is $2.2 billion, which leaves plenty of room for us to capture further share and drive significant future growth. With that, I'll now ask our operator to open the line for your questions. Felicia, please go forward.
spk00: Thank you. At this time, we will conduct a question and answer session. Please stand by while we compile the Q&A roster. The first question comes from the line of Frank Takanan, from Lake Street Capital Markets. Please go ahead.
spk05: Hey, thanks for taking my questions. Congrats on the results and all the progress. I wanted to start with one question following up on your comments, Tony, related to the Premier GPO. You said something along the lines of, good start with sales accounting for a noticeable portion in October in the Premier contract. Maybe just talk a little bit more about the early start to Premier and the anecdotal feedback you're hearing. And a more pointed question, how long do you think it could take for Premier to become a larger portion than Health Trust of total revenue?
spk04: Yeah, so, you know, the biggest, most positive news thus far around Premier is not so much the dollars contributed in October as described to Premier accounts. We like those a lot. but it's the large systems that we're starting to get access to and approval. There's been a very nice array of large systems that I think are gonna be tremendously productive for us over the next year. So it takes time to move an organization as large as Premier. Three months is not gonna be the measure, as I think you're alluding to with your question. There's a lot of setup work going on, communication across all those 4,400 hospitals. That's a lot of people and coordination, but it's working, and we're starting to get those approvals in some of these big systems, and we really, really like the future potential. The other most important aspect of Premier is that we are in the biosynthetic category, which puts us head-to-head with the leading resorbable synthetic material, which is likely over a $200 million business at this point, which means that we have graduated from the tough, tough cases associated with biologics to a product that is being acknowledged by a premier group purchasing organization that has utility across a wide array of procedures. So that's a big deal for us. And all of that's going to work together to propel us forward. I will remind you that the growth that we've achieved so far, and when we started off as a public company, we were less than 15 million in sales. We've done that with one GPO contract, and that contract has really been difficult and impaired to execute against during the COVID period. but we're still running about 36% of our revenue through Health Trust. And I think Health Trust is quite pleased with our execution and the way we conduct business, and we look forward to continuing that relationship for a very long time. So we are at the very early stages of attaining a level playing field around access. We'll get another significant GPO fairly soon in the next three to six months. And I think that contract characteristic will also allow us to have wide access. So, you know, I think they're all going to work together, right? All these GPOs will work together, and I hope they're all very strong. I'm hoping that Health Trust grows, and it's a race between Health Trust and Premier to see which one is bigger. You know, so that's sort of where my thought is on that, you know. I think we've got tremendous opportunity in those two. There's another one coming, and we look forward to maximizing the opportunity and potential in each one of those. That's what our partners expect us to do because we offer significant clinical value and cost savings. It's a partnership that works together.
spk05: Got it. Okay. That's helpful. Then maybe a bigger picture one on the competitive landscape. obviously the fastest growing hernia mesh on the market right now implying you're taking share from likely multiple players on the market but was curious if you have any feel for who you're taking the most share market share from in the hernia space well we're so under penetrated in this big market and there's so many cross currents and shifts happening between the categories you know synthetic polypropylene mesh
spk04: Resorbable Plastic Mesh and Generation 1 Biologic Mesh. I would say Generation 1 Biologic Mesh may be the biggest shift, but we are definitely, as we expand into a wider array of procedures, we're starting to see the synthetic polypropylene shift starting to come our way. Not quite as pronounced, but it's starting. We're in the early stages there. And then, you know, in that biosynthetic category, I've got to say, we offer a significant value proposition around both clinical data and performance, much better recurrence rates, and a better economic value proposition. So I think, you know, that's the next wave for us is to get more competitive and take share in those plastic segments, both permanent and temporary.
spk05: Okay. And then maybe just one last one for Roberto. Can you maybe run through what's contemplated for the low end of the guide versus the high end of the guide?
spk03: Sure. So, you know, as always, there continues to be uncertainty, not directly from the effect of COVID-19, but now from the second-order effects. So we're seeing a couple of dynamics. Something that occurred in the third quarter that we wouldn't expect to see in the fourth quarter is that a lot of physicians, and we confirmed this anecdotally at a couple of our cadaver labs, a lot of physicians who had not taken vacations last year because of COVID took more extended vacations this year, two to three week vacations, which reduced procedures. We know that nursing staffing continues to be a challenge. You know, there are a number of nurses who have exited the profession or are taking hiatuses, and depending on when or if they come back, that will affect how many procedures get done. And then one thing we're seeing in hospitals is that to manage their expenses, some hospitals are postponing surgeries that look like they might run into overtime and require additional payments to that nursing staff. So that staffing pressure as well is something that could swing us from the bottom to the top of the guidance range. It's not likely to be COVID infections directly, but there's knock-on effects. And then I just add that in the southeast, we're still seeing some challenge from the effects of heart pain a year.
spk05: Okay, that's great. I'll stop there. Thanks for taking the questions, and congrats again on all the progress. Thanks, Frank.
spk00: Our next Question comes from the line of Matthew O'Brien of Piper Sander. Please go ahead.
spk06: Hey, this is still on for Matt. Thanks for taking my questions and congrats on the quarter. I guess just for starters, you know, how is the market trending so far in Q4? And if you could provide color on how Q3 went. You know, anecdotally, we've heard from other companies on that COVID vacation elongations. So, you know, was there a noticeable step up at the end of Q3 that kind of trended forward here in Q4? And are we still below that pre-COVID level of volume, you know, in that 80 to 85% range?
spk04: Yeah, I'm going to start with that last piece first. I believe we are still below. We've had some good conversations with general surgeons who have more of an executive management role, some health systems, and they feel like they're still running at 85%, which means they're not really eating into the backlog. So it may be a protracted rolling backlog, right? They're going to have to get up to 115%, you know, on a regular basis for a long period of time to work the backlog down. So I don't think that backlog, at least in hernia, has really been solved yet. So the fact that we can grow so well with that is just excellent. And we're well positioned as that rolling backlog slowly resolves itself to be very well situated. Taking care and being in the right place at the right time with the data that we have of the natural repair product in the face of all the headwinds around plastic is It feels pretty good that we're in the right spot.
spk03: Sure. And so as far as the cadence of Q3 and Q4, so July began fairly strong. We saw some of that vacation effect more in August. We got some bounce back in September with a caveat that at the end of September, Hurricane Ian did affect our southeast territory, which tends to be one of our more successful territories. And we've seen some drag-on effects from that at the beginning of the fourth quarter.
spk04: Yeah, I think overall the fourth quarter has started stronger. You know, there's still these weird error pockets that you run into, like we have discussed in the third quarter. But by and large, you know, fourth quarter is usually strong, and we don't anticipate that it should be any different. this year, you know, given the ups and downs of what we're contending with with these second order derivative knock-on effects that Roberto described. Those aren't going to go away. They seem to rise up and then calm down.
spk06: No, that's helpful. Thank you for that, Culler. And I guess just finally, you know, you're still on pace for 60 reps this year. So call it, you know, about 15 reps added in 2022. Looking ahead to 2023, and I can appreciate if you don't quite have this color yet, but are you expecting to add a similar amount of reps, call it 15 in 2023, or do you have any insight onto your expectations? Thank you.
spk03: Sure. So we're actually right in the middle of our budgeting process right now. So we're building up all components of the P&L and obviously taking particular attention to sales and marketing. What I'd say is I'd be surprised if we didn't add any reps. but the exact quantum of them is still up in the air, and we'll have a lot more to say about that on our fourth quarter call.
spk04: Yeah, but one thing I will add to give you a little directional color as to what our thinking is, you know, our rep productivity metrics remain good three to six months, and the access is getting bigger and wider. So we are very conscious of the fact that we want to take advantage of this access as the GPO contracts come online.
spk02: Great, thank you. Alicia, next question, please.
spk00: Hello, apologies. Our next question comes from the line of Kyle Rose of Canacard Genuity. Please go ahead.
spk07: Great, thank you for taking the questions. And apologies, we've been bouncing around a couple calls here. Wondering if we could talk a little bit more about the sales rep productivity. I think in the beginning you talked about the newer cohort hitting break even earlier than expected. So congrats on that, but maybe just where are they seeing the most success early or from the playbook? Is it on the traditional Ovitex side or on the PRS side of the business? And then can you just confirm with the premier contract, does that include both Ovitex and PRS?
spk04: Yes, all of our contracts that we are engaged with are for all products. So that's excellent. I would say, you know, we've got a cohort of reps here. that have been very strong on the hernia side. And then we have a newer cohort of reps that are starting off very strong on the PRS side. You'll recall that one of the things that we're really focused on, and maybe this will be more of a next year metric, is sell both products in one place, one hospital. It's a nonlinear positive impact on the business. It's roughly a one plus one equals four. versus 1 plus 1 equals 2. So that's likely a focus going forward, which is going to do nothing but aid in that rep productivity. I think one of the learnings from this year, just to not get too granular around color, is that it's probably best to bring our new cohorts, new classes of reps on, you know, Not during the summer months, right? So things tend to slow down there. Maybe it's a good time to train them. I think we have to think through when we run the training classes. I mean, we certainly like a Q1 training class. We like an end of Q3 training class. So I think we're still figuring that out. But we're very encouraged by the productivity metrics, and it certainly has the feel that we're in the early stages of that getting even better you know, with the access that's now available to Premier and future access that we will generate through other contracts. So we'll be monitoring this very closely. And, you know, there's nothing but upside, I think, in these productivity measures going forward.
spk07: Great. And then when you talk about PRS broadly, you know, Where are you at from an early adopters to a middle adopters perspective? I realize it's still early here, but there's not a lot of data in the market for any of the competitive technologies. So just really wondering what you're running up against as a governor on some of the productivity from an upside perspective.
spk04: Well, we're three years behind in the uptake in comparison to hernia. So I think PRS is progressing very well. you know in comparison to the progression in the early stages of the hernia business and you know I think it's going to do nothing but get stronger again driven by the five factors right bigger sales force better access and you know there's there's some interesting products that we're looking at for the future that are going to hang around the PRS business which which I think will be very helpful And lastly, it's really the clinical data aspects. And we're collecting, under an FDA retrospective study, a significant amount of PRS clinical data. We're doing it the right way. So as that emerges, I think that may be one of the last elements in the five factors that will help to propel PRS going forward. Otherwise, you know, four of the factors are in pretty good shape around the PRS business. We're just a little bit earlier in the progression, so I'm going to say we're very much still in the early adopter phase.
spk07: Okay, great. Well, thank you for taking the questions. Congrats on a good quarter. Thanks, Kyle.
spk00: Our next question comes from Dave Turkley of JPM.
spk01: Hey, good evening. Just to follow up on that productivity commentary, I think in the first quarter you gave us sort of a Salesforce cascade with sort of the number of folks that are doing different levels of sales. And I was wondering, I don't know if you have that specific data in front of you, but I guess we should assume that you've got more people doing over a million, more doing over two million. Any thoughts there, any color, how it looks today? Okay.
spk03: Yeah, so Dave, we don't have that data on us right now, and we're trying to move away from it for a reason that we've discussed occasionally. So one of the ways that we increase productivity is we'll occasionally take, and we're doing this more often now, we'll occasionally take a stronger performing territory and subdivide it, providing a portion of it to a new rep and holding the old rep, you know, giving them an override so that they're not economically harmed for some period of time. So the measure doesn't work quite as well, you know, doing that going forward, the 1.5 and the two, you know, cut points. What I'd say, though, is that on an unsubdivided territory level, we're continuing to see territories get larger. We're continuing to see more of them pass through the thresholds. And at the bottom end with our newer reps, we're continuing to see the reps climb through the uh the ranks from the half million to the three-quarter million to just under a million um even more quickly than we have in the past yeah i'd say we're pretty pleased with the progression uh if you if you look at that one million and two million dollar quantity even with all of that got it and then maybe um just a quick follow-up for roberto can you just remind us the terms on the debt like the rate maturity and then uh
spk01: I know you've been building some inventory. I was wondering if this sort of level that you have now is what you think is kind of the normal level for you moving ahead, particularly as we're hopefully getting out of these COVID headwinds for good. But any comment there on sort of that level? Thank you.
spk03: Sure. So let me start with the inventory. So, you know, we do expect that inventory going forward is going to grow more similarly to the rate of revenues. Over the past year, we had to do some inventory stock-ins to prepare for potential disruptions, particularly in Europe. So now that we're at a bigger base of revenues, again, the inventory should grow more closely at the same rate as revenue does. As far as the debt facility goes, the all-in interest rate is something on the order of 9%, chopped up into a couple of different types of payments. It's an interest-only facility for three years, which can be extended to four years if we meet certain thresholds, which we expect are pretty easy to meet. And then there's amortization over the course of either the last two years or one year to that fifth year.
spk02: Got it. Thank you. Thanks, Dave.
spk00: Our next question, our next and final question, comes from the line of Zach Wiener of Jefferies. Please go ahead.
spk08: Hey, guys. Congrats on another good quarter, and thanks for taking the question. I just want to touch on backlog again. You made a comment that you haven't seen much backlog or capture. So I'm curious if you could talk about how large that backlog is and how you think about backlog or capture as some of these headwinds start to ease up a bit.
spk03: Sure. So I'll start and then Tony can jump in. So the way we estimated the backlog was to take a look at the growth rate in hernia immediately before COVID and then measure the trends that out and then measure the variance from that trend in the actual hernia repairs we were seeing. And then we checked that with some physicians that we know, including some hospital administrators who confirmed that, you know, on the order of 100,000 cases sounds right. Now, if you think about the backlog as essentially an inventory, you're going to get patients coming out of the backlog and new patients going into the backlog. And Tony's point was that if you're not doing procedures at the same rate as you were before the backlog was established, if you're doing them at a lower rate, you're not going to be working down the backlog and it may even continue to grow. So what we have been seeing and hearing from physicians and hospitals is that the rate continues to be on the order of 85% of pre-COVID levels, which means that even though the same individual patients are not in the backlog, it may have turned over, the size of the backlog has not decreased substantially. I don't have much to add to that. Okay.
spk08: Very helpful and comprehensive. I appreciate it. I guess Following up on that, you know, is the backlog consist of mostly ova sex or PRS, a combination? Any color on that?
spk04: I would say it's mostly hernia. Yeah, I mean, PRS is a different animal. It's connected to cancer surgery. So I think there's going to be a different approach there.
spk03: Yeah, as we've commented on past calls, the PRS market tends to be much more resilient to COVID disruptions. because those breast reconstruction surgeries are connected with mastectomies associated with cancer, which are surgeries that you can't really delay and which have priority even during COVID, whereas the hernia cases can be delayed. One observation we heard from one of the hospital administrators we talked to is that what they were seeing is that the hernia cases that they were repairing looked like they were more serious. The tears had gotten larger as patients delayed them, but you are able to delay them until some point when they become emergent.
spk08: Got it. That's helpful. And then quickly on Bravo 2, I know you said you're starting to enroll again. Can you just give some color on kind of what that trial or what that study is going to look like and how we should think about the timelines there?
spk04: Absolutely. So Bravo 2 was significantly delayed by COVID, not a high priority on many hospitals list to do a post-market clinical study when so much other stuff was going on. So I think we're coming out of that. We're in the double digit enrollment now. We have a whole group of new sites that are coming on board. And I think we're starting to see it move. So I don't know exactly when I can give any color on when enrollment will be complete. I think we've got to see maybe a couple of more quarters of performance and how these new sites perform before we can do that. So I don't think we're in a position to do that right now. But one thing I do want to emphasize is that we're looking at Bravo 2 mostly as a confirmatory study. It's robotic in nature. But right now, 40% of our cases day in and day out are done robotic, and another 20% are done laparoscopically for a total of 60% are done minimally invasively. There is a subcomponent of patients within Bravo 1, which were done robotically, so that data is there. And then we've got well over 1,000 patients in various registries, single arm studies, case theories from a wide array of surgeons for a wide array of hernia types. And those recurrence rates and clinical data signals are exactly what we're seeing with BRAVO1. Low, low single digits. So I think we've got enough proof source to show that we've got an excellent product portfolio for everything from the most complicated procedures to the most simple robotic procedures. So, you know, and we filled a lot of that data in during the COVID period. So we made good use of the time. So I think Bravo 2 will report out on it. I think it's going to be a great study, and I think it's going to be very confirmatory. We'll learn some interesting things, but I don't feel like it's holding us back right now in the MIS and robotic procedure grouping.
spk08: Thanks for that call. Just one more for me. I'll try. I appreciate the color on extended vacations and whatnot during this summer, certainly something that we've heard through other areas of MedTech. Any way you could put some numbers around how much you think that impacted growth and where revenue could have been in the quarter had it been more of a normalized quarter? Thanks for taking the question, you guys.
spk03: Sure. So that's a pretty tricky one to estimate because there are a couple of dynamics that are occurring all at the same time. So one of them is obviously the total number of procedures has been suppressed by staffing, by that desire of hospitals to avoid overtime. And so that gets you to that roughly 85% of prior procedure levels. The challenge is that that's not necessarily proportionally distributed the same way. So one of the things we've been hearing is that hospitals have been prioritizing more lucrative surgeries, so knee replacements, hip replacements, at the expense of less lucrative surgeries, which would include hernia repair. So some of the dynamic may be the prioritization of those, again, more lucrative surgeries over our surgeries. And some of it may just be a reduction in the total number of procedures that are taking place because of vacations. So that's a very long way of saying it's really difficult for us to make an estimate of that. We're pretty confident that that is one of the effects that's been contributing to the quarter. We just can't come up with a number for how much that is.
spk00: At this time, I would like to turn the call back over to the speakers for any further additional comments.
spk04: Thank you, Felicia. And thank you for joining us this evening, and thank you for your interest in Telebio. We are definitely in the early stages of ramping this business, and I look very much forward to the continuation of our growth over the next 12 to 24 months. We're very excited. The team here is very motivated, and it's a great place to be inside this company right now. So thank you.
spk00: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
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