TransMedics Group, Inc.

good afternoon and welcome to the transmedics fourth quarter and full year 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 telephone keypad to withdraw your question Please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Brian Johnston from the Gilmartin Group. Please go ahead.

Thank you. Earlier today, Transmedics released financial results for the quarter and full year ended December 31st, 2022. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call, including during the question and answer portion that include forward-looking statements within the meaning of federal securities laws. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including without limitation, are examination of operating trends, the potential commercial opportunity for our products, and our future financial expectations, which include expectations for growth in our organization, and guidance and or expectations for revenue gross margins and operating expenses in 2023 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. Additional information regarding these risks and uncertainties appear under the heading Risk and Risk Factors on our Form 10-Q filed with the Securities and Exchange Commission on November 4th, 2022, and our subsequent filings with the Securities and Exchange Commission, which are available at www.sec.gov and on our website at www.transmedics.com. Transmedics disclaims 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, February 22nd, 2023. And with that, I will now turn the call over to Waleed Hassanin, President and Chief Executive Officer.

Thank you, Brian. Good afternoon, everyone, and welcome to Transmedic's fourth quarter and full year 2022 earnings call. As always, joining me today is Stephen Gordon, our Chief Financial Officer. Our fourth quarter performance demonstrated continued commercial momentum and accelerated clinical adoption through the NOP, despite constrained supply of our OCS perfusion module as we are working to increase finished goods assembly capacity. This marks another quarter of significant sales growth for the business. Here are the summary results. 4Q total revenue was $31.4 million, representing 225% year-over-year growth. and approximately 22% growth over the third quarter of 2022. As expected, NLP continued to be the primary driver for the revenue growth, a trend we expect to continue for the foreseeable future. Total revenue for the full year 2022 was 93.5 million, including new product and service revenue of 92.1 million and 1.4 million favorable contract revenue adjustment in 3Q. These results represent 209 and 204% year-over-year growth, respectively. We effectively tripled our revenue in 22 over 21. Stephen will cover the financial details and organ split in his section of this call. Now, let me provide some more granular highlights on the quarter and the full year. Overall, 4Q represented a high watermark for case volume for OCS and NLP, as heart and liver cases increased sequentially for the fourth consecutive quarter. We were also pleased to see modest but encouraging growth of lung activities in Q4, a trend which we hope to maintain in 23. Approximately 89% of our total US case volume came from NLP. On a per organ basis, approximately 97% of the liver, approximately 79% of the heart, and approximately 85% of the lung cases were from NLP. 2022 has demonstrated to us that NLP is here to stay and is uniquely differentiating transmedics in the marketplace. Our goal is to drive NLP to be the new standard of care for solid organ transplant in the U.S. over the next several years. As we predicted, and despite being in the first year of commercial launch of OCS liver and heart in the US, the overall transplant market saw modest overall transplant volume growth year over year. Liver transplant grew by approximately 3%, heart transplant grew by approximately 9%, and even lung were up approximately 7% in 22 over 21. We believe this is an encouraging early sign that the use of OCS and NLP are enabling growth in the overall transplant volumes in the U.S. through the use of VCD, extended criteria, and distant donor in the U.S. Simply stated, the OCS and NOP are fundamentally growing the transplant market. We will continue to track this annual trend, and we expect to see these growth rates to increase over time with NOP growth in all three organs. We ended 4Q22 with critical massive transplant programs using OCS and NOP. There were 22 liver programs that used OCS and NOP in Q4, of which there were 12 active users. For heart, there were 29 programs that used OCS and NOP, of which 12 were active users. In lung, there were 13 programs that used OCS and NOP, of which five were repeat users. It is important to note we have achieved the above results despite being in a supply-constrained situation for several weeks during 4Q as we continue to build up our production capacity to meet the growing demand for OCS. We were able to navigate this difficult situation, grow our case volume, and grow our revenue by leveraging the NOP hub network to supply OCS modules to any location across the U.S. to meet the demand using charter flights. This early inefficiency in the supply chain distribution was the primary driver of the 4Q service margin erosion since Transmedics had to absorb these costs to meet the demand. We expect this to be a transient phenomenon and that this will revert once we scale our production capacity and develop more leverage in the logistical process. Let me use this opportunity to update you on several actions that we've taken to enable us to overcome the production capacity constraints over the coming several months. We've already expanded our clean room space. The documentation for FDA certification is under review by FDA, and we are expecting the certification or FDA decision over the coming months. We are expanding our existing sterilization capacity and are in the final stages of qualifying a larger sterilization partner to expand total capacity and further de-risk our supply chain. We have staffed a second assembly shift that is now fully operational. Importantly, we've brought on Nick Cochran, who has served in multiple roles of increasing responsibilities at Stryker Corporation as our Senior Vice President of Supply Chain and operations to lead these initiatives as we continue to scale. In summary, we expect to resolve production capacity constraints by the second half of 2023. There's no doubt in our mind that 22 was a transformative year for Transmedic's business as we demonstrated the significant value proposition and growth potential for OCS and NOP in the United States. We strongly believe, however, that this is just the beginning of a long runway of sustained significant growth for transmedics business. Let me articulate our strategies to achieve our growth potential. First, starting in 2023, and as soon as we adequately enhance production capacity, we will focus in four areas to grow our U.S. transplant franchise further. Specifically, we will Continue to add new transplant programs to the NLP initiative in the US for liver, heart, and lung. We will drive deeper penetration within existing and new transplant programs based on the demonstrated efficiency and clinical outcomes of OCS cases at these programs. Focus on growing the overall transplant volumes at these programs from DCD, extended criteria, and distant standard donors. using the NOP infrastructure. Finally, reinvigorating the OCS lung program through the NOP in the U.S. to contribute additional growth. Second, we will continue to expand our NOP infrastructure. Specifically, we are expanding our surgical capabilities and clinical support staff across the board and may be opening new launch points as needed to expand our geographical reach in the U.S. Third, we are developing a best-in-class dedicated air and ground logistics network for organ transplantation in the United States. This is critical. Let me repeat, this is critical to managing our growth potential and controlling our transportation costs and improving our service margins. Importantly, we strongly believe that this initiative would create a significant catalyst for further growing the NOP franchise in the U.S. Importantly, it will create a larger, deeper, and wider moat around our NOP offering while uniquely positioning us to more fully transform the standard of care in the United States. by continuing to invest in our next-gen OCS and next organ programs. This is critical to our long-term growth, importantly to further distance ourselves from any potential competitors on the horizon. Let me conclude this section by sharing some important facts to help quantify the magnitude of growth in front of Transmedics that we are planning to fully capitalize on. In 22, we transplanted approximately 1,000 cases on OCS. This represents only 7% of the existing total U.S. liver, heart, and lung transplants in 2022. We strongly believe that we have the potential and are creating the NOP infrastructure to be able to perform the lion's share of the existing U.S. transplant volumes for liver, heart, and lung transplants. In addition, we also expect to benefit from our ability to grow the overall transplant volumes as we have demonstrated early on in 22 by enabling the use of organs from DCD, extended criteria, and distant standard criteria donors that were seldomly utilized for transplantation in the US due to the limitations of historical procurement and preservation methods. This effectively will grow our total addressable market opportunity for transmedics and organ transplantation. In all, we are humbled and thrilled by our successes in 22 and we're looking forward to continuing to build on this solid foundation to catapult transmedics to new heights in 23 and beyond. We are confident in our strategy and we are laser focused on execution of our plans to drive the next year of growth for transmedics and NLP. As mentioned, 4Q results continue to outpace our forecasted demand plans and challenge our finished goods production capacity. As we stand today, we foresee this issue continuing with us until probably the end of Q2, which may be impacted by a temporary shortage of supply of finished OCS products in the immediate term. During this ramp-up process, we may find ourselves in another backorder situation in Q1 or Q2 2023. That said, based on our 4Q and full year results and balancing these results with the expected finished goods pressures in H1 2023, we are setting our annual revenue guidance for full year 23 to be between 138 and 145 million in revenue. representing a strong 50% to 57% growth over 22 total revenue, excluding contract revenue reversal. With that, let me turn the call to Stephen to cover the detailed financial results for the quarter.

Thank you, Waleed. I will now provide some additional detail on the Q4 results and other financial information for the quarter and the year. For the fourth quarter of 2022, our total revenue was $31.4 million. This is an increase of 225% from the fourth quarter of 2021 and a 22% sequential increase from last quarter. In the US, revenue was $29.1 million. US revenue increased over 300% from the fourth quarter of 2021 and 25% sequentially from last quarter. The Oregon breakdown on US revenue was $16.1 million of liver, 11 million of heart, and 1.9 million of lung. Ex-U.S. revenue was 2.3 million, a 5% decline from Q4 of 2021 in U.S. dollars, but in constant currency, non-U.S. revenue grew 7%. And the ex-U.S. revenue was 2.1 million of heart, 0.2 million of lung, and 0.1 million of liver. We also are reporting the breakout of product and service revenue this quarter. The service revenue includes the added amounts we charge for the surgical procurement and organ management as part of the NOP. In Q4, product revenue was $25.1 million and service revenue was $6.3 million. So the service portion was about 20% of the total in Q4. Gross margin for the fourth quarter of 2022 was 66%. This is down from 72% in the fourth quarter of 21 and reflects the higher NOP service component and the early inefficiencies that Waleed mentioned in his remarks. The margin on product revenue was 79% in Q4 2022, and the margin on service was 14% in Q4 2022. Total operating expenses for the quarter were $27.5 million. That's 50% above Q4 of 21, driven primarily by our continued investment in scaling our NOP infrastructure and resources to be able to meet growth in NOP demand. Our operating loss was 6.8 million in the fourth quarter of 22 compared to 11.3 million in the fourth quarter of 21, primarily a result of the growing revenues in the business. And our net loss for the fourth quarter of 2022 was 6.7 million compared to 12.7 million in the fourth quarter of 2021. Total cash was 201.2 million as of December 31st, 2022, which equates to a reduction of 3.3 million from the balance at the end of Q3 of 2022. and weighted average common shares outstanding for the quarter were $32 million. From a cash perspective, Transmedics remains in a very strong position to continue to execute our strategy and increase OCS and NOP utilization throughout the organ transplant field. Now, let me share some detail on the full fiscal year 2022 results. For the full year, total revenue was $93.5 million, a 209% increase over the prior year, and included the $1.4 million favorable reversal of contract revenue in Q3. U.S. organ breakdown for the full year was 46.1 million of liver, 29.9 million of heart, and 8 million of lung. And OUS was 8.5 million of heart, 0.9 million of lung, and 0.1 million of liver. Product revenue for the year was 79.2 million, and service revenue was 14.2 million. Gross margin for the full year was 70%, the same as in 2021, and product margin was 79%. The service margin was 21% for the full year of 2022. And total operating expenses were $96.7 million for the full year 2022. That's up 60% from $60.6 million in 2021. Operating loss was $31.4 million for the full year 2022 compared to $39.4 million in 2021. And net loss was $36.2 million in 2022 compared to $44.2 million in 2021. 2022 is a significant year for transmedics, as we demonstrated the commercial strength of the OCS, the NOP, and transmedics in general. As Waleed discussed, we are very enthusiastic about our opportunities to grow OCS and NOP adoption in 2023 and over the next several years. To repeat Waleed's earlier comment, we are providing annual revenue guidance in the range of $138 million to $145 million which represents 48% to 55% or 50 to 57% excluding the favorable contra reversal in 22. Now, I would like to turn the call back to Ali for closing comments.

Thank you, Stephen. To summarize, 22 was a transformative year for Transmedics, delivering exceptional 209% revenue growth. We strongly believe, however, that we are in the early stage of a long sustained growth period for our business and organ transplantation in general in the US. We are now laser focused on scaling our production capacity and NOP clinical and logistics infrastructure to achieve our goals. With OCS and NOP, Transmedics is uniquely positioned to lead the global transplant space into the future. We look forward to furthering our impact in 2023. With that, I will now turn the call to the operator for Q&A. Operator?

We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. Our first question is from Alan Gong with JP Morgan. Please go ahead.

Hi, this is actually Rohan on for Alan. Thanks for taking the question and congrats on a nice quarter. I just wanted to start off with 2023 guidance and specifically was hoping you could talk more about what this range assumes by Oregon. in addition to new center ads and penetration rates?

You mean 2023 guidance?

Yeah.

Yeah. We never provide guidance on center or organ. We provide total revenue guidance for the year, and we're not planning to change that anytime soon.

Okay, and then I guess shifting over to the next question, would you be able to comment more on the durability of demand that drove our performance during fourth quarter and also just if you could give additional color on the supply situation as it stands today and specifically, I guess, your ability to meet demand in 23 given that we're kind of most of the way through the first quarter already?

On the demand, we believe that the demand was really in the early innings in 22, even in Q4. We expect that demand to continue to grow throughout 23 and beyond. And this is why we're focusing on scaling our supply capacity. This is why we are adding new leadership, expanding footprint of our production space, adding second shift, because we need to create that infrastructure to allow us to continue to be ready to meet that growing demand. We do not expect this demand to be a one and done thing. We expect this to continue to grow. And until we're out of the supply capacity, we have to be prudent and we have to be conservative in our guidance and our estimation because we know what a backorder situation could create. So I hope I addressed your question.

Yeah, that was helpful. And I guess just to clarify something, I believe you mentioned that you hope to resolve production capacity by the second half of this year. If I'm not mistaken, you just wanted to – okay, great. Thank you. That's correct.

That's correct. Thank you.

The next question is from Cecilia Furlong with Morgan Stanley. Please go ahead.

Great. Good afternoon, and thank you for taking the questions. Waleed, I wanted to follow up a bit on the supply dynamics. And you talked about a bit of pressure in 4Q. I don't know if there's a way to to quantify the impact from a top line standpoint. But as we think about the first few quarters of 23 ahead of scaling supply, how should we think about upside relative to the 4Q run rate?

Cecilia, because we expect the demand to continue to grow and we expect the demand to continue to outstrip our ability to beat it. I would be, from our perspective, we would highly advise to plan Q1 and Q2 either flat or modest growth because we expect to find ourselves again outstripping our increased capacity that we are experiencing with the second shift. This is why we're taking this methodical and conservative approach to our guidance.

Okay, understood. And if I could follow up, Stephen, on gross margin, as you think about just your initiative in 23 to ramp the logistics side, how should we think about the margin expansion story? I know you've talked about the 75 or mid-70s at scale. How should we think about the progression in 23 and coupled with that too, just from an OPEC standpoint, from an SG&A side, as you think about continuing to build out the NOP model? Can you talk through how you're thinking about just the ramp on a relative basis in 23.

Yeah, thanks, Cecilia. And, you know, it's a good question about margin. So, you know, margin was challenged in Q4 because of the limited supply, and we had to provide other costs that allowed us to be able to grow the revenue. That's going to continue in 2023. I would expect similar margins overall, maybe slight changes, sequential improvement throughout the year. The goal, the mature goal, the mid-70s, I don't see that in 23 until we're completely out of supply constraints and with more revenue on the top line. As far as spending, we do expect to grow spending in 23. I would model, just for modeling purposes, I would think of a range of about 25% to 30% overall effects single digit on R&D and, you know, the rest in SG&A. Great.

Thank you for taking the questions, and congrats on the quarter.

Thank you, Cecilia.

The next question is from Josh Jennings with Cowan. Please go ahead.

Good afternoon. Thanks for taking the questions, and I'll echo the it's good to see a strong finish to the year. I was hoping, Malie, to just ask about, I guess, the three buckets that you called out on the call, DCB, my extended criteria, DBD, and then distant standard organs, donor organs. It seems like, I think you mentioned earlier in the year in some public commentary just about OCS volumes were kind of spread widely throughout each of those buckets. And maybe if you could just build on comments earlier in the year today and just help us think through, because I think some are thinking that the OCS opportunity may be limited or heavily weighted towards the DCB opportunity, but looking at the national database, it seems like DCB organs are still very, very early in terms of the step up in 22 versus 21. Sorry for the long-winded question, but hope you got the gist of it.

Yeah, absolutely, Josh, and thank you for the question. This is exactly why I went through the the script to highlight that we're growing the overall transplant market, not just by DCD organ. In fact, DCD organ, when you look at the blended rate across all three organs, was less than 50%. But we're actually seeing DDD organs, either distance procurement is leading the way, extended criteria DDD organ. OCS is being used across all transplants. including transplants within the same hospital and using NLP. So this is not intended to segment or limit. I was trying to actually highlight the opposite, that the OCS is being used across the gamut of organ transplants.

Excellent. Thanks for that. And just two other areas we just heard surgeons talk about recently. One was the rapid recovery approach that you may be or some centers are using are particularly OPOs when donors are either becoming more compromised and there's not enough time to match and use serology testing to match the donor with the recipient and just explaining the organ, putting it on the OCS system and then running those serology tests and then matching the organ. and then also just the stacking of organ transplant procedures by NOP adopters. We'd love to hear kind of how early we are in those two approaches that OPOs are using as well as liver and organ transplant centers, rapid recovery and stacking, and where you see those two buckets kind of contributing to growth in 23 and 24. Thanks for taking the questions.

Thank you, Josh. We're very early on both. You know, stacking is becoming more and more a routine process in the active users and heavy users, the super users of NOP, and they're preaching it to their colleagues and other transplant programs. The rapid deployment of NOP to salvage an organ, it's in their way early innings. I think we are just scratching the surface. This is another mechanism of how can we increase the supply of organs from routine standard organs that traditionally would have been lost because there is no OCS or no NOP that would salvage these organs. We've done a handful of those procedures throughout 22, and we expect that this is just the beginning. We expect this to grow. We're seeing more OPOs coming to us, not just for that, but coming to us just to encouraging us to creating hubs near major OPOs to help them out, allocate more organs. And again, we're evaluating all this with laser focus on making sure we are progressing and expanding and growing methodically and with maintaining the highest clinical quality of managing these organs and delivering an OP service.

Thanks for those answers. Appreciate it.

Thank you, Josh. Excuse me. The next question is from Bill Plevanek with Canaccord. Please go ahead.

Great. Thanks. Good evening. My first question is just on the impact of supply on the fourth quarter. How many cases do you think you lost, number one? Number two, as we look at the kind of active users and the accounts you're in, how much impact did this have on new account adoption or your limitation of new account adoption? And then I have some follow-ups on that.

Great. Thank you, Bill. I think let me start with the second part of the question. Of course it impacted initiation of new programs. We were highly selective and we, however, we maintained an open dialogue, we expressed why we couldn't do it sometime, but we could do it. We mobilized heaven and earth to make sure that NOP hubs that have supply would go and get these organs. So, of course, it negatively impacted our ability to grow active users in Q4, but we have already forecasted that. And, you know, until we're out of this supply constraint, we expect this to continue to happen, and our team is getting... is getting great at making sure we're managing expectation appropriately and not causing any untoward reaction. The first one, as you know, we never really quantified the magnitude other than the number of weeks. And in Q3, we had, I think, one and a half or two weeks of shortage that we could not perform cases. In Q4, we had approximately two to three weeks of shortage, and it impacted both liver and heart. So we're hopefully marching towards a time where this is no longer an issue.

Great. And then if I could dig into it. So from my understanding from the manufacturing standpoint, there's kind of multiple points. There was one, a human problem where you didn't have enough people. You added the second shift. What revenue level can you support with the second shift until the incremental capacity comes on board, which I think you said you expect now by the end of the second quarter or end of the first quarter for that incremental capacity? Thanks for taking my questions.

Thank you, Bill. I said we expect the incremental capacity to start coming online in the second half of the year. I wasn't specific end of the first or end of the second. So that's number one. Number two, right now we are not providing granular information on the revenue potential because we are just trying to maximize the throughput and manage the existing demand. So I would caution not to share anything at this point because this is all going to change within the next few months here once the New clean room comes online once Nick finished bringing in the additional firepower that he needs to run this with a smooth process. Once he finished the layout and everything else, this could have significant efficiencies to increase the numbers, whatever number we think we have today. Great. Thank you.

The next question is from Suraj Kalia with Oppenheimer. Please go ahead.

Waleed, can you hear me all right? I can hear you just fine, Suresh. Perfect. Pardon the background noise. So first and foremost, exceptional quarter. Congrats to you, Stephen, Tamer, and the whole team. So, Waleed, let me start out on NLP. Do you have the flexibility to increase NLP pricing over time? And the second part to that question is, so, you know, you mentioned the active sites versus the total sites for each organ. Great. But a number of these sites, as we know, are contracted for transport with some other agency. I'd love to get your perspective of what happens, you know, how long a process is there to proselytize them to NLP, you know, and how does the process work there?

So Suraj, let me address the, I'm sorry, can you repeat the first part of the question? I got the second part. What was the first part?

So just the flexibility of NOP pricing, right? We are today, what, 15, 20 grand? Why couldn't we increase it to 30, 40, 50 over time? Because that's what the statistics indicate with the current logistics providers, you know, end up charging.

Right. So, Suraj, you know, listen, we are early in the NOP. And our strategy has always been that NOP is nothing but a catalyst to drive growth of the disposable sales and disposable utilization. So we cannot out overprice the NOP portion that actually end up having a negative impact, not a positive impact. And when we talk about NOP service charge, this is excluding the any plain charges. This is just personnel in the surgical front, surgical procurement fee, and clinical management of the organ. We think we are in good shape. In the future, we'll reevaluate. But right now, I'm not expecting significant changes on the pricing of the NOP service component. Related to the transportation, listen, transportation for organ transplant in this country is a broken field. It is not harmonized. It is individualized. Many of those contracts you're referring to are with entities that don't even own a single jet, and they're nothing but brokers in the middle of the night trying to broker a flight from a high net worth individual or another operator and it is very inefficient from a cost structure standpoint. I am not worried one bit about what existing contract would do. I am more laser focused on establishing our own network and creating the Amazon or FedEx model for organ transplantation for the NLP. I am confident if we do this right and we do it at the scale we want to do it at, that the existing contracts will melt and it won't be any issue for us to see transformation of the field in the way we hope to see.

Got it. Last two questions, one for you, Waleed, one for Stephen. So for you, Waleed, in terms of lungs, love to get your thoughts. Obviously, you'll have gone gangbusters on heart and liver, right? Everyone is now focusing their attention on lungs. How soon could this take off? Any additional color there would be great. And Stephen, specifically for you, when we started out FY22, guidance was approximately 50 million, if memory serves me right. Here we are, we ended the year with almost double, because you guys did have couldn't provide product for the last two quarters or some weeks. So help us understand FY23 guide. What is the level of conservatism built into these numbers as you'll see the year ahead? Gentlemen, congrats again, and thanks for taking my questions. Great. Stephen, you want to address this?

I'm very happy to answer the conservatism question first. I don't think I can give specifics around it. The thing I would say to you, though, is last year was really our first year of commercialization. So there was really a lot of unknown in how the market was going to evolve, and especially the pace that the market was going to evolve. So now we have a lot more information. We have a lot more history. And so we will put that all together with our guidance. So I can't really talk about the level of conservatism, but I can tell you we just have a lot more information today to predict than we did a year ago.

Suraj, I want to also add or build on what Stephen just said. Listen, we know we have lived in two quarters with level of conservatism. I'm sorry, level of backorder situation. We know what the impact is on our customers, our NOP franchise, and the revenue. We have to be conservative, at least in the first half of this year. Until we are out of this supply constraint, we have to be extremely careful, prudent, and conservative. But it's not at the same level as Stephen said. Last year, we didn't know the ramp curve of NOP, and especially on heart. Remember, we started heart at NOP less than 20%. We ended the year at high 70s, low 80s. So we have better visibility now. Now let me go back to your first question about the lungs. Listen, given the huge negative impact that lung has been suffering from for the last several years, We have to be cautious. We have to assume that our efforts is going to take the full year before we start seeing some tangible progress or uptake in the lung numbers and the lung activities in the US. We are taking this very seriously. We're focused on that and we guide for patients and we guide for looking at the long-term horizon. This is not going to happen overnight. Remember, the ISHLP is not happening until end of April. That is usually a big catalyst for lung and heart activities every year. So we're not going to have that impact until probably Q2. So we're guiding for the full year impact, not in Q1 or Q2. So I hope I'm addressing your question, and we're looking forward to your visit on Friday. Thank you.

This concludes our question and answer session. I would like to turn the conference back over to Walid Hassanein for any closing remarks.

Thank you. We want to thank everybody for joining us in this call, and we're looking forward to speaking again on our 1Q23 call. Thank you. Have a great evening, everyone.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.