Minerva Surgical, Inc.

Good day, and thank you for standing by, and welcome to the Minerva Surgical, Inc., fourth quarter and full year 2021 earnings call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised this call is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your host today, Caroline Corner, Investor Relations, you may begin.

Thank you, operator. Welcome to Minerva's fourth quarter and full year 2021 earnings call. Joining me on today's call are Dave Clapper, President and Chief Executive Officer, and Joel Young, Chief Financial Officer. This call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding the markets in which Minerva Surgical operates, trends and expectations for Minerva's products and technology, trends and demands for Minerva's products, Minerva's expected financial performance, expenses, and position in the market, and outlook for fiscal year 2022, and the impact of COVID-19 and its variants on Minerva's operations and Minerva's customers' operations. These statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results, performance, or achievements to differ materially from any results, performance, or achievements expressed or implied by the forward-looking statements. Please review Minerva's most recent filings with the SEC, particularly the risk factors described in Minerva's annual report on Form 10-K for the year ended December 31, 2021, which will be filed later this month for additional information. Any forward-looking statements provided during this call, including projections for future performance, are based on management's expectations as of today. Minerva undertakes no obligation to update these statements to reflect events that occur or circumstances that exist after today, except as required by applicable law. Minerva's press release of fourth quarter and full year 2021 results is available on Minerva's website, www.minervasurgical.com, under the investor section and includes additional details about Minerva's financial results. Minerva's website also has the latest SEC filings, which you're encouraged to review. A recording of today's call will be available on Minerva's website by 5 p.m. Pacific time today. With that, I will hand the call over to Dave.

Thank you, Caroline, and thanks to all of you for joining us on our first earnings call as a public company. Since many of you are new to our story, I'd like to begin with a brief overview of our company before we move into our recent updates and plans for the future. Minerva Surgical is one of the few medical device companies that is solely focused on women's uterine health. The indication for our current product line of four products is the treatment of abnormal uterine bleeding, or AUB. Abnormal uterine bleeding is caused by either a dysfunctional lining of the uterus called the endometrium or by uterine tissue structures called fibroids and polyps. we now have a complete product line for either the ablation of the endometrium or the resection of fibroids and polyps. AUB, according to the American College of Obstetrics and Gynecology, affects one in three women. This equates to 18 million women in the U.S. between 25 and 50 years old. And sadly, AUB is the leading cause of hysterectomies. Next to C-sections, hysterectomy is the highest volume women's surgical procedure with approximately 500,000 hysterectomies performed in the U.S. every year. Hysterectomy is a major surgery that in most cases requires general anesthesia, a multiple night stay in the hospital, a four to six week recovery time, and a mortality rate directly attributed to the surgery of up to 1.5 patients per 1,000 hysterectomies. Minerva Surgical was founded in 2008 with the mission to eliminate the unnecessary hysterectomies performed for abnormal uterine bleeding. Our flagship product, the Minerva Endometrial Ablation product, received FDA premarket approval, or PMA, in July 2015 and is indicated for women with abnormal uterine bleeding for whom childbearing is complete. The Minerva product ablates the endometrium, the lining of the uterine cavity, to significantly reduce or eliminate heavy menstrual bleeding. In our clinical study for FDA approval, the FDA determined that the Minerva treatment yielded statistically significant greater efficacy than the Objective Performance Criteria Group, or OPC, to which Minerva was compared for approval. This OPC group was comprised of the FDA clinical study data from the five previously FDA approved endometrial ablation products at the time, including our leading competitor's market leading product. In that trial, the Minerva treatment was successful in reducing bleeding at the one year follow up to a normal or less level in 93% of the patients and totally eliminated bleeding in 72% of patients. This very favorably compares to our competitor's treatment success rate of just 77.7% and its total bleeding elimination rate of just 36%. Plus, through three years of follow-up, less than 1% of the Minerva-treated patients had a hysterectomy. This compares with a 6.8% hysterectomy rate in our competitor product clinical study for FDA approval. Prior to May 2020, the Minerva Endometrial Ablation product was the only product that we had to sell. In May 2020, we acquired three additional products from Boston Scientific to expand our product offering in uterine health. The most sought-after product acquired was the Symphion tissue resection product for removing uterine fibroids and polyps. This is the only product on the market today that both cuts and coagulates uterine tissue with the same device to reduce bleeding. And it is the only product on the market today that eliminates the possibility of dangerous patient fluid overload occurring during the procedure. we believe we now have the best products available for both endometrial ablation and uterine tissue resection. Similar to other companies selling medical devices used in elective surgery, COVID has had a significant impact on operations over the past two years and will likely be one of the biggest variables affecting our success in the short term. And the situation is changing every month. Overall, the business environment is reported to be improving, but we are still far from being back to a normal pre-COVID environment. A leading gynecology society, the AAGL, recently reported that January was very negatively affected by the Omicron variant, but things appear to be picking back up. Our daily sales averages are increasing, so we are cautiously optimistic that our growth will respond accordingly. In spite of the challenging macro environment due to COVID, I'm proud to tell you that in 2021, we treated over 40,000 women and over 12,000 in Q4 alone. In addition, we added over 250 new accounts in 2021, that ordered the Minerva endometrial ablation device or the Symphion tissue resection device for the very first time. And we saw positive results with our cross-selling strategy in 2021, as we were able to sell Symphion into 120 established Minerva accounts. Let's turn now to some other performance updates for the fourth quarter. We logged revenues of over $52 million for 2021, with $13.6 million in Q4, and saw double-digit annual growth versus 2020 in both the Minerva Endometrial Ablation and Symphion product lines. As a single-product company, prior to the acquisition of the additional products from Boston Scientific in mid-2020, the absence of account contracts has been a rate-limiting step in our ability to go after many hospitals. In short, we were locked out of doing business with many hospitals who choose not to do business with a single product company. Now, with the full and complete product lineup, hospitals are expressing interest to enter into contracts with us. In fact, in 2021, we signed contracts with three group purchasing organizations, or GPOs, and 18 independent delivery networks, or IDNs, that represent over 500 new accounts under contract for us. We will continue pursuing our national accounts contract strategy as only 37% of our current business is under contract. With our full product line, we are seeing some solid early success with cross-selling, the Symphion tissue resection product into our existing Minerva accounts. While Minerva is sold on superior clinical outcome data and efficacy to all currently marketed products, Symphion is sold on readily observable features and benefits in the surgeon's hands. With regard to expanding our sales force, we are closing in on our target of 80 field sales representatives. We feel that 80 is the right size for now, but this may change mid-year. It takes a new representative between three to six months to get up to speed and become productive, so we'll be monitoring sales rep productivity and expanding where appropriate. We are also very excited to report that this month we will be holding our first in-person national sales meeting in over two years. We're looking forward to getting the team together so we're all on the same page as we come out of COVID. As many of you may know, we are test marketing a direct-to-consumer, or DTC, marketing initiative to build awareness of AUB and our products. This is a pilot, and we expect results to build over the coming 12 months. Educating patients on their AUB treatment options and the advantages of Minerva treatments versus others is very compelling. Our goal is to respond to the over 36,000 U.S. Internet searches per month that utilize AUB symptom keywords. The results to date are encouraging as reflected in the significant increase in Minerva website traffic that we are seeing. For example, in January 2022, we had over 6,000 website visitors compared to 1,000 just a year ago. Of those 6,000 visitors this January, over 5,000 were new first-time visitors to our aubandme.com and minervasurgical.com websites. While we are still seeing the effects of the pandemic, and the impact on our procedures, we are not sitting on our hands waiting for COVID to subside. Instead, we are keenly focused on building the foundation for new business by executing across our key initiatives as follows. Expanding our sales and marketing team. Signing complete product line contracts with GPOs and IDNs. Increasing our installed base of controllers in both new and existing accounts, driving disposable sales growth in both established accounts, and continuing our DTC marketing pilot to increase overall awareness of our less invasive procedures versus hysterectomies. I'll finish up by thanking our investors who supported us at our October IPO. We're excited to deploy the net IPO proceeds of approximately $67 million for market share growth and market expansion by bringing our products to more patients and driving top-line revenue. In a nutshell, we are very excited about our future, and we appreciate your support. With that, I'll hand things over to Joel Young for the financial results. Joel?

Thanks, Dave, and good afternoon, everyone. Total revenue for the fourth quarter of 2021 was $13.6 million, up nominally from the fourth quarter of 2020. For the full year, total revenue was $52.1 million, an increase of 38 percent over 2020 reported revenue of $37.8 million, and 16.5 percent increase over 2020 pro forma revenue of $44.7 million, after adjusting for the Boston Scientific product acquisition in May 2020. At the product level for the year in 2021, Minerva ES was 24.4 million or 47 percent of total revenue versus 20.9 million or 55 percent of total revenue in 2020. Genesis HTA was 16.4 million or 32 percent of total revenue in 2021 versus 10.7 million, or 29 percent of total revenue in 2020, and Cynthion was 10.7 million, or 21 percent of total revenue in 2021, versus 5.8 million, or 15 percent of total revenue in 2020. Gross margin for the fourth quarter of 2021 was 57.3 percent versus 60.4 percent in Q4 2020, And for the full year, gross margin was 58.6 percent versus 50.6 percent in the full year 2020. The gross margin in Q4 2020 was positively impacted by some inventory revaluations following the integration of the Boston Scientific Assets that increased that baseline margin above ordinary levels. The gross margin in Q4 and full year 2021 was reduced by an increase in Symfion and Minerva ES controllers that were placed with customers during the year, where the company recognizes depreciation expense over three years that will be offset by the future sale of single-use handsets over the life of the instrument as customer use increases. We expect gross margin improvements in the coming years through increased utilization of controllers placed with customers, fixed costs being spread over a projected increased volume of single-use handsets sold, as well as cost reduction initiatives being pursued with contract manufacturers. Total operating expenses in the fourth quarter of 2021 were $14.5 million versus $10.3 million in Q4 2020. We have increased our sales and marketing expenses due to the expansion of the sales force and increased spending in physician and patient outreach and increased general and administrative expenses primarily due to preparing for and now operating as a public company. Non-cash depreciation and amortization expenses included in operating expenses were approximately 2.1 million in the fourth quarter of 2021. For the full year 2021, Total operating expenses were $59.7 million versus $34.5 million in 2020. Full-year non-cash depreciation and amortization expense within operating expenses was $8.3 million in 2021 versus $5.2 million in 2020, primarily driven by the increased amortization of intangible assets acquired with the Boston Scientific Asset Acquisition in May 2020. Non-cash stock-based compensation costs included in total operating expenses were $6.5 million in 2021 versus $0.7 million in 2020. Reported net profit for the quarter of 2021 was $10.8 million versus a loss of $6.4 million in Q4 2020. This profit versus the prior year loss was primarily a result of the one-time extinguishment of derivative liabilities in Q4 2021 with the conversion of debt to equity as part of our recently completed IPO and embedded derivative liabilities that were reversed following the refinancing of our previous third-party debts. For the full year 2021, our reported net loss was $21.5 million versus a loss of $18.3 million in 2020. On a non-GAAP adjusted EBITDA basis, we reported a net loss of $3.2 million for Q4 2021 versus an adjusted EBITDA profit of $0.5 million in Q4 2020. For the full year 2021, Our adjusted EBITDA loss was $11.3 million versus an adjusted EBITDA loss of $7.6 million in 2020. As a reminder, we have a number of non-cash expenses related to the amortization of intangibles from the May 2020 acquisition of the Genesis HTA, Symphion, and resector assets. and in the fourth quarter of 2021, significant income from the reversal of previous liabilities related to the embedded derivatives in the convertible preferred notes that were converted to common stock with our recent IPO and the embedded derivatives in the prior long-term debt that was refinanced in the fourth quarter. From a balance sheet perspective, We finished the year with $40.6 million in unrestricted cash after receiving $67 million in cash from our IPO in October and paying $25 million to Boston Scientific for the $15 million deferred purchase payment and $10 million development milestone payment due to them for the product acquisition back in May 2020. Our long-term liabilities have been substantially restructured following the IPO, and refinancing of our previous long-term debt facility. Our new $40 million debt liability was finalized in October of last year with a large commercial bank. The new term debt has a five-year final maturity with two years of interest only, followed by three years of straight-line amortization beginning in October of 2023. We believe our current cash position will last us well into 2023 depending on when our customers return to more ordinary operations post-COVID and on how quickly we can grow revenue. As such, we do not expect to have the need to raise additional capital within the next 12 to 18 months. In terms of guidance for this year, we see We still see a significant amount of disruption from COVID to our hospital and ambulatory surgical center-based outpatient surgery procedures. That being said, we expect revenue growth to be focused primarily in the second half of this year, with total revenue for the year expected between $60 and $63 million. With that, I'll say thank you for listening to our quarterly and full year update and turn the call back to the operator for Q&A.

And thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by, we compile the Q&A roster. And our first question is going to come from Robbie Marcus from JP Morgan. Your line is now open.

Hi, this is actually Lily. I'm for Robbie. Thanks for taking the question. I was hoping you could just dive a bit deeper into what you've been seeing on near-term COVID trends. How have things trended into the first quarter of 2022, and what are you assuming in guidance in terms of the recovery?

Hi, Lily. This is Dave. With regard to COVID, we're kind of the same place we were last year in 2021 when everybody thought COVID was, you know, going away, and we had a big February, a big March, and then the Delta variant hit. And then this last fall, we had, you know, big, you know, I don't want to call it big, but a good October, November, December. And fourth quarter is always big in this elective surgery because most women's co-case and deductibles are paid up, so they like to have their procedures done at the end of the year as opposed to waiting until right after the first of the year. So we always have a big... Q4, and then a small Q1. But I think I'd be less than honest if I said that this Omicron variant wasn't still affecting activity in the operating room. I think patients are willing to come back now, is our sense, but staffing levels in the hospitals are so problematic that they can't handle the the patient flow. So we're still seeing, and here we are in the first week of March, we're still seeing a significant, you know, interruption in surgery schedules because of COVID. And let's, let's hope that as we did last year, we kind of broke out last March. Let's hope that it happens again this year.

Okay, that's helpful. Just a quick follow-up. Can you walk us through how you're thinking about expenses progressing over the year, especially as DTC advertising becomes a bigger part of the story now that you've launched the website? Thanks so much.

Okay, Joel?

Yeah, I think expenses in Q4 were up from what they have been historically, and part of that is just cost of of being a public company, and part of that is some of the growth that we're starting to experience in sales and marketing. I think sales and marketing expenses will grow, I would say, nominally throughout the year. I mean, the DTC efforts and some of the marketing outreach is still in some of the test marketing phase, so we're not going to substantially ramp that up. But we will experience a little bit more expenses throughout the year as we get the sales team up to the full complement that Dave had referred to in his prepared remarks and just the ongoing cost of operating as a public company. So nominal growth in overall operating expenses throughout the rest of the year.

Great. Thanks so much.

Thanks, Lillian. Thank you. And our next question comes from Matt O'Brien from Piper Sandler. Your line is now open.

Good afternoon, guys. This is Jeron from Ed, and thank you for taking the question. I just want to follow up quick on the guy's question. You know, just with your comments regarding the pressure you're seeing in Q1, I mean, to put it simply, I mean, is it fair to think that Q1 is probably still down a bit on a year-over-year basis, and then I guess second to that, just thinking about how you're discussing the recovery in the second half, you know, how should we view the growth rate in fiscal 2022, the high teens growth here in the context of the longer-term growth of the business? I mean, is it fair to think it could accelerate from the levels you've seen this year, just given the disruption in the first half?

So, yeah, we think the disruption will definitely show up in Q1. Hopefully it's diminished in Q2, and we're planning on having a really big second half of the year. Let's hope there isn't another variant out there. But, yeah, we're planning on having a big second half of the year. And I know, Matt, you know this, but some of the other people on the call may not. We're really trying to do everything we can to build the foundation here for rapid growth as COVID recedes. you know, by expanding our sales force, piloting our direct-to-consumer awareness program, signing contracts with national accounts and independent delivery networks. We've been very successful in doing that over the last 12 months and so on. So you don't see the benefit of doing these things immediately because of COVID, but, you know, we're trying to get all these colon foundation blocks in place. So once COVID goes away, we're ready, you know, really ready to run, but yeah, big, uh, just to summarize, you know, COVID affected, uh, certainly first quarter, probably to a lesser degree in second quarter. And that hopefully, you know, we hit a mid summer and we're ready to roll. And we, we, we finished with a super big, uh, second half. Joel, do you want to add anything?

No, I think that's, um, I think that's the right way to think about it. Um, this Omicron variant seems to be going away, and we'll keep our fingers crossed that, in fact, that's the case. We're seeing a lot of markets start to open up again. We see, you know, the mask mandates are releasing in many parts of the country, and so we'll hope that staffing levels in the hospital follow shortly thereafter, and I think it is really the staffing levels in the hospital and just the confidence that patients have in getting back out and taking care of some of the procedures and things that were deferred throughout the COVID experience.

Okay. Very helpful. Thank you for that. And then I just wanted to follow up on your comments on DTC because those definitely caught my attention. You know, what does the funnel look like once you get those potential patients to the website? What do you have to do? What do they have to do to get to a physician who could utilize your products? And how do you intend to evaluate the success of that campaign?

So the whole idea is to direct patients to our AUB&V website so that they can increase their knowledge of their conditions. And as a result of that, you know, we'll be measuring what the digital marketing people call click-throughs. So not just how many people visited your website, but how long were they on there, how many pages did they go to. And then ultimately, were they interested in finding out which positions in their zip code or adjoining zip codes were doing the, you know, Minerva procedures. So ultimately, that's how these things get measured. Anybody that operates in the digital marketing area will tell you it's not unlike other types of advertising where it's really difficult to draw a direct correlation between someone who visits your website to getting a treatment, particularly when we're not allowed to collect any patient information identifying information, which, you know, that's the right thing to do, and it's very reasonable that companies are not allowed to do that. Unlike if you go to Home Depot or Walmart or, you know, some other Amazon where you give them everything, and an hour later you see all the pop-up ads for the last search that you did. You can't do that in the medical business. So it's a little harder to track, but we think that it'll show up, In sales, we think, too, that we'll get feedback from the users of our endometrial ablation and tissue resection products when they say that, you know, hey, we have patients calling the office saying that they were directed to us by your website. So thank you, and, you know, keep them coming. So that's what we're hoping for. And, you know, so far, the website... the increase in the website traffic is pretty phenomenal. But as I mentioned in the overview of the earnings, the companies that we've contracted with to help us in this effort, the first thing they did is they went out and searched to find out how many keyword searches were done for kind of the key symptom words for abnormal uterine bleeding. And we were surprised that, you know, the average monthly number of searches in the U.S. alone is 36,000 a month. So that gets us excited. So we want to pursue this. We think, you know, Matt, you know, we hired a digital, experienced digital marketing manager from another less invasive surgery company at the end of the year. and she's up and running and has hired an advertising firm, a digital marketing agency, and also a digital media buying company to make sure that we're putting our dollars in what will hopefully be the most effective areas.

Got it. Thank you.

Thank you. And our next question comes from Matt Taylor from UBS. Your line is now open.

Hey, thanks for taking the question, guys. I have a couple little ones. So the first one was, I know you gave the percentage of sales for the different categories. I was wondering, are you going to give any information about units and ASPs going forward, and could you provide any color there in the quarter?

Yeah, as much as we'd like to, we're hesitant to give out average selling prices because you know who benefits from that, our competitors. And as far as units sold, that really falls into the same category because when you're a small company like us that really has, you know, we have three product lines make up 99% of our sales, When we report those, if we reported unit sales, our competitors could quickly do the division and to determine what those ASPs were. So our goal is to sell our products at an ASP that's equal to or higher than our competitors. Thus far, we've been able to do that because we have the data on our endometrial ablation product to show that it is equivalent or better to anything else that's out on the marketplace in terms of FDA-approved products. And then on the tissue resection side of things, because that was a 510K product, there isn't any outcome data on it. But when we have doctors evaluate it, we simply ask them to pay attention to how well this cuts. This cuts with a plasma cutting mechanism. So you'll never end up with a dull blade, or you won't break a blade like you do with the product you're using now when you're cutting a calcified fibroid. Two, pay attention to how much less bleeding there is, because this device not only cuts, but it also coagulates the surface area of the tissue that's left behind, so you see less bleeding. And then third, ask the nurses what they think about this product when they don't have to continually during the case keep... calculating how much fluid and travisation has there been into the patient, which is a very serious safety problem whenever you're doing intrauterine surgery. The patient's vascular system takes on a lot of the distension fluid that you're using to, in effect, blow up the uterus so you can do the surgery. because you're actually operating underwater, if you will, under saline. And the high-pressure saline ends up going into the, wherever you cut into arteries and veins, into the patient's vascular system. And there are many procedures where over two liters of fluid contravasate into that patient's system. And when you get to that high, you're getting to, the, uh, the danger level with the patients. Patients have died from the fluid and traversation. So it's something not to take lightly. So we tell doctors, look at, look for those things when you're doing the case because they're readily observable. And, uh, every time the doctor does a case, you can see these things. So we think that bodes well for, and that, uh, you know, when doctors can readily appreciate the features and benefits of the products.

Okay, cool. I understand. Uh, and thanks for the, uh, explanation on the differentiation. I wanted to ask a follow-up on the disclosures you made today about the 285 new hospitals and expanding coverage in 500. How material is that? And maybe just talk about the composition of those new customers. Are they generally low, medium, high volume? Are they really additive to your base? And I guess as you look through 2022 to the future, does this give you potential for material upside in the out years?

Well, I know that, Matt, I know you're a spreadsheet guy. So let's just do some quick math. If you had 285 accounts that had never in the past bought either a Minerva endometrial ablation product or a tissue resection product, and those 285 accounts perform one endometrial ablation per month and one tissue resection product per month, they'll spend about $2,500 per month. Multiply that $2,500 times 285. In just those accounts, doing one tissue resection per month and one endometrial ablation per month generate $8 million in annual revenue for the company. And you know, we don't go after accounts that are doing one procedure a month, right? So, um, many of these accounts are much, much bigger than that. So 285 counts is a count. New accounts is a lot and should have a really positive impact on our, on our revenue going forward. Unfortunately with COVID, you know, we won't see the benefit of that. Um, Until, you know, until COVID goes away and, you know, the pent-up demand for these procedures from patients that have put them off or canceled them, you know, all comes back. So, again, we're building the foundation for that rapid growth when COVID goes away. But, yeah, 285 accounts times 2,500 a month. And turn that around and say, gee, what if they did, you know, 10,000 a month? You're talking big dollars. So we're excited about the fact that our sales reps have done such a good job in that respect. And once we get out of COVID, we'll know, and so will you, what kind of financial impact that has.

Great. Thank you. I really appreciate a numerical answer. You're bringing tears to my eyes. I am a spreadsheet guy. The last one I want to ask you is just, I know you talked about – you know, more growth in the second half. Are you willing to say, I guess, whether you think you can grow in Q1 or Q2 or just characterize that a little bit more? That's a tough one.

I have a history. I have a bad history on COVID, Matt. I mean, last March, before the Delta variant popped up, we did over $5 million in sales in that month. And that's when, you know, COVID was going away and then the Delta variant hit. So, you know, we want to get back to that kind of that level and, and bigger as soon as possible, but it's, it's really all about COVID. We've, we've been to that level before, but then, uh, you know, Delta hit and then Omicron hit. So, you know, we want to get back to that as soon as possible. So I think, you know, as you know, um, from covering the company, uh, You know, the first quarter in this elective surgery business is always the down quarter for the year, particularly when compared to Q4. So, you know, historically Q1 compared to Q4 over the last five years has been down 22%. So quarterly revenue has historically been down 22%. compared to Q4. So, you know, we'll just have to wait and see how things go this year. You know, January and February are always down months, and then March, historically, has kind of come roaring back. So we're waiting to see if that happens again this year. So, yeah, we're counting on a big second half.

Okay, very good. I'll leave it there. Thank you for your feedback.

Okay, thank you, Matt.

Thank you. If you have a question, that is star one. Again, if you'd like to ask a question, that is star one. And our next question comes from Danielle from SVB Lyric. Your line is now open.

Hi, guys. This is Priya on for Danielle. Thanks for taking the question, and congrats on a solid quarter. I think the first one here is maybe a little bit on this quarter's performance. And if you could discuss where the bulk of growth came from. So, is it more so share gains versus market expansionary? And if you saw any kind of cross-selling dynamics within the quarter.

Yeah, the, most of the big accounts that we're picking up in the revenue gains are coming from our cross-selling efforts. And for those of you that aren't familiar with how we define cross-selling, is when we acquired the product lines from Boston Scientific in May of 2020, right in the heat of the first round of COVID, we wanted to take those products into the loyal Minerva Endometrial Ablation accounts where our reps are already well thought of, have access, are in the operating room with doctors all the time. So we want to take those newly acquired products into those accounts, figuring that was our path of least resistance and we could get the fastest uptake there. And that's really proven to be true. So many of these new accounts that we're picking up are what we call cross-sold or accounts where we've gone in and done the cross-selling. And that strategy is really working well for us. What we're also finding is that many hospitals have been looking for alternatives to their status quo purchasing arrangements that they've had over the years. And our efforts in the area of signing up under contract new accounts has really worked well for us too. And these are accounts where we go in where we have not had business before and say, hey, how would you like to try the, you know, latest and greatest endometrial ablation and tissue resection products at once. And we use the example when a patient comes in to you and complains about her heavy menstrual bleeding, that in most cases it's either because of a dysfunctional endometrium, and in that case you'll want to do an endometrial ablation. In the case where there's structural causes, fibroids or polyps, you'll want to do a tissue resection. We have what we believe to be the best products in both of those categories now. So if you're interested, let's do a Minerva evaluation. And whether that patient needs an endometrial ablation or a tissue resection, we've got the products, and I'm on standby to come in and help you and the nurses do your first few cases. And after we do a few of each, you won't need me anymore because both of these systems are very user-friendly. But let's get going. And we're surprised at what kind of reception we're getting to that. Part of it is that the hospital is like competition. So now that there's another player now with a full or complete line, the neurosurgical, in many accounts we're really being welcomed with open arms. So that's encouraging too. And, again, the positive side of that is being very much dampened by COVID, by Omicron. But once that starts to go away, I think that we're optimistic we're going to show some really good growth. Does that help?

That was super helpful. Thanks. And then maybe another one, and kind of a piggyback on Matt's last question on the new centers and access to new centers. What kind of initiatives are in place from a sales force level to kind of hit the ground running and And I appreciate that COVID's kind of created a little bit of a cloud from an access perspective, but as that starts to kind of wane, how quickly can we start to see a benefit from these new centers? And thanks for the question.

Yeah, so the key thing for us is to increase our sales and marketing footprint. So we've gone from just a year ago having 64, 65 people in our sales and marketing group. And now we're up to over 100. So for us, it's all about coverage. And we at one point had a salesperson in virtually every major metropolitan area in the country But now we're to the point where we can have two or three representatives in Atlanta, two or three reps in St. Louis, two or three reps in the state of Ohio, two or three reps in Chicago, et cetera, et cetera, where we're actually doubling up now. And so for us, that's one of the keys. Every doctor that agrees to evaluate the Minerva tissue resection or endometrial ablation product not only has to be trained on a desktop, but it's also very beneficial to have our sales representatives actually in the operating room, which is standard procedure in the medical device industry, but to have our reps in the operating room with them for their first two, three, four cases to make sure that everything between the nurses and the setup of the equipment and physicians doing the procedures is well coordinated and everything goes fine. So yeah, having a feed on the street is a key part of our initiative. And then to compound that with getting contracts signed, you know, the hospital business isn't a business where doctors get exactly what they want all the time, regardless of price anymore. So now it's a contracted business and only 37% of the NERVA business is under contract versus some of our competitors where I'm sure that their portion of their business that's under contract is over 90%. So we're growing in that area. We hired a director of national accounts a year or so ago, and we're staffing up in that area also so that we can get contracts with these hospitals. Now, some of these contracts are, hunting licenses, if you will, because if you don't have a contract, you can't get into the facility. Others are actually committed contracts where we sign a contract and for an attractive discount on products, the hospitals actually make a volume commitment to the company where they will say that they will commit 70%, 80%, 90% of their volume for endometrial ablation and tissue resection products to the company and as part of that contract. And there are quarterly meetings where those numbers are actually verified. So we're starting to sign those too. So again, Omicron has really dampened the ramp up of the benefits that we see from these. But as COVID recedes, again, we think we'll be in a really good position to watch sales take off.

Super helpful. Thanks, guys.

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