Vericel Corporation

Ladies and gentlemen, thank you for standing by. Welcome to Barrisville's fourth quarter 2022 conference. At this time, all participants are going to listen only. I would also like to remind you that this call is being recorded for replay. After the speaker's presentation, there will be a question. As you ask your question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message that your hand is raised. Draw your question and press star 1-1 again. I will now turn the conference over to Eric Burns. Varicell's Head of Financial Planning and Analysis and Investor Relations.

Thank you, Operator, and good morning, everyone. Welcome to Varicell's fourth quarter 2022 conference call to discuss our financial results and business highlights. Before we begin, let me remind you on today's call, we will be making forward-looking statements covered under the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our findings at the SEC, which are available on our website. In addition, all four looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Please note that a copy of our fourth quarter financial results press release is available in the investor relations section of our website. We also have a short presentation with highlights from today's call that can be viewed directly on the webcast or accessed on our website. I'm joined on this call by Xerisol's President and Chief Executive Officer, Nick Colangelo, and our Chief Alliance Officer, Joe Morrow. I will now turn the call over to Nick.

Thank you, Eric, and good morning, everyone. I'll begin today's call by discussing financial and business highlights for the fourth quarter and full year 2022, current trends for Macy, which have been very positive to start the year, our next hybrid commercial launch activities, and our overall outlook for 2023, a year in which we expect total revenue growth to accelerate and continued strong profitability for the company. Joe will then provide a more detailed update on our financial performance in 2022 and financial guidance for 2023 before opening the call to Q&A. The company delivered strong financial and business results to close the year as we generated record quarterly revenue, delivered our 10th straight quarter of profitability and positive operating cash flow, and achieved significant development milestones, including an accelerated regulatory pathway for the arthroscopic Macy program and FDA approval of Nexibrid, which we believe will enable the company to build a second high-growth commercial franchise. For the full year, total revenue was more than $164 million, with Macy revenue growing 18% to $132 million, We continued to deliver strong profitability and cash flow as we generated nearly $25 million of adjusted EBITDA and $18 million of operating cash flow, ending the year with $140 million in cash and investments and no debt. We also generated record total revenue of nearly $53 million in the fourth quarter, as well as gross margin of 73% and adjusted EBITDA margin of nearly 30%, Both of which increased versus the prior year and approximately 6M dollars in net income for the quarter, which increased more than 30% compared to 2021. Our strong 4th quarter results were driven by record quarterly Macy revenue of over 46M dollars, which came in at the high end of our guidance range represented 24% growth over the 4th quarter of 2021. and approximately 50% sequential growth over the third quarter of 2022. This strong revenue growth was driven by strengthening key growth drivers for Macy. Surgeon adoption continued to grow as we finished the year with approximately 2,000 surgeons taking biopsies in 2022, an increase of approximately 10% from 2021. We also had continued growth in Macy biopsies in the fourth quarter and stabilization in the biopsy conversion rate to close out the year. As I'll discuss in a moment, the positive trends that we saw in the fourth quarter have continued into the first quarter as the operating environment continues to improve. With respect to EpiCell, fourth quarter and full year revenue was lower than anticipated as the incidence of large burns greater than 30% of total body surface area declined to pre-2021 levels. Notwithstanding this dynamic, we continued to see broad burn center engagement as we had a record number of burn centers taking biopsies in the fourth quarter and the full year, and a similar number of burn centers grafting patients during the year. While the breadth of customer engagement generated solid epithelial biopsy activity. The proportion of biopsy patients going on to surgery was lower in 2022, and particularly in the fourth quarter, due mainly to patient health-related issues. We also had fewer epithelial grafts per patient in 2022, which had grown significantly in 2021. And there were some organizational changes at our largest customer, which impacted patient referral patterns, and had a significant impact on patient volume at that center. Despite these dynamics, which led to the variability we often see with EpiCell, we believe that our strong engagement with leading burn centers and our expanded customer base positions us very well to drive Nexabrid uptake upon launch. In addition to generating strong financial results in the fourth quarter, we also made significant progress advancing our pipeline. As we announced last month, Following our Type C meeting with the FDA in December, we're planning to initiate a human factors validation study this year to support expanding the MACEY label to include arthroscopic delivery of MACEY for the treatment of cartilage defects in the knee. We now anticipate a potential launch of arthroscopic MACEY in 2024, which is several years earlier than if an additional clinical study was required. We believe that the arthroscopic delivery of MACE will be a very attractive option for patients and surgeons and could provide a substantial upside growth opportunity for MACE. Based on our initial market research, approximately 90% of respondents expressed interest in an arthroscopic delivery option for MACE, which provides an opportunity for additional surgeon adoption, given that a portion of the more than 10,000 surgeons that perform cartilage repair procedures in the U.S. each year either primarily or exclusively perform arthroscopic procedures and could now consider MACI as an option for their patients. Arthroscopic MACI also offers the potential for increased utilization among current MACI users, as approximately 90% of current users indicated that they would expect to increase MACI procedure volume if an arthroscopic option was available. To that end, the arthroscopic MACE instrument kit is designed to treat the most common defects in the MACE patient addressable market, which are two to four square centimeter defects on the femoral condyles. And MACE would be the only arthroscopically administered restorative cartilage repair product to treat these defects, which we believe would allow us to achieve a greater share of those procedures. We're also in discussions with the FDA regarding our planned Macy clinical development program for the treatment of cartilage injuries in the ankle, which is the next largest market opportunity for Macy. We believe that a potential ankle indication with an estimated $1 billion addressable market could be a significant growth driver for Macy over the long term. Turning to our burn care franchise, The FDA approval of Nexibrid was a significant milestone for the company, and our commercial launch activities are progressing well. We've seen widespread interest and enthusiasm from burn surgeons and other healthcare providers for Nexibrid, and we're on track to meet or exceed our internal goals regarding burn center engagement ahead of commercial product availability, which is expected in the second quarter of this year. The hiring of our Nexibrid sales team is nearly complete, and training for burn surgeons began last month following approval. There are a number of high-profile burn conferences in the first part of the year, including the American Burn Association annual meeting, where we'll have a significant presence to support the launch of Nexibrid, and where Nexibrid training conducted by leading burn surgeons will be included in pre-conference peer-to-peer educational sessions regarding the science of wound preparation and the science of wound closure. Given that Nexibrid will be dispensed through hospital pharmacies, Gaining P&T committee approval for the use of Nexibrid in our largest or in our target burn centers is a high priority activity during the early launch phase. Based on the widespread interest in Nexibrid, we have surgeon champions at dozens of our target burn centers who will lead the process to gain P&T committee approval at their respective institutions. This process can take up to a few months, which should sync up well with the timing for Nexibrid commercial product availability in the second quarter. Looking at the overall burn care franchise, the approval of Nexabrid in the U.S. significantly increases the addressable market for a burn care franchise to over half a billion dollars. While we expect that EpiCell will return to growth over the coming years, we believe that Nexabrid will provide a more consistent and predictable revenue stream and help offset much of the EpiCell revenue volatility. In addition, The incremental investment required for Nexabrid is relatively limited given our existing burn care commercial infrastructure and the overlap with EpiCell, which should also benefit from a larger commercial footprint and higher share of voice in the market. Finally, turning to guidance for 2023, we expect total revenue for the year to increase to approximately $100 to $188 million and to generate continued strong profitability and operating cash flow. Joe will provide further details in a moment, but I wanted to touch on some of the key elements of our guidance, as well as the current operating environment for Macy to start the year. As we announced this morning, we expect Macy revenue to be in the range of $152 to $156 million for the year. The underlying framework for our initial Macy's guidance is that full-year revenue growth will be driven by continued growth in biopsy surgeons and higher net price per implant. At this point, our guidance for the year does not assume any sustained increase in other Macy-Keege growth drivers of biopsies per surgeon or the biopsy conversion rate compared to 2022 levels, which would represent upside growth potential as we start the year. That being said, we're very encouraged not only by the strong fourth quarter for Macy, but also by a strong start of the year. with positive trends that we saw in the fourth quarter continuing into the first quarter and the overall operating environment continuing to improve. At this point, we expect Macy growth for the first quarter to be approximately 20% versus last year, which would represent the third straight quarter of 20-plus percent year-over-year growth as Macy resumes its high growth profile. More broadly, we believe that Macy is very well positioned for another strong year of growth in 2023, and we expect that the launch of arthroscopic Macy in 2024 will drive even broader surgery adoption and further growth acceleration next year. Importantly, based on our 2023 full-year guidance, our sales rep productivity will meet or surpass our historical high of $2 million per rep achieved prior to our last sales force expansion in 2020. And we would expect to begin to significantly exceed that level in 2024 and beyond. With respect to the burn care franchise, we expect total burn care revenue of $28 to $32 million, with growth versus our fourth quarter annualized run rate for EpiCell of $24 million, driven primarily by the launch of Nexibrid. We believe that the launch of Nexibrid, which has the potential to become the standard of care in eschar removal and take a very meaningful share of its $300 million addressable market in the U.S., will enable the company to build a second high-growth franchise in the burn care market. I'll now turn the call over to Joe to discuss our fourth quarter and full year financial results, as well as our financial guidance for 2023.

Thanks, Nick, and good morning, everyone. Starting with the income statement, total net revenue for the full year was $164.4 million, driven by strong Macy results in the fourth quarter. Total company revenue in the fourth quarter was $52.7 million. Macy revenue of $132 million for the full year was at the high end of our guidance range, growing 18% versus the prior year. For Q4, Macy revenue was $46.3 million and grew 24% versus the prior year and approximately 50% versus the third quarter, as we continued our momentum in the Macy business with two very strong quarters to close out the year. Macy growth in 2022 was driven by continued strong surgeon and biopsy growth, as well as a higher price, and importantly, the conversion rate for Macy's stabilized in the second half of the year. Total burn care revenue for the year was $32.4 million, consisting of $31.7 million of EpiCell revenue and $0.7 million of revenue related to the procurement of Nexubrid by BARDA for emergency response preparedness. EpiCell revenue in the fourth quarter was $6.3 million. Gross profit for the quarter was $38.2 million or 73% of net revenue, an increase compared to 72% for the fourth quarter 2021. For the full year, gross profit was approximately $110 million or 67% of gross revenue, which was in line with the prior year gross margin and higher than our full year guidance in the mid 60% range. Total operating expenses for the quarter were $32.2 million compared to $29.9 million for the same period in 2021. And for the full year, operating expenses were $126.8 million compared to $113.9 million last year. The increase in operating expenses in 2022 was primarily due to an increase in headcount and higher sales and marketing expenses. Net income for the quarter was $5.9 million, or 12 cents per share, compared to net income of $4.5 million, or $0.09 per share, for the fourth quarter of 2021, an increase of more than 30% versus the prior year. Non-GAAP adjusted EBITDA for the quarter was $14.9 million, or 28% of net revenue, an increase versus the 27% in 2021. And importantly, this represents our 10th consecutive quarter that we've generated positive adjusted EBITDA. For the full year, adjusted EBITDA was 24.2 million, similar to the 29.5 million we generated in 2021, despite lower EPICEL revenue. Companies now generated over 50 million of adjusted EBITDA over the last two years and over 90 million over the last four years. As we continue to grow our top line revenue, expand our pipeline, and position the company for multiple product launches while maintaining a very strong financial profile. Finally, we generated $7 million of operating cash flow in the quarter and $17.7 million for the full year. We ended the year with approximately $140 million in cash and investments and no debt. Transitioning to our financial guidance for 2023, we expect total revenue of $180 to $188 million for the full year. We expect Macy revenue to be in the range of 152 to 156 million, with growth in the mid to high teens percentage range for the full year. As Nick referenced, first quarter trends for Macy have been encouraging, driven by strength in both biopsies and implants, and we anticipate another strong quarter with growth of approximately 20% versus the first quarter of 2021. In terms of Macy's seasonality or mix of business by quarter, we would generally expect a similar percentage of full-year revenue by quarter as we saw in 2022. Moving to the Burn Care franchise, we expect full-year Burn Care revenue, which includes both EpiCell and NextBridge revenue, to be approximately $28 to $32 million. This full-year revenue range implies growth for the Burn Care franchise versus our commercial revenue run rate from Q4 of approximately $24 million. In terms of Nexabrid revenue and uptake during the year, assuming commercial product availability in the second quarter, we would anticipate some modest stocking revenue in Q2, with the vast majority of Nexabrid revenue occurring in the second half of the year. As Nick mentioned, we expect Nexabrid to take a significant share of the market over time. In the near term, we would also expect Nexabrid to be an important driver of our burn care growth this year with meaningful revenue during the second half of the year, although it is difficult to predict the exact uptake in quarterly cadence of revenue during its launch year. For EpiCell, quarterly revenues remain very difficult to predict due to the nature of the product and the volatility across quarters. Although for the first quarter, based on trends to date, we would anticipate revenue to be roughly in line with the fourth quarter run rate of approximately 6 million. Moving down to P&L, we expect an improvement in gross margin compared to 2022, with gross margin expected to be in the high 60% range, adjusted EBITDA in the mid-teens percentage range, and full-year operating expenses to be approximately 140 million. Finally, we would also anticipate an increase in capital investment for the build out of our new state of the art cell therapy manufacturing facility and corporate headquarters as the project continues to move forward with our share of construction costs in the 30 to 40 million range for 2023. In total, this guidance points to accelerating company revenue growth in 2023 and continued strong profitability for the full year. In addition, we would also anticipate further acceleration of our total company revenue growth in 2024 with a full year of next year on the market and the anticipated launch of arthroscopic Macy. This concludes our prepared remarks. We will now open the call to your questions.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first call comes from Ryan Zimmerman. Ryan, your line is open.

Thanks for taking the questions. Good morning, guys, and congrats on all the progress this year. I want to start with the episode a little bit just because, you know, the guidance is a little lower than I think we were expecting. And I understand, you know, it's volatile. Nexobrid's going to help offset that. But when you think about that run rate, that $24 million run rate, you know, do you feel like you've sufficiently set a floor for here to account for the variability given how unpredictable it is. And just help us understand kind of how you came to that 4 to 8 million on Nexobrit. You know, why is that right? Why is it not less? Why is it not more? Just, you know, would appreciate understanding your thought process and coming to that number.

Yeah, good morning, Ryan. Thanks for the question. This is Joe. I'll starting that one. So, you know, I think on EPCEL, so, you know, at first it's important to realize, you know, with EPCEL, from a run rate perspective to your question, you know, we're very mindful of kind of where the business is. So, you know, the Q4 revenue was roughly $6 million. You know, what we talked about in the prepared remarks as we move into Q1 is we would expect, you know, a similar revenue number, around $6 million, although to your point, it's always difficult to predict exactly what that looks like based on the small patient numbers, et cetera. So it obviously could be a bit different quarter to quarter. But, you know, we do feel like that run rate, you know, we saw that coming exiting last year. That's where we started this year. You know, as we think about the framework for guidance, maybe turning to that for a moment. So, you know, the way we're thinking about it is, you know, that 24 million is really the appropriate starting point for EpiCell. you know, basically that 6 million run rate per quarter. And, you know, certainly we will look to grow from there. You know, if you look in prior years, kind of pre-2021, we all said more significant growth. You typically saw, you know, growth in the kind of mid-single digit or low double digit range. So, you know, if you do the math there, you could get up to, you know, call it 25, 26 million, perhaps a bit more. You know, again, right now, to your question, we're on that 24 million run rate. So as we then think about the total guidance, you know, that's where, you know, Nexabrid is important as well. So, you know, we feel like the combination of the two products can get us into that, you know, $28 to $32 million range for the full year. And again, we want to be mindful of kind of where epithelial trends are right now as part of that. But, you know, what that points to, to your Nexabrid question is, you know, as we talked about in the prepared remarks, you know, we've certainly seen some strong indicators so far. We still expect commercial availability in the second quarter. And again, from a cadence perspective, you know, there'll be no revenue in the first quarter, you know, some modest stocking in the second quarter, and then really an increase as we get into Q3, Q4. So, you know, if you kind of think about the guidance framework, and again, we're not giving specific numbers by product, which is why we're talking about the franchise, but that does put you in kind of that mid single digit range, which, you know, based on, you know, kind of what we've seen to date, you know, I think kind of makes sense for, for, And, again, we think you can take a pretty meaningful share over the long term. So, you know, again, we're thinking about it from a franchise perspective. But when we think about where EpiCell is and the potential of Nexabraid, I think it's the appropriate range for this year. Okay.

Let me turn to Macy for a moment. And just one housekeeping question. Joe, did you say 20% growth off of first quarter 21? I thought I heard you say that, not first quarter 2022. Or was that just a mistake?

Yeah, so our first quarter of 2022, 20% year over year growth into one.

Okay. All right. Okay. Just want to check. And then, so, you know, as I think about the Macy business, I think your guidance is very clear about what's included in that business. What's that, you know, what could be upside. Do you, and your comments are a productivity are also helpful, Nick, but when you think about the arthroscopic delivery edition, do you feel like you need to upsize the Salesforce to capture that opportunity? Or is the Salesforce appropriately sized at, I think it was 76 last we checked, and just given a broader customer base, you know, why not upsize it if productivity is going to keep growing, implied by, you know, kind of your comments?

Yeah, Brian, thanks. This is Nick. So, number one, you're right. You know, we did increase our Salesforce from, you know, by about 50% from 49 to 76 territories. Back in 2020, and, you know, at that point, leading into that, our rep productivity was, you know, had gotten up to a couple million dollars a year. As you remember, it kind of grew even as we were expanding from a Salesforce size in the 20s, you know, up through 50. And we're kind of now back at that range, given the current Macy guidance. You know, I think what we'll end up doing, as we've mentioned before, around arthroscopic Macey is going back and refreshing sort of the targeting work that we did back in 2019, the health advances project. As we talked about at that time, we know there's a meaningful segment of those 10,000 plus surgeons that we had. both arthroscopic and open procedure data on that, you know, either exclusively or predominantly do arthroscopic procedures. So that may mean we add, you know, some number of new surgeons. And if that's large enough that it would justify increasing the sales force, that's certainly something we think about. So we'll be doing that work during this year ahead of the potential launch next year.

All right. Thank you, Beck and Kew.

Thank you very much. As a reminder, please press star 1-1 to ask a question and you'll be brought into the queue. Our next call comes from Sam Brodowski of KUA Securities. Sam, your line is open.

Hi, thanks for taking the question and congrats on the good quarter. I'll just start with one on MACIE in terms of, you know, and appreciate you providing the component of the guidance. In terms of things looking better to start the year, what would you need to see to start to incorporate either increasing conversion rates or an improving sort of patient census into the Macy guide?

Yeah, this is Joe. I'll take that one to start. So, you know, I think from a Macy perspective, again, you know, just to clarify Ryan's earlier comment, you know, what we talked about was, you know, You know, we've had a strong couple quarters to close out last year, kind of both above 20%, which, you know, certainly is a good sign. And I think as we look into the first quarter, you know, I think what we've really seen is strength in both biopsies, which really started in Q4 and then continued into Q1, as well as implants. So that's certainly, you know, an encouraging sign. And so, you know, our expectation in the first quarter is to be, you know, approximately 20%. I think actually around 31 million for the quarter. You know, as we think about the full year, you know, a couple of things to keep in mind there, you know, we do think about kind of that seasonality and mix by quarter. So that, you know, that kind of number in Q1 actually lines up again to, you know, roughly 20% of our full year. If you look at the midpoint, for example, it's basically 20% of that full year number. So that's certainly something, you know, we're mindful of, you know, and also say, you know, we've probably seen some early signals that, you know, perhaps conversion rate is taking up. But, you know, we generally measure that over longer periods of time. And I think, you know, what I would say is, you know, from our perspective, we want to see that over a longer period of time. You know, we think the foundation is there and the operating environment is improving. But we would want to see some of those additional growth drivers, which we think, you know, can still be growth drivers for the brand. But in terms of 2023, we'd want to see that over a longer period of time before, you know, we know whether that's, you know, the case for multiple quarters.

Thanks, that's helpful. And then just a quick one on Nexobrid, and thanks for providing the guide points there. Does guidance for this year contemplate any account outside of the existing EPICEL base, or does it just assume revenue coming from those accounts? Thanks.

Yeah, hey, Sam, this is Nick. No, you know, we obviously have... You know tiered the targets and you know the sales force is focused on. You know the as we talked about first thing you do, aside from sort of you know surgeon training and hiring the sales force training you deploying them. Really it's about you know the P amp T committee approval process, and so that is well underway, and that includes accounts that are episode users, but also. If you'll recall, you know, obviously there was the detective pivotal study at sites here in the U.S., the pediatric study, the ongoing Nexabrid, or the next expanded access protocol. So three different clinical studies where sites may have experience with Nexabrid. Often those are also epicenter centers, but sometimes they're not. So I would just say that All 140 target burn centers are in play for the year, and we would expect utilization to come from both current EPISO burn centers, but then next burn centers as well.

Great. Thanks for taking the questions.

Thanks. Thank you very much. Please remember to ask a question. Just press star 1-1 on your phone, and you'll be brought into the queue. Our next call comes from Jeffrey Cohen of Lindenburg. Jeff, are your lines open?

Hi, Nick and Joe. How are you? Good, Jeff.

Doing well. Good morning.

Just a couple questions from our end. If you could talk a little more about some of the human factors work you're doing in the arthroscopic setting as far as the device and its design. Is it locked down at this point?

Yeah, Jeff, I think and 1 thing you can do is go to our website where we have a video of the Macy arthroscopic procedure, which I really think helps give people an understanding of exactly what the instruments that looks like, and how Macy will be administered arthroscopically. And, you know, the context for the human factors study is that when we met with the FDA in December, we proposed that because we were not changing either the drug substance or the drug product, just the way it was administered. And because, you know, there's a fair amount of published data about, you know, the outcomes, good outcomes when Macy's is delivered arthroscopically principally outside the US when the product was available outside the US. You know, the FDA agreed that a human factor study would be an appropriate path going forward. So really that means you bring in, you know, a number of orthopedic surgeons, you give them instructions on how to administer the product arthroscopically, they do it in a cadaver lab, just to make sure that the interface, the surgeon interface with the instruments you know is appropriate there's there's no issues there and so it's a pretty streamlined path for us comparing and obviously an accelerated regulatory pathway versus you know having had to do you know an actual clinical study so that study is planned for this year and we would plan to submit the label expansion to the fda by the end of the year and would allow us to launch in 2024. okay that's helpful and then

Nick, could you talk about the consumable or reposable instrument kit and what portions may or may not be and how that might look from the payer's standpoint as far as the actual procedures being done arthroscopically and the money flow there?

Yeah, so as you'll recall for Macy, it's typically reimbursed under a J code. So it's a separate code that, you know, that the payers, under which the payers reimburse the product. There's obviously a procedure code, a CPT code, you know, in terms of how the surgeons get paid and then a facility fee. So that's kind of the current economics. The kit you can see in the video is basically a set of disposable instruments, different size cutters, you know, curettes, things like that. And so exactly how we'll price those, you know, is to be determined. But it won't impact sort of the current reimbursement for the Macy product itself.

Got it. Okay. Perfect. That does it for us. Thanks for taking the questions. Thanks, Jeff.

Thank you. Thank you very much. Please stand by for our next question. Our next question comes from Sean Lee of HC Wainwright. Sean, your line is open.

Good morning, guys, and congratulations on finishing a great year. I just have two quick questions. One, for NexoBridge, can we expect any more orders from BARDA this year?

Yeah, no, so no orders from Barnard are soon to share. Just commercial.

Okay, great. And in terms of the launch strategy for NexoBridge, would you be targeting all of the burn centers at the same time, similar to what EpiCell is doing, or would you be starting in certain geographies first before rolling out nationwide?

Well, you know, as we've talked about previously of the 140 accredited burn centers in the U.S. each year, EpiCell is typically used in probably half of them. So obviously we have relationships in those accounts. You know, we are adding cells, reps that will focus on the other accounts with Nexibrid only to start. And so, you know, we've tiered them out by patient volumes, claims data, et cetera. And obviously you focus on high volume centers first, So, it will be, as I mentioned earlier on the call, or in the Q and a session that, you know, we'll be targeting both current, you know, using centers as well as, you know, high volume centers that, you know, have been involved in the various studies for here in the US.

I see. Thanks. That's helpful. And my final question is just on the. new manufacturing facilities, is everything still on track there, still ready to be, sorry, still expected to be completed in 2024?

Yeah, so everything remains on track. You know, the tentative improvement part of the project, you know, is scheduled to be completed by the end of 2024. Of course, you know, we've mentioned that we would expect commercial production in early 2026, so really that 2025 time period is FDA inspection and validation of the new facility.

Great. Thanks. That's all the questions I have.

Thank you.

Thank you. Thank you very much. I would now like to turn the call back to Nick Colangelo for closing remarks.

Okay. Well, thank you very much. And thanks to everyone for your questions and your continued interest in the company. Overall, we delivered strong financial and business results to close the year in 2022, and we expect another year of significant top-line revenue growth and strong profitability and operating cash flow driven by both our commercial franchises in 2023. Given our significant market opportunities for the products and our strong financial profile, we really believe that the company is well positioned for sustained long-term growth in the years ahead. So thanks again and have a great day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.