Anika Therapeutics (NASDAQ:ANIK) Q3 2019 Earnings Call

0:00 Good evening, ladies and gentlemen, and welcome to ANACA Therapeutics' third quarter 2019 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I will now turn the call over to Sylvia Chung, Chief Financial Officer. Please proceed.

0:27 Thank you, Andrew. Good evening, everyone, and thank you for joining us. With me on the call today is ANICA's president and chief executive officer, Joseph Darling. During today's call, Joe and I will review our third quarter 2019 financial results and key business highlights, which were summarized in our earnings release issued today. A copy of the earnings release is available on the investor relations section of our website at anicatherapeutics.com. In addition, a slide presentation is posted on our website in the Investors Relations section under the Events and Presentations tab. We invite you to take a moment now to open a file and follow the presentation along with us.

1:13 Please turn to slide number two. Before we begin, please remember that certain statements made during this conference call constitute forward-looking statements as defined in the Securities and Exchange Act of 1934. These statements are based on our current beliefs and expectations and are subject to certain risks and uncertainties. The company's actual results could differ materially from any anticipated future results, performance, and achievements. Please also see our SEC filings for more information about factors that could affect our results. Certain financial measures we will discuss on this call are non-GAAP financial measures. We believe that providing these measures helps investors gain a more complete understanding of our results and is consistent with how management views our financial performance.

2:05 A reconciliation of these non-GAAP financial results to the most comparable GAAP measurement calculated and presented in accordance with U.S. GAAP is available in the Investor Relations section of our website. I will now turn the call over to our CEO, Joseph Darling.

2:23 Thank you, Sylvia, and good evening, everyone. Thank you all for joining us for our third quarter 2019 earnings call. We are very pleased with the company's performance in the third quarter, which reflects the progress we continue to make in executing our five-year strategic plan to transform Anika into a global commercial company positioned to deliver innovative products across the continuum of orthopedic and regenerative medicine therapies. as a testament to our team's strong execution in the quarter. We successfully delivered double-digit revenue and earnings growth on the strength of growing global demand, ANACA's expanding commercial platform, and continued fiscal discipline.

3:10 For the third quarter, total revenue increased 11%, net income increased 21%, and adjusted EBITDA grew 32% year over year as we continued to leverage are growing global platform of innovative therapies and strong demand for our products both in the U.S. and internationally. We successfully completed the internal build-out of our U.S. hybrid commercial model and the soft launch of our first product under that model, Tactile Set. Given our strong third quarter performance, we are raising our revenue and earnings guidance for the full year of 2019 which Sylvia will discuss in more detail during her financial update and commentary.

3:56 Needless to say, execution is a team effort, and I am very proud of the continued focus and collaboration I saw from our talented employees across the growing ANACA organization. Please turn to slide number three. As we discussed at our Analyst and Investor Day last month, This pivotal time represents the dawn of a new day for Anika. Our vision is to become the global leader in joint preservation and restoration with innovative technologies that exceed our customers' expectations. Through our five-year strategic plan, we are actively working to expand our portfolio beyond our primary historical focus on osteoarthritis pain management into regenerative therapies for joint preservation and restoration.

4:48 We think this is a natural evolution given our strong foundation, our established footprint in the U.S. and abroad, and our proven expertise in product development, clinical and regulatory affairs, manufacturing, and commercialization. This expanded therapeutic continuum across multiple fields represents an approximate $8 billion combined global market opportunity, and we have products on the market and in the pipeline that serve both. It's important to note that the two target commercial segments are divided by and driven through two distinct channels. An office-based call point for injectable pain management therapies and an operating room call point for our new orthopedic surgical and regenerative therapies.

5:37 As many of you know, our legacy commercial partnerships have historically focused on the office-based call point exclusively. but going forward, we plan to activate the second important channel with our new hybrid commercial structure and direct sales team squarely focused on the operating room. Through our efforts, we are confident that we can become an important partner providing value technologies to the surgical theater. Please turn to slide number four. As we continue to pursue a leadership position in joint preservation and restoration, our growth strategy is driven by our focus on what I call the three P's, people, products, and performance.

6:23 First, we want to ensure that we have the right skill sets and the right talent to drive the organization toward operational excellence. Second, we are focused on developing and delivering innovative technologies and expanding our product offerings across the joint preservation and restoration continuum of care. And finally, we are committed to leveraging the hybrid commercial model and driving operational efficiencies throughout our business to drive margin expansion. Please turn to slide number five. Let's start with the first P, people. We are committed to building our talent base for innovation and continue to enhance our team's knowledge and expertise to make sure that we have the strongest team in place to support our transformation and future growth.

7:15 During the third quarter, we appointed James LaRocque to the newly created position of Executive Vice President of Business Development and Strategic Planning. Jim is a 30-year industry veteran who will oversee our global business development function and advance our efforts to identify and evaluate potential acquisitions, partnerships, alliances and licensing opportunities to expand our commercial portfolio and global footprint. We also recently appointed Mira Leiwant to the newly created position of Vice President of Regulatory Affairs, Quality and Clinical Affairs. Mira will oversee our global regulatory strategy, regulatory submissions and interactions with U.S. and international governmental health authorities, as well as our quality and clinical teams and new processes.

8:10 We believe Mira's role will become increasingly important as we accelerate the pace of product development, regulatory submissions and ultimately product launches coming in the coming years. Please turn to slide number six. We are very pleased to have completed the internal build-out of our hybrid commercial sales force in the U.S. during the third quarter. We have successfully onboarded four highly skilled regional sales directors to manage the domestic northeast, west, southeast, and central territories, all under the leadership of our Vice President of U.S. Sales, Steve Golding. These sales directors have extensive experience industry experience and product knowledge and will support the launch of other joint preservation and restoration therapies currently in development.

9:05 In addition, we commenced the build out of a network of independent local and regional distributor agents and are in the process of adding additional partners throughout the U.S. As I have noted on prior earnings calls, our hybrid commercial model will provide Anika with a direct line of sight to the market and more favorable economic results, and we are confident in our ability to take greater control of our future with this new commercial strategy. Please turn to slide number seven. Turning now to the second P, products. In September, we commenced the soft launch of Tacoset in the U.S., As a reminder, Taktoset is a surgically delivered therapy for bone repair procedures, and the first therapy launched under a hybrid commercial model.

9:57 The first surgical procedure of Taktoset was successfully completed in August, and we continue to receive positive feedback from the physician community regarding the therapy's ease of use and procedural efficiency. As we've discussed previously, we have showcased Tacticet at multiple medical conferences during the quarter, and we remain on track to execute the full-scale commercial launch at the 2019 Orthopedic Summit and Evolving Techniques Conference, or as we call it, OSEC, which is being held in Las Vegas this December. As we previously have stated, We estimate the bone repair market to be $350 to $400 million annually, with approximately 900,000 people eligible for treatment for bone voids and other bone defects of the knee.

10:49 TactoSET represents an attractive near-term U.S. growth opportunity for ANACA. Our near-term goals for this program are crystal clear. Number one, complete the full-scale launch at OSEP in December. Number two, onboard five additional distributor agents with the goal of being in 10 surgical centers by the end of this year. We plan to grow to 40 distributor agents by the end of 2020. These initiatives, once again, are led by our Vice President of U.S. Sales and are important building blocks for revenue growth in 2020 and market penetration thereafter. I would now ask you to please turn to slide number eight We expect our rotator cuff therapy will be the second product launched in the U.S.

11:40 under our hybrid commercial model, and product development is currently progressing as planned. As we have previously noted, we believe this unique therapy is highly complementary to Anika's growing regenerative therapy portfolio, and we estimate that the U.S. market opportunity for rotator cuff repair is $150 to $200 million annually. In the third quarter, we continued to refine the prototype and began surgical instrumentation design for this therapy, led by our Vice President of R&D. We anticipate that we will complete the instrument design in the first half of 2020 and plan to submit a 510 application to the FDA in late 2020 to the early 2021 timeframe.

12:30 Please turn to slide number nine. Singhal continues to perform very well in Canada and across Europe. International revenue from Singhal increased 35% year-over-year in the third quarter and 40% year-to-date. The continued growth of Singhal this quarter has further reinforced our confidence in our decision to advance Singhal towards regulatory approval in the U.S. market. As we discussed last quarter, we are currently working to initiate a pilot study to confirm our trial design, increase our probability of success in a phase three trial, and generate data that ultimately will be needed to support FDA approval.

13:19 We remain on track to commence the SYNGALP pilot study in the first half of 2020, and we are in the process of finalizing the newly designed pilot clinical trial protocol. The pilot study is expected to enroll approximately 240 patients across 30 sites in the U.S., randomized to receive either SynGolf, the steroid triamcinolone hexacetinide, or saline placebo. As a reminder, there are three different key differentiators in this revised protocol compared to the prior Phase III 1602 study. The first is the inclusion of a placebo arm. The second is the addition of a much larger TH arm, triacetylhexacetinide, meaning the steroid arm. And the third is the modification of the patient enrollment selection criteria to target the ideal patient profile.

14:17 We believe these elements will enable us to generate the data needed in a subsequent Phase III trial. We continue to expect that the pilot study will take approximately one year to complete. Despite the delay in time to market, we remain confident in SingDol's U.S. market opportunity, which we have estimated to be approximately $1 billion. Turning now to slide number 10, we are focused on accelerating the pace of enrollment in the ongoing HyloFast Phase III trial for U.S. approval. During the quarter, We continue to implement the changes following the protocol amendment approved last quarter and are currently in the process of adding eight new sites outside the US and Europe.

15:05 Patient enrollment is currently in the 60 percentile range and we expect to complete enrollment by the end of 2020. Additionally, we look forward to benefiting from the leadership of Mira Leiwant, our new Vice President of Regulatory Affairs, Quality and Clinical Affairs as we continue to advance the trial. We recently held an educational symposia for orthopedic surgeons on Hylofasc at the 2019 World Congress of the International Cartilage Regeneration and Joint Preservation Society held in Vancouver, Canada. Over 80 surgeons participated in the symposia. We continue to see a very high level of enthusiasm among physicians and patients for this innovative regenerative therapy.

15:55 HyloFast represents another significant U.S. market opportunity, which we conservatively estimate to be more than half a billion dollars. We are very pleased with our third quarter business results and the continued progress we are collectively making across our organization as we execute our growth strategy. I will now turn the call back over to Sylvia to review our third quarter financial results in greater detail. Sylvia.

16:23 Thank you, Joe. Please turn to slide number 11. Total revenue for the third quarter increased 11% year-over-year to $29.7 million, compared to $26.8 million for the third quarter of last year. Revenue growth for the quarter was driven primarily by Monavisk and Sengal, which delivered worldwide revenue growth of 15% and 35% year-over-year, respectively. Global VSCO supplement revenue in the third quarter increased 9% year over year. Domestic VSCO supplement revenue increased 7% year over year for the quarter.

17:08 On a sequential quarter basis, domestic end user net sales price decreased around the high single digit percent range for OrthoVisc and increased around the low single digit percent range for MonoVisc. On a year over year basis, End-user volume for the quarter increased 6% for Orfavisk and 26% for Monovisk. Of note, the end-user volume for Monovisk has grown in the double-digit percentages year over year each quarter for 18 consecutive quarters since its launch in the second quarter of 2014. International physical supplement revenue increased 17% year-over-year for the quarter, driven primarily by Syngal and Orfevisc.

17:59 As Joe noted, the 40% year-to-date revenue growth of Syngal demonstrates the continued strong demand for this therapy internationally. Product growth margin increased to 80% for the quarter, compared to 69% for the third quarter of 2018. The strong revenue, sorry, the strong year over year increase was primarily due to more favorable changes in product revenue mix. In particular, an increase in U.S. royalty revenue for Monovisc. As a reminder, 2018 product gross margin was negatively impacted by a voluntary product recall, which was resolved in the fourth quarter of 2018.

18:47 Total operating expenses in the quarter were $17.6 million compared to $18.2 million in the third quarter of 2018. The year-over-year decrease in total operating expenses was due primarily to lower cost of product revenue, partially offset by higher selling, general, and administrative expenses. Net income for the quarter was $9.2 million or $0.64 per diluted share compared to $7.6 million or $0.53 per diluted share in the third quarter of 2018. Adjusted EBITDA, earnings before interest, tax, depreciation and amortization increased 32% year over year to $14.9 million for the quarter compared to $11.3 million for the third quarter of last year.

19:44 The increases in net income and adjusted EBITDA were due primarily to the increase in total revenue and decrease in cost of product revenue. During the third quarter, we generated $21.8 million in cash from employee stock option exercises and approximately $10 million in cash from operating activities. We ended the quarter with cash and investments totaling approximately $173 million. Our cash deployment strategy remains focused on making organic investments to drive top line growth, pursuing strategic M&A to augment organic growth, and returning capital to shareholders through share repurchases.

20:30 we continue to expect our 30 million accelerated share repurchase program to be completed no later than the first quarter of 2020. And we have not yet had any share repurchased under our board approved $20 million open market share repurchase program. Turning to guidance on slide number 12. Based on our strong third quarter results, we expect total revenue to increase six to 7% above the prior year for the full year of 2019. We now expect total operating expenses to be in the mid $70 million range for the year. Adjusted EBITDA is anticipated to be in the mid to high $40 million range for 2019 based on the net income expectation around the mid to high $20 million range for the year.

21:25 and we expect capital expenditure to be around $5 million for 2019. This concludes our financial review and I'd like to turn the call back to Joe to discuss near and long-term growth drivers and our strategic priorities to deliver on our five-year strategic plan.

21:48 Thank you, Sylvia. Please turn to slide number 13. Before I open the call for questions, I'd like to review the five key business and financial objectives that we aim to achieve through our strategic plan over the next five years. As discussed at last month's analyst day, we want to first accelerate profit and growth and deliver sustainable double-digit revenue growth. Second, we want to diversify our revenue stream and enhance our value capture. We are also diversifying through different sales channels and international expansion. Third, increase our Vitality Index to greater than 25% by the end of five years.

22:33 As a reminder, Vitality Index is defined as the percent of new product revenue compared to total revenue. Fourth, pursue strategic M&A focused on token acquisitions to augment our organic growth. and finally, fifth, continue to maintain a disciplined and balanced approach to capital allocation focused on the highest return opportunities for our shareholders. We are very committed to sustaining our legacy of trust, operational excellence and financial discipline as we execute our growth plan to transform Anika into a global commercial company focused on joint preservation and restoration.

23:21 In turning to slide number 14, I'd like to close my comments on the quarter by highlighting what we view as the four key elements of our strategic growth plan. First is talent and culture, focused on fostering an innovative environment across our organization. Second is commercial acceleration. Through our U.S. hybrid commercial model and international expansion, both in market penetration and then expanding into countries where we currently don't have a presence. Third is R&D innovation through investments in R&D to expand and advance our organic pipeline across the joint preservation and restoration continuum of care.

24:07 Fourth is inorganic growth. This is focused on token acquisitions that will complement our existing and future product portfolio. All of our strategic initiatives are focused on positioning ANACA to achieve a leadership position in joint preservation and restoration and also doubling our total revenue within the next five years. I'm confident that we can achieve our goal of becoming a leader in joint preservation and restoration and successfully double our total revenue within the next five years. This quarter is just the beginning, and we look forward to delivering continued progress, operational and financial performance, and value for both patients and shareholders as we execute on these initiatives in the coming quarters.

24:58 We are now happy to take your questions. Thank you. Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. And to withdraw your question, please press the pound key. We ask that you please limit yourself to one question and one follow-up. Then you may re-enter the queue with any additional questions. Our first question comes from the line of Jim Sidoti with Sidoti and Company. Your line is now open.

25:29 Good afternoon. Can you hear me?

25:31 Good afternoon, Jim. Good afternoon. Good afternoon.

25:34 Great. Great. Sylvia, when you talked about pricing earlier, were you referring to end-user pricing or the transfer pricing?

25:44 Yes, Jim, I was referring to the end-user pricing and end-user volume. So the stats that were stated were the in-market information, which impacted the royalty revenue.

25:59 Okay. And I know you're not going to want to give us 2020 guidance until at least the next quarter, but Can you just give us directionally where you think pricing is going over the next 12 months? Do you think that'll continue to move up, or do you think it'll level off from here?

26:20 Yeah, so I can comment on what we have seen is in 2019, we certainly have seen stabilization of pricing. And Monavit's pricing actually increased. on a sequential basis for three quarters in a row now. If we look back a little bit further, I think the pricing volatility certainly was strong, in particular for 2018. So this is a topic that we are actively discussing with our commercial partner, J&J, Depuisin, CSMyTech, Sports Medicine, and we're closely monitoring the development. I think the year-to-date results are good. Whether or not it's going to sustain, I think we need to keep monitoring the progress going forward.

27:10 All right, and then at one point, you thought you might receive a $5 million milestone payment, and then when the pricing came down, that went away. Is there any chance that that comes back in 2020?

27:25 Unfortunately, there isn't. This is a contractual term under the existing Monavis agreement that ANACA has with MITEC. and that particular term has a time element to it and we are beyond that window.

27:43 Okay. And then the last one for me, you said you received about $22 million in employee options. And I was wondering, is that spread out over a number of employees or were there any, you know, was there one or two employees?

28:00 It was spread out over a number of employees, but I can also tell you that it included a couple of former executives of the company.

28:10 Okay, so it was unusually large this quarter, it sounds like.

28:13 That is correct.

28:15 Okay, thank you.

28:17 Thank you. Thank you. And our next question comes from the line of Joe Munda with First Analysis. Your line is now open. Good

28:27 afternoon. Can you hear me okay?

28:28 We can hear you great, Joe.

28:32 So first off, can you give us what the split, well, first off, can you give us what Singhal's revenue contribution was in the quarter?

28:43 Singhal's revenue contribution for the quarter is roughly about 5%, and it's been pretty consistent in terms of percentage of total revenue. It's been pretty consistent on a quarter as well as on an annual basis.

29:00 and then the split on OrthoVisc and MonoVisc?

29:07 Domestically or global? Global. Global. Global. So international VSCO supplementation is in the high team percentage. and the domestic is roughly around low 70%.

29:39 I'm sorry, so international high teens, domestic 70%?

29:44 Excuse me? Did you get that?

29:52 Yeah, I got it. And then, I guess, you know, as we look out to 2020, you know, Joe, you're talking about adding 40 distributors for TactoSet. I mean, is there a specific bogey that these distributors need to hit? In addition, can you give us some sense of what that's going to look like? Are we talking 10 a quarter? Is it going to be, you know, scaled evenly throughout the year? Any color there would be great.

30:25 Yeah, sure, and that's a good question, Joe. The way we look at adding the distributors is first in the high prioritization areas. So we've mapped out the priorities across the geographic U.S., So that's number one. Number two is we certainly want to get to the high volume surgical centers that can really start to ramp up tactics on its sales. So we've looked at that as well. So in answer to your question, we would expect this to be a smooth transition of adding the distributors when we find the right ones. So I don't want to limit us to just saying 10 per quarter from a numbers perspective. Let's say what I want to go after the best, the brightest, the most connected, and the ones that had the experience in going after the bone therapy product.

31:20 So we're going to do this in a very systematic manner that would address the market opportunity. That answers your question? Okay.

31:30 Yeah, it does.

31:55 Yes, so we're definitely pleased with the strong improvement in product gross margin, 11% this quarter versus last year's Q3. There are really two key factors, and I'll comment on each of them. On the revenue side, we saw an increase in revenue of $2.9 million year over year. and 2 million out of the 2.9 is related to U.S. Monavis Royalty. So that is a big driver. And as I mentioned on the earlier part of this earnings call, we saw volume increased about 26%. So both volume and price was a positive trend this quarter versus last year's Q3. So that is a meaningful margin contribution for the quarter, contributing to the 11% uptake from last year.

32:50 On the cost side, as you can see on the P&L, our cost of good decreased by about $2 million year over year. And there are two drivers there. One is product mix, meaning that we have a larger portion of our product revenue this Q3 from higher margin products like Monovisc, Sengal, and HyloFast comparing to the year before. So positive product mix. And the second factor is related to higher production volume in the current year comparing to previous year. As a reminder, the voluntary recall that took place last year had impacted our product margin throughout 2018.

33:36 So those are really the key drivers contributing to the 11% increase of product growth margin.

33:45 Can you just remind us how much of an impact it was last year on the margin, roughly, if you were to, let's say, normalize that?

33:55 I would say that it would be around low to mid single-digit percent, yeah, from a margin standpoint. just looking at the production side.

34:14 Okay. Thank you.

34:16 You're welcome. Thank you, Joe. Thank you. And our next question comes from the line of Ryan Gagnon with Gagnon Securities. Your line is now open.

34:26 Hi, folks. It appears that J&J switched from WAC pricing back to ASP pricing on Monovisc on October 1st. What would this mean for pricing of Monovisc a few quarters out? Because I know this doesn't change things in the current quarter.

34:45 That is true. So what you observed in the press, and this is Joe, by the way, obviously they started reporting to CMS. And as you look at pricing in this market, we have limited visibility from an actual true pricing perspective until you get toward the end of the quarter's. So we see volatility potentially on a quarterly basis that we saw last year. But that's part of the reason why we're moving towards a direct hybrid sales organization so we can have a more predictable business that ties back to our five-year strategy, utilizing the hybrid commercial model. But from a perspective of what impact it's going to be, I can tell you that Throughout the year, it's been pretty consistent.

35:43 But as you start to now take a different path on the strategic front that they've taken, it's still limited visibility for us, unfortunately.

35:56 So they weren't reporting ASP at all. So pricing went up quite a bit. And then with this switch, You're looking at this and not necessarily sure what the volatility of pricing is going to look like going forward?

36:15 We have limited visibility to it, so we have to triangulate all the data that we get. I think the good news is now that we have feed on the street in direct line of sight to customers, although the different call points, we're hoping that they'll pick up on some competitive intelligence and feed it back into us. but really from a pricing perspective, pricing questions are really supposed to be directed towards J&J Moitec due to our contract and the non-disclosures that we have. So I really can't comment on it much further than that, Ryan. That's the best I can tell you at this point.

36:52 Thank you. Thank you. And as a reminder, ladies and gentlemen, if you have a question, please press star 1. Our next question comes from the line of Mike Patusky with Barrington Research. Your line is now open.

37:07 Hey, good evening. So, Sylvia, on the R&D, I assume R&D ramp associated with the Sengal pilot, you know, when should that, like, the first three-quarters of R&D expense have been pretty consistent, 4142. I mean, when should that sort of take that step up more towards, I don't know, maybe 5 1⁄2 to 6 1⁄2 or maybe 7 1⁄4? When does that start to ramp? I mean, is there something in advance of sort of mid-year 2020? Can you just speak to that?

37:41 Yes. So the pilot study, we had shared that the timing of – commencing that study would be in the first half of 2020. But from a expense standpoint, we actually have preparatory startup activities that is actually happening right now in the fourth quarter of this year. So we do expect R&D expense to pick up in the fourth quarter from Q3 and the first half of this year due to the starting activities related to the single pilot study as well as a couple of small-scale European post-market studies, one for Monovisc and one for our tennis elbow product. So these activities are incremental to early-year R&D expenses. And on top of that, obviously, we're rapidly advancing with the rotator cuff repair program, which Joe commented about.

38:42 So these are the key drivers for the increase in R&D expense as we head into Q4 of 2019.

38:50 Is it going to essentially the R&D line, is that going to sort of go to sort of what will be kind of a consistent R&D spend roughly? going forward in Q4, or is it kind of the first step, and then it'll ramp further as we get closer to the trial starting?

39:14 Yep. It will scale up next year as we start to enroll. So, as you know, once patient enrollments take place, the incremental costs will be picked up and Further along, once the phase three study starts up, that trial's cost from a dollar standpoint would be more expensive as we previously talked about. So for us, it's difficult to pick a baseline number. A lot of the R&D expenses, as you know, scale with the timing of clinical studies as well as dependent upon the size of the clinical studies that we take on.

39:57 Sylvia, do you have CapEx handy for the quarter? I didn't hear it if you mentioned it.

40:03 I think it's between $400 to $500 year-to-date. It's roughly $2.3 million, if I remember correctly. Hold on one second.

40:20 $400,000 to $500,000 for the third quarter. 2.3 million for the first two years?

40:26 Yeah, 2.3, 2.5 million. Yep.

40:29 Okay. All right. So you expect that to ramp quite a bit then in the fourth quarter, obviously, with the guidance?

40:36 Yeah, we have some planned facility improvement as well as equipment purchases toward the end of the year.

40:48 Okay. And just last one for Therapeutics. Joe, if one were to attend that Las Vegas conference, is it white paper? Are there actually demonstrations? What would a person see?

41:04 Good question, Mike. You'll see a couple things. You'll see podium presentations. I believe we have two physicians presenting based on their experiences with TactoSet. You'd also see in-booth demonstrations of the product. And we will also have and other physicians in the booth as well to answer any technical, surgical questions on technique or, you know, having their presence in the booth is always a strong point for communicating a message.

41:35 And these are docs that have actually already done surgical procedures, correct? Correct, yeah.

41:43 Doctors that have used tactocet.

41:45 Yep.

41:46 Yep.

41:47 Terrific. All right. Thanks, guys.

41:49 Thank you, Mike. Thank you, Mike. Thank you, and I'm sure no further questions. So with that, I'll turn the call back over to CEO Joseph Darling for closing remarks.

42:01 Well, first of all, thank you all for your time today. We look forward to continuing to update you as we execute on our growth strategy. So I want to thank all of you, and have a great evening. Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect. Music by Ben Thede