Aoti (LSE:AOTI) — Half Year Results

0:01 Good morning, and welcome to the AOTI Half Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll. I would now like to hand you over to CEO, Mike Griffiths. Good afternoon. Yes. Good afternoon. Thank you for joining us here. So I'm Mike Rivers, and here's my CEO and our CFO here, Josh Pankanja, and we're gonna be walking you through our midyear presentation here. Morning, everyone. Morning. So we'll go to the thing now. Make you lunch. Okay. So we'll walk you through. So this really is a transformational growth year for the company.

0:50 And to remind everybody, we have a unique multimodality therapy called TWO two, double wound oxygen, and we are already the leader in the double oxygen space. It's differentiated by not only its clinical utility, but also the fact it delivers longer, more durable healing of chronic wounds, which has significant cost and health economic benefits as well. We already are generating significant early revenues with strong profitable growth in the sectors that we're in, and the most transformational news for the company is the impending CMS, which is the Center for Medicare and Medicaid Services in The US, coverage for the therapy, which was announced as a provisional, local coverage determination in July of this year, which is now in a final process that will complete by July of next year.

1:42 Our existing commercial infrastructure, we have been honing and and making adjustments to such that we can maximize our footprint and improve our best practices, to attain as much operational leverage as possible across the different segments we're able to do business in today, which will also prepare ourselves well for when this broader coverage is in play. And we are also unique in the fact that we're building an outcome based at home category within the advanced wound care space. And it's a unique thing with us that allows us to deliver and engage with patients, prescribers, and other stakeholders, including payers, so that everything that we do in the patient's home demonstrates the same durable healing outcomes that we've shown through our extensive clinical trials.

2:32 So jumping to the numbers here and the performance, and Jayesh will get into this in more detail in a second, we saw robust underlying profitable revenue growth of nearly 19%, well ahead of our peers in the advanced wound care space. And remember, this is in the face of quite turbulent times in The US, particularly in the wound care space over this last year. We've gone through a number of organizational operational changes to hone our sales structure and optimize our our go to business practices, which are still in the process of of being completed, that will not only improve our our sales performance in the short term, but will will prepare ourselves for the future that's coming with this broader coverage. As I mentioned earlier, actually at the end of the period, but in July, CMS published the long awaited coverage determination, which was saying that topical option is reasonable and necessary for treating Medicare patients. And Medicare are the patients that are 65, the elderly population, which, as you can imagine, have a broader prevalence of chronic disease. So a significant milestone, and now it's working through that process to a final coverage determination and been availing ourselves to build patients.

3:45 We continue with our market access, progress, not only in the restructuring of sales organization and honing honing our our best practices, but also in in increasing the number of states where we have Medicaid provider IDs. And unlike Medicare, Medicaid is the federal government programs for low income and for people with disabilities and has actually more enrolled lives, you know, close to 80,000,000 enrolled lives compared to Medicare. And, again, we keep expanding to that sector so we can avail ourselves of of those opportunities open, and it's a state by state administered program. Last but not least, we our evidence base, which is is second to none in demonstrating sustainable, durable outcomes, has been bolstered by a very large real world study with over 3,000 patients that demonstrated across all our extremity wounds, diabetic foot ulcers, venous leg ulcers, arterial wounds, etcetera, very consistent not only healing and non healing wounds, but durable healing with significant reductions in reoccurrence over greater than 12.

4:45 So, again, we have evidence based second to none and the differentiated message clinically second to none. So if we go to the business overview of where we stand, I just wanna remind people a little bit about the opportunity. And in The US particularly, but it's it's like this in most countries, you know, the way health care is being delivered is by by by delivering economics associated with activities. So you provide services, and you get paid for providing services to treat patients or treat diseases. In The US, they refer to that historically as fee for service. You get paid for what you do. And and sadly, in some cases, get paid for the more you do, and this has helped drive the spiraling costs of The US health care system, which are in excess of $5,000,000,000,000 a year spent on health care spent on health care, which is, you know, more around the same GDP as the same as the GDP of Germany and more than 25% more than the GDP of The United Kingdom. Huge amount spent on health care, and 90% of those costs goes to managing patients with chronic disease. So there's enormous burden that's getting bigger, and quantity is unsustainable.

5:46 So what the shift is, what people wanna move towards is outcome driven economics or outcome given, care, so you get paid for delivering better outcomes to patients and, obviously, hopefully, likewise to payers, and you can reduce that health burden. We are uniquely positioned because we are, as AOTI, establishing a at home platform that allows us to deliver these outcomes, and it's based around three very distinct pillars. The first is our unique differentiated topical induction therapy, where we are delivering durable synergistic healing, with evidence second to none that shows not only durability of reduction in reoccurrence and resources, but consequently significant reduction in costs. We're also unique in the fact that we are an accredited home care provider. When our therapy is ordered, we manage the patients, set them up at home, so we control the value chain all the way to the patients at home.

6:42 And then the last component of that, which is key to our ability to scale, is our eyes on the wound platform that allows us then, with data analytics and AI driven technology, to engage more actively and proactively with patients and provide reports and information back to prescribers and to payers so that we can demonstrate on every patient what's written on the tin we deliver. So when we show these durable outcomes in studies, it's not just academic, we deliver on every patient and can really deliver then that value proposition back. And this creates enormous strategic advantage, but also incredible barriers of entry to others trying to follow. So so what is the size of the market predominantly here in The US? Now if we look at a bottom up analysis based on real claims, today, our service of ten year market, prior to us being able to build a broader Medicare and other associated coverage, is focused on two sectors, the Veterans Administration nationwide in The US, and New York State Medicaid. So the Medicaid portion, as I said, is the low income and disabled people, which get covered by government health care. If you look at that, that accounts for, we estimate conservatively from a bottom up, difficult to heal, lower extremity wounds, about twenty eight thousand wounds. We have around six thousand wounds, so less than twenty percent penetrated.

8:00 So it's a four hundred million dollar opportunity that we have tons of upside. So us honing and improving our performance and execution in those sectors has lots of upside to grow in the short term and near term. With the decision now for Medicare to deem top of watch and reasonable necessary in the process of that coverage determination to complete and flush through the systems, this will open up not just Medicare, but all other payer sectors, and we believe we'll drive that then to an addressable market of about one point eight million wounds or a 65 fold increase. So this is why it's transformative. It's an enormous multiplier of opportunity that we can then, take advantage of. Also, uniquely, we took a very phased approach to go to market in The US. And rather than wait until we have broader traditional Medicare coverage, which a lot a lot of companies will do, we focused in on the Veterans Administration and New York State Medicaid first, where we've been able to get reasonable traction, as I said, just under 20% penetration today.

9:01 So plenty of upside. What we've then been working on, if there's our market access, is expanding into more Medicaid. Remember, the lower income portion, which can make decisions on their own in the state level prior to Medicare making nationwide decisions for the 65 population. We were getting good progress and traction there, and this is where we've seen significant headwinds from one big beautiful building administrative students' focus on on on ratcheting down support for Medicaid. So, again, still part of our strategy, but certainly, it's a area that that has been constrained somewhat to date. With the news now of CMS coverage determination coming into play, which as we said, statutorily has to complete as a final LCD by July twenty third of next year, this will now open up access to not just the Medicare, the 65, where there's the most prevalence of chronic wounds, but will also is used as a as a as a a bellwether for all other payer groups and will help, improve access to not just Medicaids, but commercial and other payers in The US system as well. So it really is a transformative part of of our strategy.

10:10 This sort of articulates a little bit the process and the timeline of where we are. And the process is is they the Center for Medicare and Medicaid, services published a proposed local coverage determination. It says local, but it's a it's all four of the regional local, carriers publishing together, so effectively as national coverage. It then go went into a forty five days statutory public comment period. And as part of that, there was an open public comment meeting where there was universal support for recovery determinations, a very, very positive support indicating, you know, that they should move forward. They now have, as I said, statutorily, a year from the date of that publication to finalize the local coverage determination, and there's another mandatory waiting period before the code becomes effective and billable.

10:59 Obviously, in the background, during this period and potentially afterwards, they will be deciding on what level of payment. They will decide in on how to flush it through as it goes into the fee schedule, etcetera. So there's work that goes on, and, obviously, we will be working with our advocacy teams to maximize our input to support that process in the background. So, again, a very clear definable timeline to broad and more nationwide access. As we continue, obviously, to work in the background of market access, our focus is is honing our commercial execution in the sectors today that we said that we we have clear coverage policy, which is the Veterans Administration, and particularly New York and New Jersey Medicaid. As we've announced before, we've made a number of changes to our our our sales and our our commercial team structure.

11:45 And one of them has been is to take what were sector specific sales teams, either focused on the VA or focused on Medicaid, and make it more geographic so they can focus on all the business that they can avail themselves to, be it Veterans Administration, be it commercial, Medicaid, etcetera, in their territories, and honing then the best practices from our best performing reps so that we can improve productivity. And by productivity, we mean the number of patients each rep has on on being serviced with our therapy every month. And we know that if we can improve productivity of our lesser performing reps, ease more to the medium, which will move the medium up closer to our higher performing reps, obviously, that those productivity improvements will drop to the bottom line now, but we'll set ourselves up well with the same prescribers that we want to to have ordering our therapy when Medicaid comes along because it allows us to broaden our core points to those same prescribers.

12:39 As I mentioned earlier, part of our platform, our eyes on the wound platform, is a technological platform that allows us to manage engagements with patients to guarantee we deliver the outcomes, but also to demonstrate with data analytics that we deliver those outcomes to both the prescribers so they see progress, but also to the payers that want to make sure that if you're doing things in the home care environment, patients are using it so it's effective. This slide is really to sort of demonstrate based on just percentages of the population how much these different segments mean in The US. If you look at where we are today, we're in the Veterans Administration and New York Medicaid. If you look by population, that's less than 5% of The US population. It's already a $400,000,000 opportunity. With Medicaid, as we've been expanding more and more and now have 27 Medicaid states, we have the potential, you know, to to grow significantly then, in that sector. With the Medicare predicate, we expect that now progressively to improve our access to Medicaid states.

13:38 And then if you look at Medicare, Medicare is split between what they call fee for services, where the federal government, you bill and they pay you directly, or Medicare Advantage, which are managed care insurers that manage those patients for the government. And it's not fifty fifty, but it's close to fifty fifty. And you can see we are looking at then when we will have access to those populations staged over time. And last but not least, there's also a commercial sector, which has regular insurers managing people predominantly that are working, you know, for companies, which have a lower proportion of chronic disease, but not none because it's a large number of patients. So over time, the Medicare coverage decision will progressively allow us to open up more and more of these sectors, and they will then come in as you can see. And we tried to illustrate, you know, that going out from 2030 onwards, we should have access to pretty much all of these sectors to drive the business. So we won't be playing in 5% of The US market.

14:31 We'll be playing in a 100% of The US market. Now as I mentioned earlier, we have a sales infrastructure that used to be sector specific that's now geographic. So they're focused on in the geography. You can see how they're distributed across The US, and it allows us to have some presence in about 27 states, which is consistent with the Medicaid provider IDs. That touches about 80 odd percent of The US population, the majority of population. So we are able if we can hone our practices and and bring along prescribers in in those different states with the current patient mix that we can service. Those prescribers also then have Medicare patients. So such when Medicare is available to be billed, you know, they were able to give us those Medicare patients because they've seen the outcomes and believe in the therapy. So all the work we do now and the honing do of our best practices doesn't have just an immediate effect on on performance and productivity and and, obviously, margins, but it will really pay dividends as we expand with broader Medicare coverage.

15:32 Now, just to finish off here, this is an illustration of what does this really mean. Well, the the only other sort of analogy we have in the wound care space was KCI, who were who were the the developers and the introducers of negative pressure wound therapy you know, back in the late nineties, early two thousands. And then in two end of two thousand, they received their Medicare coverage. And as you can see, from that, there was quite exponential and explosive growth from that point, you know you know, such within five years, they took themselves to effectively a billion dollar, you know, company, and this product line then then sort of, you know, teed out just under $1,500,000,000. And here we are now, to give you some idea, if you do it the right way, you have therapies that are effective, and we have far more barriers to entry with our outcome based and home approach church than they have, you know, you can establish not only a very large business, but they have maintained that dominant position and that size of business, you know, even today, which is, you know, twenty six years later, twenty five years later, they are still the dominant player with a a close to $1,500,000,000 product line around negative pressure.

16:34 So, again, give you some idea of what the potential is if we if we if we do execute effectively. So now I'm gonna pass it over to Jay. He's gonna walk you through the financials. Thanks, Mike. And good afternoon, everyone. So the I wanted to I want you to to leave you with three key messages from the from this slide. We've had robust underlying growth of around 18.8%. Underlying means excluding our Arizona Medicaid segment, which we've ceased taking on new patients, and I'll come on to that in a little bit more detail. We've also had positive operating cash flow and improving net debt, and we've improved our EBITDA margins. So just to say on on the revenue side, our reported growth was still very good at 10.8% and was driven by VA and Medicaid.

17:31 Our EBITDA grew 16.6% to 3,600,000, and our margin improved by 50 basis points to 10.1%. And that's driven by our revenue growth and our sales rep productivity that Mike talked about earlier, but also changes to the commission scheme to really drive the right behaviors and drive that top line, offset by investments to support future growth activities. On the operating cash flow side, we saw positive operating cash flow of 900,000, which is an improvement from this the the same period last year, which was a 4,700,000 cash outflow. And that was driven by a strong VA performance, which is paid on provision of service, so almost cash straight away, improved working capital in the form of better DSO and deferring inventory purchases into the second half, but also ceasing taking on new patients in Arizona from 04/01/2026 where Arizona is a is is a Medicaid state that we have been unable to collect our billed revenue. I'll come on to that in a bit more detail later on in the deck.

18:47 Our net debt saw a slight improvement from the end of the year by 200,000 to 6,300,000. So our cash is remaining relatively stable, and that's all due to the improved VA performance and working capital I mentioned earlier. Cash at June was 13,800,000 and compared to the year end of 13,400,000. So in terms of the components of the underlying growth, the biggest contributor to growth is our VA business, which grew 16% and contributed $2,800,000 of growth. That was driven by our commercial restructure, which has shown improvements in productivity since the same period last year, but also the impact of Doge, we've seen abating as well, and and so the business is getting back to historical levels of growth.

19:42 The the second largest area of growth was our Medicaid business, which is primarily driven by New York and New Jersey Medicaid. That sector grew 21 and a half percent, but our expansion plans are still hampered by The US health care with headwinds and the one big beautiful bill act. We're trying to get coverage in in new states, is is taking much longer than than we previously experienced. Our other segment, which is a nonmaterial segment, is contributed about 300,000 to growth, and that primarily came from The US commercial segment. In terms of profitability, as I said as I mentioned earlier, you know, we our EBITDA was $3,600,000 at a at a 10.1% margin, and you can see that that that improvement has been primarily driven by revenue growth and improved gross margins. Our gross margins improved by 1.1%, and that was two two main reasons for that. The first is that we're much more efficient at using our fleet of controllers concentrators to deliver the service to the patients, but also better utilization of our consumable stock as well.

20:57 The new commission plan contributed a bit to improving EBITDA as some reps miss their quotas. And and in the new plan, if if you miss your quota, you don't you don't get the full commission rate that you would otherwise get. And that's offset by primarily investments to support growth in the future. So these are investments that will help us drive that top line once we get that CMS market access, and that flushes out to the rest of the the market. And and those investments are, you know, investments in headcount either in the sales rep community, but also areas to support sales rep billing activities and things like that, but also other items like marketing and market access and product evaluations.

21:45 I think I think one of the important observations on this slide is that you can see the operating leverage that that we're we're going to get. If you weren't making those investments in growth, you can see that that our profitability could be up to 20% rather than 10%. And as we scale, you know, we should be seeing our profitability improve along those lines. In terms of cash flow and net debt, I've I've mentioned before, we had strong operating cash flow due to VA performance, improved working capital, and ceasing the treatment of new patients in Arizona. We also had a lower capital expenditure than we had expected because of our more efficient utilization of our fleet of rental units.

22:32 So the primary item on cap cap on capital purchases there is our eyes on the wound development. And then we have a small accrual on our exit fee for our loan, which is forms part of reconciliation. So just talking about Arizona, for for those of you who who aren't aware, you know, we've been in discussions with Arizona State Medicaid and Arizona insurers where we have not received payment for treatment of patients due to a a whole load of reasons that are impacting our Arizona medic Medicaid, which have been caught up by cyber breaches, Medicaid insurer turbulence, and CTB fraud, and multiple Medicaid director changes. And we took the difficult decision on the April 1 to cease the treatment of new patients from Arizona Medicaid, and that helps to to not have more of a working capital build up and helps our cash position going forward.

23:29 And, you know, I just want to say that, you know, we're working closely with the Medicaid Arizona State Medicaid agency for formal coverage policy for our therapy and to recover the historical claims going forward, and and we're confident in collecting those that historical debt. Consequently, as as a result of ceasing to take on new patients in Arizona Medicaid, we reached an agreement in September to revise our revenue and EBITDA covenants of our road low loan just to prudently bring them down because we're we're no longer gonna get revenues from Arizona going forward. And then finally, for the outlook for the rest of the year, you know, I just wanted to say that, you know, 2026 is a transform transformative year for us. We we received the draft LCD from CMS, and and we're expecting as well that we're gonna move towards the final LCD, you know, in within the three hundred sixty five day period, and that'll really open up the market for us, as Mike mentioned. We've also been optimizing our sales structure to deliver the full potential of that market opportunity.

24:36 So for the full year, we're expecting our 2026 EBITDA to be in line with current consensus, which is 6,800,000 as at September 29, and we're confident with our net debt and cash outlook for the full year. We're expecting to continue our top line growth in line with our guidance set at the time of our f y twenty five results, and that's underlying mid teens growth, excluding Arizona Medicaid, all low single digit growth on a reported basis. I'll now hand back to Mike just to say some closing comments. Thanks, Jeff. You know, so just sort of to summarize, I mean, this is a very exciting time for the company. The the long awaited and the transformative or transformational growth driver, which is the broader Medicare coverage and what that does not only to avail ourselves to the Medicare, the 70 65 population, but also opening up, you know, access to broader other payer groups like the Medicaid and commercial payer insurances as as its users' gatekeeper means, you know, this opportunity grows exponentially, you know, 65 plus fold in the coming few years as that finalizes and and flushes through the system.

25:45 You know, what we are doing is honing our ability to do business and and involving and and and rolling out technology in our eyes on the room platform to maximize our ability to proactively engage with patients, to interact with with digital architecture back to the patient records, and to demonstrate to both payers and clinicians that that when we deliver durable outcomes in studies, we actually do that in the real world, and those true clinical and cost saving benefits are really realized on every patient. This separates us apart from other players in the space and opens up enormous opportunity as we're in the patient's home to help manage their comorbid conditions in the future. So with that, I think we will finish the presentation, and we will go to the q and a. That's great. Thank you very much indeed for your presentation. Let me just turn on your cameras back up. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your master dashboard.

26:50 Mike, Josh, if I may now just hand back to you to take us through the q and a, and I'll pick up from you both at the end. Thank you. So there was a question regarding about what Medicare is gonna pay for the therapy. I think a very valid question. And, you know, you know, they it it highlights that, you know, we're currently if you look at where we are today, we are reimbursed on the federal supply schedule contract in the Veterans Administration at around, you know, $6,100 per month for the therapy. That really acts as a backstop because that is favored nation pricing, and and Medicare usually will not go there, and they certainly can't go below there. So that's a backstop. You know? In every other sector, including the significant business we have in New York and and have had in Arizona and and and certainly have still New Jersey and other states, Medicaid with managed care insurers, with the commercial contracts we have in business with Cigna, and now beginning with Blue Cross Blue Shield. You know, I'm up in in the in the Northeast.

27:46 You know, our reimbursement is is nearly always, you know, around double or more than that. So, obviously, what we will be advocating for in the process at, you know, through various channels is reimbursement consistent with the the prevailing rates in the marketplace. And our expectation, it will be somewhere between the VA price and that price, but, you know, that that has yet to be determined. And as you can see, that's part of what will happen between now and the finalization of the LCD. Mhmm. Regarding fee for service and and and insurers, generally, the pricing will be consistent across because once med once Medicare sets a fee schedule price, then the the insurers follow that. They don't have to follow it for the commercial sectors and other sectors, but certainly they would for Medicare. And it also sets a precedent that Medicaid states may or may not follow at the discretion.

28:46 So it was okay. What is the maximum patients rep we can sync to? So we're saying it's currently, I think I'm gonna highlight here, around 20. So this is our average patients per rep. And we think that that has the ability to stress significantly. If we look at our highest performing reps, they they are producing as much as five times as many as that. And and so, obviously, that we don't expect everybody's gonna be as good as the but we certainly believe the ability to drive the average and potentially double that in the in the future, what happened overnight, is very reasonable. And that is without Medicare. So this is our underlying performance in the current environment. Once broader coverage comes and and, you know, as you remember, most of these prescribers, the majority of patients that they would have, will be Medicare. If we do our job to deliver outcomes and prove the therapy's effectiveness to prescribers, those prescribers become, as we tend to refer them, not not necessarily doctors, but they become sticky prescribers that want to give you more patients. And the majority of patients they generally have will be Medicare. So when they're able to give you those patients, if they believe in the therapy, the likelihood they will, in which case, yeah, we could see a significant growth in productivity even, you know, due to that. So we believe there's there's the ability to significantly, compound, you know, the the improvements in productivity from where they are today. The more we do today, obviously, have immediate effect on performance and what drops to the bottom line, and that will only, we believe, get better with a higher average reimbursement, but also with with more patients per rep average moving up.

30:19 Superior is your therapy? How's how superior is our therapy? Okay. When you look at our therapy, we we we demonstrate in both our randomized controlled trials in our real world data now, very large, you know, 3,000 plus patients, that we not only heal, we heal six times more effectively than standard of care, which is certainly better than other adjunctive, you know, advanced wound care modality. But we're the only one that can also demonstrate in both randomized trial and large real world data that we have as much as a six fold reduction in reoccurrence over twelve months or longer with over eighty percent reduction in hospitalizations and seventy percent reductions in amputations during that same time period. So we're very unique in the fact that we can deliver these through, and it's due to the multimodality intermittent cyclical pressure approach that we have that's unique to us. So very, very differentiated from other topical option therapies and other therapies in the wound care space.

31:16 K. So so there there's a couple of questions on recovering receivables from Arizona, and and I think, you know, that that particularly around sort of timing of of of recovery. I think it's really difficult to say timing. I think that we are confident of recovering that debt. It's a complex situation, and we're working with Arizona Medicaid to provide both coverage going forward, but also helping us to recover that debt as as as fast as we can. Okay. How do the reps ID the prospective patients? So the the what the the the reps we actually call our sales reps, not sales rep, we call them wound care consultants. We take a very consultative approach with the clinicians.

32:03 So in the various types of call points, wound which can be wound care centers where they're at outpatient centers where patients are coming in to be treated for their wound, whether diabetic or vascular venous related, or in long term care facilities or facilities where these patients reside with wounds. We work with the various caregivers, you know, and there's a broad array of people associated with wounds from different types of surgeons to, you know, podiatrists to, you know, nurses and advanced nurse practitioners. And we work with them, you know, for them to identify patients that they believe have failed to heal with standard care. And if the patients are not progressing to healing with standard care, that's when advanced modalities are warranted, and that's certainly the criteria within CMS' coverage determination. Now they have a choice of what they can use. You know, they can use negative pressure. They could use skin substitutes. They can use full body, big chamber hyperbaric. Or now moving forward in Medicare, like in other sectors, they can use our therapy.

32:59 They they would then decide to order the therapy. So what we do is we engage those prescribers. As you can imagine, you get a new prescriber, a new clinic, and they give you a couple of patients to test you out. It's our job to demonstrate those outcomes and performance on those patients. If we do our job right, the patients heal, clinicians are usually astounded by the progress and the durability of Healy, which means they want to give you more patients, and it grows from there. That's how you take someone who's who's new to the therapy, make them with the doctor, and then demonstrate to them what the therapy and what the company can do, and then they become a sticky prescriber that wants to give you more patients. Mhmm. Do wanna talk about the value? Yes. So there was a question regarding the value based trial that we announced. So this is our state of the art RCT of the same quality as we did on DFUs for venous leg ulcers, which are another indication.

33:52 Now I wanna make it clear from a regulatory of both, you know, CE Mark and, you know, MDR and also FDA, regulatory clearance, we're clear to treat any acute and chronic wound. So we're not earmarked, you know, just for diabetic foot ulcer, although that's a lot of focus. Venous leg ulcers, treat many of probably as much as fifteen percent of the patients we treat are venous leg ulcers today in The US. We also have very strong evidence. You know, we have controlled studies, you know, looking at venous leg ulcers and showing significant healing and reductions of pain and and durability of healing. And the very recent study we mentioned, that is 3,100 patient study, real world study, had in it six hundred and sixty odd venous ulcers in world, one of the largest studies done in venous ulcers ever, demonstrating the same durable healing efficacy. But we are to have evidence of the same quality, the same double blinded placebo controlled randomized trials conducting what we call the value study, which is looking at the same outcomes of venous ulcers.

34:48 Where it sits at the moment, we're still in in the validation stage of the protocol. So we have a a limit number of of key opinion leader sites where we're fine tuning the protocol and the delivery of it. And our expectation is is to expand sites aggressively across 27 so that we can then complete that study and get broader coverage indications with CMS moving forward that will widen, the opportunity for the business even further. K. So what percentage of patients failed standard therapy? So if you look at DFUs, and if you look at our analysis of the market opportunity, the the the significant amount of data out there shows that at least forty percent of diabetic foot ulcers do not heal with standard care.

35:35 Now so, you know, that and that's how we've calculated our market SOMS and SAM numbers on. So not not taking all patients, the difficult ones. Now the reality is out of the wounds that heal with standard care or even advanced care, you know, forty percent of them reoccur again at one year, and sixty five percent of them reoccur within five years. So the way they're being healed at the moment does not produce good quality tissue, does not produce better blood supply. So even though you heal them, they tend to break down and off to the races you go again. So it's a reoccurring, you know, circle of of suffering and cost and resource utilization. What's unique about ours, we not even only heal them sick times more effectively. You know? So so but we heal them in a way, with better generating breath quality, collagen, and tissue, more blood supply feeding it, blood vessels feeding it. So it's more sustainable. It's more durable, hence, the lower recurrences that we see. And we see if you if you've seen, you know, forty percent to sixty percent over five years, we're showing, reoccurrence rates, you know, in the low single digit percents with our therapy, you know, over twelve months and longer.

36:40 That's great, Mike. Jayesh, if I may just jump back in there, and thank you for addressing all those questions from investors today. But, Mike, before we direct investors to provide you with their feedback, which is particularly important to yourself and the company, could I please just ask you for a few closing Yeah. I I think, you know, for people to understand it, you know, the the wound care space is quite complex. It's been sadly, you know, you know, had had lot lots of challenging issues and certainly a lot of focus on it from from, abuse and and use in The US from from various approaches that have been applied. We're very different to that. We we're a company based on evidence, and we're differentiated by the fact we deliver long term outcomes. We not only do it in clinical trials, but we have a platform and and a a process that allows us to do that with every patient every day.

37:26 So we differentiate ourselves clinically and in the way we do our business and the outcomes that we deliver to the system. And with the broader coverage now in process with the Medicare coverage determination that's being being published and as it completes itself, we the opportunity now expands 65 fold from what it was prior to that, and and it's just a process of time for it to open us and us being able to to execute against that. So it's very exciting time for the companies, and and we're we're delighted in the progress that we've been making. Fantastic. Thank you once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you all.