Good morning, and welcome to the Q3 2019 Evolus Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr.
Ashwin Agarwal. Please go ahead, sir.
Thank you, operator, and welcome to everyone participating on today's call. This call is also being broadcast live over the Internet at evolus.com, and a replay of the call will be available on the company's website for 30 days. On today's call are David Moatazedi, President and Chief Executive Officer Lauren Silvernail, Chief Financial Officer and EVP, Corporate Development Mike Jafar, Chief Marketing Officer and Rui Avelar, Chief Medical Officer and Head of R and D. In our remarks today, we will include statements that are considered forward looking statements within the meaning of United States security laws. In addition, management may make additional forward looking statements in response to your questions.
Forward looking statements are based on management's current assumptions and expectations of future events and trends, which may affect the company's business, strategy, operations or financial performance. A detailed discussion of the risks and uncertainties that the company faces is contained in its annual report on Form 10 ks, quarterly reports on Form 10 Q and current reports on Form 8 ks. Actual results may differ materially from those expressed in or implied by the forward looking statements. The company undertakes no obligation to update or review any estimate, projection or forward looking statements. Additionally, the discussion today will include non GAAP financial measures.
These non GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A reconciliation of GAAP to non GAAP results may be found in our earnings release, which was furnished with our Form 8 ks filed today with the SEC and may also be found on our Investor Relations website at investors. Evolus.com. And now let me hand the call over to David.
Good morning, and welcome to the Q3 earnings call. I'm pleased to share the results from what has been a robust launch of Jeuveau in the U. S. I'll start by saying we are operating in one of the fastest growing areas of healthcare. Medical Aesthetics is unique.
It's a cash pay market that values high touch customer engagement and premium products that deliver consistent patient outcomes. Within this space, neurotoxins are the largest segment with consistent high growth over the past 2 decades. With the introduction of Jeuveau, we now have the 1st neurotoxin in the U. S. With an aesthetic only focus, which we believe gives us a strategic advantage.
The consumer opportunity is significant and underdeveloped. About 1 in 10 consumers considering a neurotoxin are in the office today, and the penetration rate is on the rise with millennials over indexing in their interest to get treated. This is a favorable backdrop to building an aesthetic company. I'm pleased to share the impact we've made in our 1st full quarter on the market. As you know, the Q3 was focused on our Jeuveau experience treatment program or JET.
We believe JET to be the single largest experience program to hit the U. S. Aesthetics market. Through the strong execution by our commercial team, we involved over 5,000 accounts in JET and shipped on average more than 10 vials per account. The result of this effort was the placement of over 50,000 vials of Jeuveau in the market through the month of August.
Considering the volume of trial product in the market, we were pleased with the rapid conversion to order placement. We finished the 3rd quarter with $13,200,000 of net revenue, up from $2,300,000 in the 2nd quarter. Since launch, we have established a broad base of over 2,000 accounts ordering Jeuveau. During the Q3, reorders represented an increasing portion of our revenue mix with a steady increase of new accounts persisting month over month. As we look back on the quarter, we are pleased with the launch results.
Jet accounts drove greater than 90% of our revenue and catapulted Jeuveau into the number 3 U. S. Unit share position for Q3. This is based on the GuidePoint September U. S.
Neurotoxin industry tracker. I'm pleased with the strong execution across the company and resulting uptake of Jeuveau. Ultimately, we believe what differentiates Evolus is our focus around the experience for providers and consumers. Now I'd like to pass the call to Mike for more context around how we have designed the Evolus experience and our results to date.
Thank you, David. Since the loss of Jeuveau, we've injected a renewed energy into the largest category in medical aesthetics. We believe our approach is positively impacting the market. At launch, we set a purpose to make JVUX's experience delightful and achievable. That purpose drives our design orientation and influences every interaction we have with each and every customer and consumer.
Brand building is a journey. For us, that journey starts with a promise to eliminate friction and introduce transparency to this market. Our early track record shows how we are delivering on that promise. We entered the U. S.
Market with head to head Phase 3 study against BOTOX Cosmetics. Since then, we've received great end market feedback with the clinical performance of Jeuveau. JEVS survey results out to 120 days post treatment were presented at the American Society of Dermatologic Surgery, also known as AFDS. 76% of patients indicated that they are likely to continue with Jeuveau and 82% of patients indicated they are likely to recommend Jeuveau to a friend out to 120 days. Two important metrics giving us confidence behind the clinical performance and stickiness of Jeuveau.
Now beyond the clinical performance, we believe our highly specialized sales force coupled with a differentiated marketing strategy will drive new patients and convert existing patients. Our JET data in over 29,000 patients surveyed showed 74% of patients were previously treated with neurotoxins, suggesting an ability to convert existing patients onto Jeuveau. 26% were naive to neurotoxin, indicating Jeuveau has broad appeal to new consumers. Lastly, we set a goal to modernize the customer engagement with our proprietary Evolus practice app. Today, we not only leverage technology for operational efficiency, but more importantly, to enhance the customer's experience.
Over 70% of orders are processed through the app with a 98% satisfaction rating. The combination of a highly specialized sales force and our technology platform is proving to be an effective and competitive model. Now shifting gears to the consumer, we are pleased with the results from our brand building activity, starting with newtalks. The virality of this hashtag was designed to accelerate brand awareness and truncate the consideration process, again eliminating a friction point. We are well on our way to building a recognized brand.
Jeuveau has been featured in major beauty books, including Allure, Vogue, New Beauty, among many others. We generate over 330,000,000 media impressions to date and averaging over 70,000 monthly visits to our website. More importantly, since launch, we've added nearly 100,000 consumers to our CRM database. We know brand building is a journey, and we're committed to building Jeuveau into a differentiated experience. We're off to a strong start and excited to share our future plans in the coming quarters.
Now let me pass the call over to Lauren to comment on our financial performance.
Thank you, Mike, and good morning, everyone. I'd like to highlight the financial progress we've made over the past two quarters. On May 15 this year, we launched Jeuveau in the U. S. During the Q3, our first full quarter on the market, Jeuveau net revenue was $13,200,000 more than a fivefold increase over Q2 2019.
As David and Mike discussed earlier, we are very pleased with the quality of revenue generated to date from more than 2,000 accounts, largely driven by their positive experiences during JET. The distribution of this growing number of accounts includes the full spectrum of U. S. Aesthetic neurotoxin customers demonstrating the broad appeal of Jeuveau across customer types and consumer age groups. Moving down the P and L, in the 3rd quarter, gross margin increased to 72% compared to 71% in Q2 of this year.
Non GAAP operating expenses for Q3 were $29,100,000 $3,800,000 lower than the Q2 of 2019. Non GAAP operating expenses exclude $5,500,000 in non cash items such as stock based compensation, royalty revaluation expense and depreciation and amortization as detailed in our press release. Net loss for Q3 was $27,000,000 compared with $37,600,000 for Q2, an improvement of $10,600,000 which was mostly driven by increased Jeuveau sales in Q3. At the end of the third quarter, we had approximately $74,000,000 in cash, cash equivalents and short term investments compared to 100,000,000 dollars at June 30, 2019. This change in cash is primarily driven by the U.
S. Launch of Jeuveau, including $6,500,000 used to purchase inventory during the quarter. These cash outlays were offset by $9,600,000 of cash receipts or collections in Q3 from Jeuveau sales net of consumer coupons and customer rebates. Our existing cash and investments are expected to fund our operations for at least the next 12 months. In addition, we have $25,000,000 available to us from our Oxford credit facility upon achievement of certain milestones.
Overall, I am pleased by the significant financial and operational achievements by the Evolus organization this year. I'd like to thank the Evolus team for their strong contributions and dedication. Sales are growing, cash collections are strong, our investments in the launch of Jeuveau are paying off and in particular, our technology platform is enhancing our operational efficiency by speeding up and simplifying the order to cash process. In short, we're off to a very strong start as a newly commercial company. And with that, I'll turn the call back to David.
Thank you, Lauren. A few comments before we close the call and open up for Q and A. In addition to a successful quarter and launch of Jeuveau in the United States, we've achieved several milestones on the international front. 1st, in the Q3, our partner Clarion successfully readied the market for the commercial introduction of Nuceva, which we jointly announced in October. In addition, our R and D organization delivered our last major market approval with the approval for NOCIVA in the European Union.
This approval opens access to 31 countries across Europe with a label that includes duration out to 139 days. We look forward to commercial launch in 2020. In closing, I'd like to thank the thousands of customers who've partnered with us to introduce Jeuveau and create a new experience for their patients. I would also like to thank each and every employee for the outsized impact they've had since our launch. As a result of our strong Q3 performance, we have greater confidence in our goal of achieving the number 2 unit share position within 24 months from launch.
With that, I'll turn the call over for Q and A. Operator?
Your first question comes from the line of Louise Chen with Cantor.
Hi, congratulations on a great So my first question is for David. David, what excites you the most about your 3rd quarter results? And then how do you extrapolate that when you think about Q4 2020? 2nd question I have was, is Q3 2019 a good base to grow off of when we try to forecast Q4 2019 2020? And then the last question I have is how close are you to that number 2 unit share?
Any metrics you could give us would be helpful there. Thank you.
Great. Good morning, Louise. Thanks for the question. I'll start with the performance in Q3. And just broadly speaking, look, the launch is off to a fast start.
Even if you look back to Q2, we enrolled in JET at a faster pace than we expected, and we closed the JET program early and got into 5,000 accounts when we had a goal of getting into 3,000. In the Q3, as you know, Jet ran through the month of August. And so despite the fact that the field was focused on both efforts, Jet as well as pull through in the quarter, we saw a significant amount of our customer base beginning to place orders. So overall, we feel very good about the base that we delivered in Q3 and the health of that customer group. It's diverse, it's broad, it's representative of that mix that we saw coming out of Jet.
Separately, I continue to be pleased by the operational rigor that we have across the organization. You heard a bit from Lauren about the financials and how we are very careful with our spend. We track ROI on every activity that we deploy. Our gross margins are healthy and there's great efficiency in the business model that we've structured that we believe as we get to greater scale, you'll start to realize the value that, that platform can create for us. And then lastly, across the organization, there's a heavy focus around execution.
We want to demonstrate that through performance quarter on quarter. But whether you look across the R and D group, where we've achieved all major milestones around the world today in our approvals, the execution around the launch with the sales force that formed just about 6 months prior. Across the board, we have a heavy emphasis on that execution, which we believe will continue to yield value over time. As it relates to how close are we to number 2, look, we outlined this as a 2 year endeavor, and we're now just finishing our 1st full quarter. We want to make sure that we don't get too far ahead of ourselves.
We feel good that we're on a trajectory to get to that number 2 position, but we still feel that 2 year time frame is the right time frame to be thinking about this launch.
Okay. Thank you.
Your next question comes from the line of Greg Fraser with SunTrust.
Thank you. Good morning folks. This is Greg Fraser on for Greg Gilbert. I'm
not sure
if I missed this, but what is Gevo's estimated volume share now?
Hi, Greg. We haven't disclosed the specific volume share. It obviously will fluctuate month over month. So we've said that we're in the number 3 position in the category. So you should assume that's less than a 10% share and north of about 5 percent and we bounce around in that range here for the last several months.
Got it. Okay.
Do you
have a sense of how physicians are setting the price for Jeuveau relative to what they charge for BOTOX?
Yes. So as you know, we launched Jeuveau at a slight premium in pricing to the market leader and we have seen that the product has been priced at parity to the consumer relative to other products. Of course, you'll see specials in different pockets when they first bring on the product. But largely what we're hearing from doctors around the country is that it will be price to parity.
Got it. Okay. And then you mentioned feedback that the sales force is giving and the feedback has been great. Has there been anything negative that you've heard at all?
Yes. So look, we feel great about the way the product is launched out in the market, right? The overall enthusiasm around the product through Jet and the pull through in ordering has been very strong. And we like what we see out there with what customers are telling us with their experience with the product. So we haven't if you're asking have we changed course in how we're operating, the answer is no.
But of course, it's a competitive environment. So we're always observing what types of activities we could deploy in the market. Our competitive set has a broader set of programs out there. We're consistently asked about our loyalty program. And of course, we'll introduce that next year as we build out our capabilities.
Those are some of the questions we commonly get in the field, but I'm going to look over to Mike. Mike, if you want to add some additional color around what we're seeing.
A lot of positive energy around the product. As expected going into the product data set that we have and personally I've been part of many product launches and to be gifted the data set that we got out of our Chief Medical Officer really with a head to head trial against the market leader was a blessing for our sales force and to have that published in ASJ, the time of launch was really a feather in our cap. So the confidence going into the product was high based off the clinical performance. And when we step back looking at this, now we're nearly 5 months out and we look at it at scale, we have over 50,000 patients on the product. We have about 46,000 patients surveyed, 29,000 patients actually completed the survey, up to 120 and now 150 days.
And the performance of the product is as expected as you would expect for the 900 ks Delta product. So we're really pleased with what we're hearing.
Great, that's very helpful. And then our last question is just on SG and A. It's been came down a bit from the launch quarter. How should we generally think about SG and A spend going forward? Thank you.
You bet. This is Lauren Silver now. Good morning. I think as you look at our spend over the last two quarters, it will vary as we have different marketing programs. And so as you look out to Q4, what we've spent in 2nd and third gives you a pretty good range of what we're looking at.
Great. Thanks.
Your next question comes from the line of Annabel Samimy with Stifel.
Hi, guys. Thanks for taking my question. Congratulations on a really strong quarter. So just want to get maybe a little bit more granular. You have about 2,000 over 2,000 jet accounts ordering, I guess, suggesting about 40% conversion.
Can you give us a sense of how many of the accounts still have to make it through all the three stages of Jet? I know it ended in August, but is there any Jet promotional material still in the channel? And do you still expect big steps up in conversion? Essentially, what's going to drive conversion if they haven't already converted in there through the program? Is there anything else that you're driving to drive that initiative?
Sure. Great question, Annabel. I'll make a couple of comments on the performance of Jeff that we've seen thus far, and then I'm going to ask Mike as well to provide his. First off, we were thrilled to see several 1,000 accounts already ordering in the quarter. As you can imagine, if you were enrolled in JET sometime in the second quarter when we launch, call it from mid May to the end of June, you had obviously more time in the Q3 to work through that product than if you were enrolled in the July August timeframe.
And so I'd say it's a tale of 2 quarters when you think about JET. We're not going to provide any more granularity around what that pull through looks like, but I would just say that we feel very good about the pull through levels that we're seeing, the engagement we're seeing from accounts. And then of course, we don't expect 100% of them to convert over from accounts enrolled in Jet to purchasing. But the one read through that I will say is when you think about the 2,000 accounts that have placed an order, this isn't this may be just their initial order, but it's not the first time that they've received product. That first order that they're placing for revenue product is a vote of confidence in how the product performed through Jet, given that Jet had 2 to 3 shipments before they placed their first revenue order.
So as you think about that base, we do believe it's sticky moving forward into the Q4 and one that we'll continue to build from. I'll turn it over to Mike for additional color on Jet.
Hi, Annabel, it's Mike. Thanks for the question. If you step back and look at the purpose of Jet, JET was designed to get us at scale rather quickly in a short period amount of time. We got to 5,000 accounts. We expected 3.
So very pleased with that initial uptake. To take a product on in this category is not taken lightly. There is consideration around pricing, introduction, loyalty, programming and so on and so forth. And some customers are early adopters, as you would expect with any traditional kind of customer adoption curve, and some customers are late adopters. As you know, we ran JET into August, which means that laggard in that group and that cohort customers that came in, in August is probably still worth making their way through the inventory that they received.
And the early adopters obviously drove a good portion of our revenue. But if you were to step back and just look at the broader market, we are reaching high value customers. And if you again go back to the customer adoption curve, about 15% of customers in that curve would be considered early adopters and about 34% of the customers are considered the early majority. We're well on our way into the early majority. Our focus now is to get into the late majority and the broader customer set.
So things are
looking really good from an adoption standpoint.
Okay, great. And if I can follow through with a couple more. So how much do you think you're contributing to market growth, 25% or 26% rather now of new patients seems like it's above continuing to be above market average for new patients coming in. So do you from that can you off this question, but maybe you can help us give us some statistics around how much of the coupon is being used. Is it being used?
Is it being hoarded by accounts to sort of generate promotional materials and sort of drive their own businesses? Like do you have any sense of how the coupons are being used? Thanks.
Yes. On market growth, like you, we're consistently trying to triangulate what we think is occurring in the market. I can tell you that there's 2 things we see. Of course, you mentioned the JET survey, where we're seeing a quarter of the patients being new to neurotoxin. In addition to that, we spend a lot of time in the field.
Mike referenced the ASDS meeting. I've been in several major markets just over the last several weeks with customers. And I can tell you that the noise level around this category is at an all time high. The customer engagement in this space is also high as a result of our introduction and the competitive activity that we're seeing deployed in the market. These collectively give us a lot of confidence that the market growth has accelerated.
Of course, we don't have visibility to what our competitors have done within the quarter as it relates to revenue. But we do feel very good about the fact that our contribution to new patients in this space is playing a key role in this. And when you look at all the marketing collateral and Mike will talk a little bit about just the actual performance metrics on the consumer side, It's hard to believe that it hasn't accelerated meaningfully, but it's hard to put a number on that.
Yes. In terms of the coupons and just the broader consumer activity, we're really pleased with what's going on. We've been out the entire management team all the way down to the sales force has been And the excitement of what we're bringing in, in terms of changing the language and the dynamic in the space is truly fueling growth within the practices. In terms of the coupons and your question around the coupons, it's really a mixed bag. You have some customers that don't like to ever discount the product and they perceive a coupon as a discount and they don't want to train their consumers as such.
And they won't partake in traditional loyalty programs or couponing. That's very traditional for their practices. There are some customers that use it as a crutch. They don't know how to sell. And obviously, the entire industry's goal is to help customers convert patients and understand how to sell in this space, And they'll use couponing for conversion purposes.
And then there are those that bundle it with broader deals. They like to have minimums. They like to put it in with their own flavor of the month and whatever promotion they're running in the month and they like to tailor it. At the end of the day, we provided a very simple executable program through our technology platform. You simply text Evolus the word 75 now and it unlocks a $75 gift card to be used on your Jeuveau treatment.
That frictionless kind of execution is really helping the adoption of the program and the Jeuveau.
Great. Thanks a lot.
Your next question comes from the line of Donald Ellis with JMP Securities.
Good morning. Thank you and congrats on the quarter. My question is about the Q3 versus the Q4 and the question was asked before, but I didn't really understand the answer. Was there any kind of load in the Q3? Asked another way, is there any reason not to expect reported total revenue in the 4th quarter to be above the $13,200,000 you reported in the 3rd quarter?
And then my second question is when would you when should we expect Canada and Europe to contribute meaningfully to revenue sometime in 2020 or later? Thanks.
Sure, John. I'll take the first part. I'll ask Lauren to add some additional color on performance and then as well as the international question that you had around Canada and Europe. So look, as you know, Don, we're not guiding. It's too early in the launch to do so.
We do have a lot of confidence in the base of accounts that placed an order in the Q3, and we feel that base is a sustainable one moving forward. As you read in the press release, we talked a bit about the continued increase, steady increase of new accounts placing orders that we observed throughout the Q3. In addition, we talked about the increase in reorder rates that we observed as the quarter progressed. Those reorder rates represented an increasing amount of our overall revenue mix. Both are very strong metrics that we believe put us in a position of strength going into the 4th quarter.
I don't want to comment on any of the 4th quarter activities or guide in any way there, but I'm going to turn it over to Lauren to provide more color.
You bet. Hi, Don. Good morning. With regard to the Q4, it is the strongest quarter in the business, in the neuro toxin business every year. And so that trend will certainly play for us.
We are growing very rapidly, and we do expect Q4 to be higher than 3rd. The drags on that will be, of course, the jet inventory that's still a little bit in the channel. And so while we anticipate growing in the 4th quarter, I think it's important to think through those pluses and minuses as you look at revenue for Q4, but definitely higher than 3rd is our thought at this point. Your other question was on international. With regard to international, Canada just launched this month.
So we're in the very early days of that. When we look at the amount of money we make selling in the U. S. Versus internationally, there's just no comparison. So it will be a long time before international is a big mover on our P and L.
That said, it's still all very positive for us and does contribute to the bottom line. And then Europe is expected to launch in 2020. We'll have timing on that as we work through all the strategies and potential partnership opportunities.
Great. Thank you.
Your next question comes from the line of Douglas Tsao with H. C. Wainwright.
Hi, good morning. Thanks for taking my questions. Just in terms of the launch, obviously, we've seen 2,000 accounts order. There were 5,000 accounts that participated in Jet. So it's safe to assume that the 3,000 that haven't ordered are presumably, for the most part, still working through their jet.
So do you have a sense of whether that will take place or they'll sort of work through that jet inventory during the Q4?
Yes. So I think you're thinking about it in all the right ways, So we clearly engaged a broad set of customers. We don't expect once we complete the Q4 that we are going to be sitting here at 100% conversion from jet to ordering. The pace by which accounts are going to go through it, their engagement level is going to vary. I think Mike did a nice job of just in any category where you launch, you're going to have an adoption curve.
And the question is how fast are you moving through that curve. In the Q1 on the market where you had a combination of jet activity and pull through, you're seeing that we move clearly past the early into the early majority very quickly. And that gives us a lot of confidence that the 4th quarter will continue to see a strong rate of these accounts moving from jet to ordering. We're watching that number obviously closely. That's a focus for the sales force, for the management team and internally, and we feel good about the metrics that we're seeing.
I don't want to guide in terms of where we think that's going to close out by year end.
Okay. Fair enough. And then just in terms of the accounts that are ordering, do you know what percent are participating or those orders are coming from accounts that are participating in the new TOX NOW program?
Jack, I could jump in on this one, Doug. This is Mike Jafar. Our NuTalk Now program, as you know, is one that's scaled across the country. We advertise the new talks now program to anyone and everyone on social media, which means whether you're in jet or you're not in jet, a consumer has access to that program and can go in and pull product off the shelf by way of that program. Obviously, with 90% of our revenue coming from accounts participating in Jagged, you'll assume that there's a high level of participation of the NuTox Now program associated to that, and that's just a linear relationship.
But the program is accessible to anyone across the country.
Okay, great. Thank you so much.
Thanks, Doug.
Your next question comes from the line of Samir Kandola with Wells Fargo Securities.
Hey, good morning. Is there anything that has surprised you on the launch of Jeuveau thus far? Also, is the AbbVie Allergan deal causing any sort of disruption in the marketplace that you would say is possibly helping the uptake of Jeuveau?
Sure. I'll comment here and then I'll put up to Lauren and Mike if you want to add any color. As it relates to surprises, look, we've been consistently pleasantly surprised about the launch. In fairness, 6 months ago, if you mentioned the name Jeuveau in the U. S.
Market, the awareness of our company or the product was very low. Today, this is a brand that's recognized in the market. Doctors in the space are in some form of consideration, whether they see it as a further out idea or they've started using this product as their go to toxin in the market. We did not expect this level of penetration in such a short window of time. I think it speaks to 2 things.
Number 1, there hasn't been any competitor in the space in nearly a decade and we didn't take the traditional go to market approach that you've seen with the 2nd and third player. Everything from the hashtag new talks, branding elements to the way that we hired a sales force with 80% aesthetic experience and the way that we operate. It's a small company and the management team spends a great deal of amount with these customers. There's personal relationships, there's a lot of listening and there's the ability for us to adapt around the customers' needs. And I can tell you that, that in itself matters a lot.
Their voice is one that they want to be heard and we certainly give them the platform to help shape this company. They are accounts that have been in this aesthetic space for many years and they've seen the consolidation that comes over time in that space. And with consolidation, your voice is certainly not the same as it was when it was a small company in the aesthetic space prior. And so we think we bring some of that renewed energy back to this market by operating in a way that is very customer centric and friendly to these small practice owners and we understand the space. So collectively, I guess, we feel good about where we are.
We certainly don't want to get ahead of ourselves. We take it one day at a time. In fairness, we're not 6 months yet into our launch, but we feel like we're on the right path.
I think from a financial standpoint, I've been very pleased with the financial progress of the business. In terms of our ability to turn orders into cash, it's been quicker than we had originally planned. That will certainly continue to grow and change over time, as David said, it's very early days. Secondly, the return on our investments in social, digital and media, which have been very low on a dollar amount, have yielded more than $300,000,000 impressions to date. So the virality that Mike talked about, I think those from my perspective were the 2 biggest pleasant surprises.
Probably surprise is too strong a word, but just pleasant things that occurred in the business.
Thank you. And then on the AbbVie Allergan deal, are you seeing any sort of disruption?
Yes. I really have nothing to comment on as it relates to that transaction. I think you know that both the number one player and the number 2 player have been going through a transaction this year. We've been focused on our launch. We clearly have our work cut out for us regardless of the market environment.
But I'm sure you get some more color as they report out on their earnings.
All right. Thank you.
At this time, I am showing no further questions in the queue at this time. Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may now disconnect.