Earnings Call: Q2 2021

Jul 29, 2021

Good morning, and welcome to Establishment Labs' 2nd Quarter 2021 Earnings Call. As a reminder, today's call is being recorded. I will now turn the call over to Raj Denhoy, Head of Strategy and Investor Relations, please go ahead. Thank you, operator, and thank you everyone for joining us. With me today are Juan Jose Chacon Quiros, our Chief Executive Officer and Rene Galera, our Chief Financial Officer. Following their prepared remarks, we'll take your questions. Before we begin, I would like to remind you that comments made by management during this call will include forward looking statements within the meaning of federal securities laws. These include statements on Establishment Lab's financial outlook and the company's plans and timing for product development and sales. These forward looking statements are based on management's current expectations and involve risks For a discussion of the principal risk factors and uncertainties that may affect our performance or cause actual results to differ materially from these statements, I encourage you to review our most recent quarterly report on Form 10 Q and other SEC filings, which are available on our website at establishmentlabs.com. As a reminder, Establishment Labs received an investigational device exemption from the FDA for Motiva Implants and is undergoing a clinical trial to support regulatory approval in the United States. We continually seek to expand the geographies in which our products are regulatory approved. Please check with your local authority for specific product availability. The content of this conference call contains time sensitive information accurate only as of the date of this live broadcast, July 29, 2021. Except as required by law, Establishment Labs undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call. With that, it is my pleasure to turn the call over to our CEO, Juan Jose. Thank you, Raj, and good morning, everyone. I hope everyone is healthy and continues to remain safe. I'm pleased once again to be able to report a record quarter with 2021 second quarter revenue totaling $32,000,000 2nd quarter revenue increased 205 percent over the Q2 of 2020 and was up 5% sequentially from the Q1 of this year. Our continued strong sales results show that a singular focus on women's health, innovation based on science The track record of over 10 years of excellent clinical and aesthetic outcomes with Motiva Implants can drive significant share gains. It is not by accident that we remain on track to achieve the dominant share position in our industry. And as our story continues to resonate with Surgeons and most importantly with women, we expect to continue to post strong results. With the strong momentum in our business, We are raising full year guidance for 2021 to a range of $122,000,000 to $126,000,000 This is an upward revision from the previous guidance of $118,000,000 to $122,000,000 we provided with our Q1 results. This updated outlook represents growth of 44% to 49% over 2020. This updated guidance captures our continued momentum, including strong underlying market demand and our capturing of share in geographies around the world. While the pandemic continues to create some unusual quarter to quarter volatility and more pronounced seasonality is a consideration over the near term in our business, We are confident that our market share gains will continue as countries open up, thanks to vaccination campaigns all over the world. As always, and especially with the impact of COVID, we will continue to take a conservative approach to guidance. Renee will provide additional detail on our Q2 performance and updated outlook in a moment. Before I turn the call over to her, I would like to highlight several recent events and provide an update on the key initiatives. On June 21, a paper titled, The Surface Topography of Silicon Breast Implant Mediates the Foreign Body Response in Mice, rabbits in humans was published in Nature Biomedical Engineering. This paper was authored by a group of researchers at MIT and focus on determining the optimal breast implant surface that is most biocompatible and that induces the least amount of inflammatory response. The researchers were led by Professor Robert Langer, 1 of 12 institute professors at MIT and among the most published, cited and decorated engineers in history. He is a scientific co founder of Moderna and on top of that He has been cited over 326,000 times and is an author on more than 1500 published articles. He was joined on the paper by a distinguished panel of researchers from MIT, MD Anderson, Johns Hopkins, Rice University, Baylor College of Medicine, the University of Manchester and the Medical University of Innswerk. The study showed that the patented Motiva Smutsil surface Significantly reduces the foreign body response compared to implants with higher degrees of roughness or completely smooth surfaces. The researchers looked at the tissue capsules formed as well as the expression of immune and inflammatory markers in both animal models and human tissue samples. The SmoothSilk Surface was consistently shown to be in the sweet spot of inducing a healthy capsule, but also limiting the amount of inflammation. As Professor Langer said about the study, the smooth silk surface was superior in minimizing inflammation and excessive foreign body response. He went on to say that determining an optimal surface is a significant step for the medical device community towards designing safer And more biocompatible implants, which can reduce patient complications. The importance of this paper is hard to overstate. Nature Biomedical Engineering is a well recognized and respected journal in its field, and the Nature journals are among the most demanding in terms of the review process. The findings of this paper add more links to a change it spans from the inception of our Motiva Implants over a decade ago And the technology we purposely designed into them to the consistently positive real world outcomes seen by surgeons and patients who use them. It is not by accident that our implants consistently show excellent outcomes and the work by Doctor. Langer's team and others Are adding to a body of evidence that is increasingly hard to ignore. The rigorous science and clinical data Behind Motiva sets us apart from the competition and our strong sales results show that this message is resonating more and more with Surgeons and with women all over the world. On MotivaMia, our minimally invasive breast enhancement procedure, We announced in April 27, the completion of our 100 patient Motiva Mia IRB approved study in Costa Rica. We continue to perform cases that reaffirm our belief that this approach will transform breast aesthetics. As a reminder, Motiva Mia has the potential to make breast enhancement appealing to many women who previously had not considered breast aesthetics. The positive feedback from surgeons from different regions who have used the technology supports our view that MIA will expand our total addressable market. As a reminder, our initial estimate of the global total addressable market for EMEA is 1,900,000 procedures per year, which is larger than the current total market. Regulatory clearance in Europe for the tools that are part of the Motiva EMEA system Remains on track and should allow for a planned launch in 2022. Motiva Flora, our Noble Tissue Expander has begun limited commercial sales With a first of its kind non magnetic port, FLORA allows for MRI imaging during the time an expander is used after mastectomy. Fluora has the potential to also improve clinical outcomes by changing the way women are treated for their cancer. By being non magnetic, Fluora opens up a new paradigm for radiation oncology planning and we have several projects and studies underway to help define how Fluora can improve cancer treatment During this critical stage in a woman's journey to recovery, FLORA is one part of a long term strategy to make breast reconstruction not only safer, but also to create a new standard of what we call aesthetic breast recon, with the goal to provide similar outcomes for breast reconstruction in aesthetic patients. The clinical benefits that come from offering better alternatives is an important part of our women's health mission. In many countries around the world, Less than 10% of women have breast reconstruction after a mastectomy and there is a real opportunity to move this number meaningfully higher. Our Ergonomix II rollout continues in several select geographies. The Ergonomix II platform builds upon our flagship Ergonomix implant and offers enhanced mechanical properties, advanced chemistry and improved ergonomics, all of which we believe will result in even greater patient satisfaction and justify a price premium. Our clinical and commercial efforts in China are ongoing and we continue to make progress in the regulatory process. Our plan is to launch Motiva in this market in 2022. Our regulatory timelines for U. S. Approval also remain unchanged. In August of this year, the aesthetic cohort will pass the 2 year mark. We continue to enroll patients in the remaining reconstruction cohort of the trial. And as a reminder, we have fully completed the revision reconstruction cohort. Lastly, I want to highlight several recent additions to the team at Establishment Labs. In May, we announced that Prateep Dasidhar joined as Head of Global Operations. He's also overseeing our digital transformation initiatives. Pratip's experience in transforming and scaling business processes at such companies as ServiceMaster, Salesforce, Amazon, HP and others will be invaluable as we continue to expand our revenue base. In June, we announced that Nita Toprani joined as our General Counsel and Corporate Secretary. She came to us from Zimmer Biomet. I can tell you that her contributions and insights have already been significant in the short time she's been here. We also announced in June The hire of Heather Brennan as our Head of U. S. Commercial Operations. She joins us from MTF where she worked for the past 13 years, Most recently as a General Manager of their Plastic and Reconstructive Surgery division. Heather is very well respected in our industry And among the plastic surgeon community, she is already deep into planning our strategy as we prepare to enter the U. S. Market. Of course, As we announced earlier this month, this is Rene Gaeta's last earnings call with Establishment Labs. She is leaving us CFO, Raj joined us in February from Jefferies and his background and experience make him a natural choice to support our continued growth. He has a deep understanding of our business and he shares my passion to transform our industry by focusing on women's health and wellness. I have enjoyed working with him the past few months and appreciate him taking on this important role in our company. I will now turn the call over to Renee to cover our financial results. Thank you, Juan Jose. The significant momentum in our business carried into the Q2. We saw strong growth again in sales to a new record level And our operating expenses and cash are being managed effectively. Total revenue for the quarter was $32,000,000 Direct sales were approximately 44% of this total, while distributor sales which can fluctuate based on changes in inventory levels And the timing of reorders made up the balance. From a regional perspective, sales in Europe comprised approximately 45% of global sales. Asia Pacific and Middle East was 30% and Latin America made up the balance. Brazil, which is our largest single market Globally accounted for 7.7 percent of total quarterly sales. Our reported gross profit for the 2nd quarter was $21,500,000 Or 67.1 percent of revenue compared to $7,200,000 or 69.1 percent of revenue for the same period in 2020. The change in gross margin was the result of regional mix returning to more normalized levels as well as increased production volumes. Our gross profit this quarter improved from 66.2% reported in the Q1 of 2021. Average selling prices in the Q2 were up slightly from the Q1 of 2021. As we have seen in the last several quarters, there will be fluctuations in gross margin. We continue to believe that the best way to gauge our progress This is on an aggregate basis over time and we are comfortable with gross margins in the mid-sixty percent range over the near term. SG and A expense for the Q2 increased approximately $7,300,000 to $21,800,000 compared to $14,400,000 In the Q2 of 2020, the increase in SG and A in the Q2 resulted from the normalization of business practices following disruption from the global pandemic in the year ago period. Our R and D expense for the Q2 increased approximately $2,000,000 from the same period In the year ago to $4,300,000 R and D expense also returned to more normal levels this quarter and will fluctuate quarter to quarter based on the timing of clinical trial and other expenses. Total operating expenses for the second The increase this period was again due primarily to the normalization of spending relative to a year ago. Net loss from operations for the Q2 was $5,300,000 compared to net loss of $10,500,000 in the year ago period. Our cash position remains strong at $76,800,000 as of June 30, compared to $84,500,000 on December 31. We are raising our annual sales guidance for 2021 to a range of $122,000,000 to $126,000,000 From the previous range of $118,000,000 to $122,000,000 the new range represents annual growth of 44% to 49%. In refining our outlook, we took several factors into consideration. There is considerable momentum in our business and we are taking share Globally, we expect this will continue. However, the Q3 could see more pronounced seasonality this year as surgeons and patients Take vacations after not being able to for the last year. In general, and especially during the current pandemic, we feel it is best to be conservative our outlook. As we look down the rest of the P and L, we continue to expect to see spending levels increase as we prioritize investments in a significant number Development and commercialization programs we have underway, preparing for entry into new markets and advancing our product pipeline with new technologies To drive future growth remains a top priority. However, while operating expenses tied to these initiatives will increase, We expect the efficiency programs we implemented over the past year will become more permanent part of our business practices. The increased efficiency as well as our strong revenue growth should result in our cash use continuing to trend down from pre pandemic levels even as we increase strategic investments. Overall, we believe our company is in a very strong competitive and financial position. Before I turn the call back over to Juan Jose for concluding remarks, I'd like to say that my recent decision to leave Establishment Labs Was a difficult one. As seen in our results, the company is in a very good financial shape and our outlook remains very bright. I firmly believe Establishment Labs will succeed in its mission to transform the lives of women around the world. However, As with many people coming out of the pandemic, I simply decided to make a change and to accept a position closer to my home. My time here has been great, and I want to thank Juan Jose and the Board for the opportunity to be a part of this amazing story over the past 4 years. Thank you, Rene. The record revenue we generated in the Q2 and recent developments in our industry Show again that ESTA is on the right path to be the leading company in breast aesthetics and reconstruction and we are preparing for the next chapter in this growth story, Fueled by our commitment to women's health, during the Q2, we announced a groundbreaking on our new Sulayam Innovation Center in Costa Rica. This new facility will house expanded research and development labs, the new state of the art media center and world class surgeon education and training facilities. The facility will also more than double our manufacturing capacity to over 1,900,000 implants a year, which is enough to more than half the current world market. I'm pleased to also announce that after his previously announced leave, Salvador Dada returned earlier this month I want to close by again thanking our outgoing CFO, Rene Gaeta. Rene has been with us through our IPO And through a time of significant expansion of our company. But more than that, she also is a good friend to me and everyone at Establishment Labs. You will be missed, Renee, and we wish you well as you embark on the next chapter of your life. I will now turn the call over to the operator for your questions. Thank you. At this time, we'll be conducting a question and answer session. Our first question today is from Matt Taylor of UBS. Please proceed with your question. Hi, good morning. Thanks for taking the questions. So I wanted to just ask one on market dynamics. You had a nice quarter. You're in so many countries. I was wondering if you could just give us some more color On how things are doing in some of those different geographies. Maybe you could characterize some of the ones that are still Seeing some pockets of disruption and how that could improve through the year. And then also would love some Yes. Thank you, Matt, and good morning. So we continue to see good recovery in Q2 And we do believe we are taking market share globally. We saw good growth taking place in Europe and Asia Pacific. Latin America was down sequentially, but we're not surprised. Brazil usually has a very strong Q1 and 2nd quarter is down usually from that and there was some small impact from FX. But overall, we're super happy about this quarter. It Shows that there's momentum to the business. We understand what's going on globally with regards to the pandemic and some of the challenges that it poses, But we continue to perform well and we're very happy with the way the team is doing all around the world. Okay, great. And then you talked about some more pronounced seasonality. Maybe if you could just talk about Any color that you have on the cadence that we should expect for Q3 versus Q4, if that's going to be different than we would see normally? Yes. We've always talked about aesthetics being a business in which you do have Seasonality in the Q3 and that is in normal conditions. Over the past couple of years between Our rate of growth, the addition of new geographies and the pandemic, it has been hard to compare. But normally You would see seasonality in Q3 and our guidance contemplates that scenario. 45% approximately of our business comes from Europe and these doctors and their patients We're going to take a vacation this year for sure. So that's part of that. But that is normal in our business. So we don't see it as a negative. We see it as actually a reflection that things are getting to a more normalized condition in the European market. Furthermore, I think that we are you're seeing the effects of all the work that we've been doing over the last few years with regards Science or innovation, we're launching new products as we speak into new lines like breast reconstruction, Continuing to work with EMEA. So we're nothing but super excited about the second half of this year. Yes, fantastic. And then maybe just one last one on MIA. I think a lot of investors are excited about that. Could you just give us more detailed and updated thoughts about How that initial launch could progress and when we should start to expect a ramp in the CE Mark countries from that product? Yes, of course. And we are continuing to prepare very carefully for this launch. We want to make sure and we have said this in the past that we do things correctly. This is an entirely new category within breast aesthetics. We have applied for the CE Mark for the tools that are necessary for Motiva EMEA And that is the Motiva injector and the balloon that are necessary for that minimally invasive approach. So we expect approval for that to take place before the end of the year, so we can begin our educational activities in Europe. And after that then in 2022, what you'll see us is working through a list of Centers in which we think we will be able to show how we can attract new patients that would normally not go For these type of breast augmentation procedures and that is the most interesting part about Mia. It's not only the fact that It's a price premium over normal breast augmentation, but the fact that you are bringing new patients. So our launch Is going to be directed specifically at showing that we can get different group of patients interested in breast aesthetics. The next question is from Josh Jennings of Cowen and Company. Please proceed with your question. Hi, good morning. Thanks. Thanks for taking the questions and congratulations on the first half of the year and the recovery. I was hoping, Juan Jose, to just Get a sense of how impactful you think the recent Langer publication on biocompatibility Motiva And the earlier in the year shear report, how impactful they've been to your direct and distributor sales efforts in In terms of driving conversion of new surgeon customers and how long do you think that the tail is from those two reports? And then My follow-up second question would just be, I mean, historically, you have transitioned from some markets from Distributors over to direct sales effort and any other territories or should we be expecting more movement In the next 12 to 24 months. Thanks for taking the questions. Thank you, Josh. Regarding the Langer paper, it is the strongest possible objective scientific evidence Why our implants perform better? And we're very glad that this took place and especially in a paper Like nature and it does confirm once again everything that we've seen In the market with over 10 years and now 1,600,000 implants out there over the last few years. And to us, it is once again a confirmation, but there are skeptical surgeons out there And we can't wait for the conditions of the pandemic to improve so that we can go and engage with them directly. Same thing with Shear. Shear just happened very recently. It has an impact because it is the first Scientific committee worldwide that creates a direct causal relationship between textured breast implants And this man made cancer called the ALCL. So to us, it is these two things will be part Of our strategy to capture new market share, but it's too early. We think that over the next few years, we're going to gain market share from all the things that we are doing, including This strongest approved with the Langer paper and definitely with the results of the share committee. So when you think about our growth, it comes from so many different places. Safety over time is one of those and these two things Definitely confirm that. But we are going to continue growing with the new initiatives like minimally invasive and breast Construction, so at this time we're not really looking at moving any markets from distributor To direct nor do we think we need to do so. Great. Thanks for those updates. The next question is from Chris Cooley of Stephens. Please proceed with your question. Good morning and thank you for taking the questions and congratulations on the record quarter. It's very impressive. Just 2 for me, if I may. First, Juan Jose, if you could speak to us a little bit about as you approach the European market with FLORA or I should say more specifically the reconstructive market in Europe with Flora, what do you need to do tactically that's different versus the approach the company has taken On the AUG side, I'm just curious here a little bit about the incremental investment that might be required, if there's additional data. Just help us think a little bit about that ramp and what it entails? And then secondly, for my follow-up, I'm just curious if you could comment as well just from a macro perspective. Clearly, we're seeing a rebound here in interest in breast aesthetics coming out of the COVID-nineteen pandemic, surgeons are extremely busy right now. I'm curious how much of this you think is a bit of pent up demand when we look at the growth rates in the broader market right now relative to just a step function improvement And just the overall interest in the procedure. I'm just trying to kind of tease out what you think is durable as we go into 2022 if we have a step up in the Organic growth rates that we've seen historically or do you see some type of reversion in the second half of next year? Thank you. Thanks, Chris. And just to answer both of those questions, I'll start with Flora. We are So happy that we can finally become a key player in the category of breast reconstruction. And the reason we took so long to enter that category is because we wanted to do so in a way that we can transform the State of the art in breast recon and we are doing so with Flora. Flora has so many different features that are Going to make a difference in breast reconstruction. So of course, the non magnetic nature of this device that is The fact that it's RFID enabled, the proprietary surface that creates a healthcare capsule, which is a Huge thing in breast reconstruction. Remember that up to half of the women that receive tissue expander will have A capsule contracture, so this is important. And beyond that, the possibilities with radiation oncology and the that we can improve there. So there are so many things that we can do. Now the good thing is we always took a scientific approach to breast aesthetics. So this is not new to us. We have a very strong team in clinical, in metafares, and our sales force is used to handling Scientific messaging. Also we have our Motiva Edge medical education platform and we've been using that already during the early part of the launch of Motiva Flora. So to us when we think about incremental spend, Of course there are going to be new people involved specifically in breast reconstruction, but our team is Very strong and caters to that type of product. So I think it's nothing new to the company. We're growing Very fast and we're adding capabilities across the board. Now when it comes to pent up demand and how we see the future, The way we are growing, it's hard to respond that specifically, but I can tell you we can't wait for the pandemic to be over. We don't see the end of the pandemic as a period where we will see reduction in growth. We actually see it as A great time for us to be able to meet again in person with surgeons, especially those surgeons that in the past have been skeptics About Motiva and same thing with medical education, we will continue to do online medical education, But definitely some of these surgeons will require in person medical education and those are things that we can get done Once the situation improves. The next question is from Anthony Petrone of Jefferies. Please proceed with your question. Thanks. And first, good luck, Renee, As you go into your new endeavors and good luck to the team as you transition. My questions will be on first on China and then pricing overall. So J. G, I'm wondering if you could just recap the market opportunity around China. It was previously marked at $150,000,000 to $200,000,000 within the global market, but at premium pricing. So Just want to get a recap of that calculus. And then as you look at implant pricing sort of globally, we now have the Nature Report published. Was out there earlier this year and there's been obviously a lot of data behind those two publications The lymphoma incidents. And so I'm wondering, has that impacted at all the actual procedure pricing on the surgeon end And by extension implant pricing. Yes. Thank you, Anthony. And for us, It's always been about showing that non commodity product in a commodity market can make a difference And we've been winning market share over the last few years by pricing our products according to the science and innovation that we bring to surgeons and patients. So for us ergonomics too just to give you an example, it has that proprietary smooth silk surface And at the same time, improve chemical and mechanical properties, more ergonomics, more patient comfort, so many different things. So when we think about the Langer paper is one of so many different components that reinforce our premium pricing. So as we go into EMEA, of course, we think that the value that we are creating should be priced accordingly. So we will continue to do that. When you look at China, China is a premium price country. It's not known to anybody, but It's about 100,000 procedures a year and those 100,000 procedures are done with products that are not Local to the Chinese market and are priced at the highest ASPs worldwide for any of the manufacturers. We can't wait for us to gain approval in China so that we can get ahead and bring our products that You know, are seen as luxury products already in China. Before the pandemic began, over 25% of the patients that we saw in South Korea were paying to be able That we saw in South Korea were paying to be able to get Motiva Implants in that market. So We certainly do see it as a good indication of what we would be doing in China. And just overall, Our strategy is to create healthy growth. You see it with the gross margins that we continue to show and I think those will improve over time as we bring new products And we go into markets like U. S. And China. Thank you. Thank you. The next question is from Amit Hazan of Goldman Sachs. Please proceed with your question. Thanks and good morning. This is Phil for Amit. I First, I want to emphasize Anthony's comments for Renee. Congrats and good luck with everything going forward. I'm hoping, Juan Jose, that you can talk about the search process For replacing Renee and maybe the points of emphasis or how strategically you're thinking differently than you did the last time you went through this process? Yes, of course. And good morning, Phil. I think last time we did this, It was pre IPO. We were getting set up and there were so many things that had to be done. So, Rene did a phenomenal job Coming a global company with all the respect of compliance rules across the board. This time around, we have the opportunity to thinking about the future, the company that we will be in 2025. And I think the Board is trying to take this as a great opportunity to get the person that can align us With that view and definitely when we talk about the future, we talk very clearly our aim is to become the dominant Player in this industry, we're bringing new products that are creating new categories like minimally invasive, transforming breast Strategic partner to that view. So we'll take our time. We're making sure that we look at all the different opportunities and When it's time, we'll let you guys know. That's great. Thanks for all that. The second one, I appreciate the conservatism in forward numbers, But updated guidance does contemplate at least some slowing in the second half from the first half if you look against normalized kind of 2019 numbers. I know you called out vacations probably more so in 3Q, but maybe comment on how COVID variants or vaccine rates may still be limiting procedure volumes what sort of contemplated and to have guidance on the COVID front? Thanks very much. Yes. No, I think that's a fair comment. We are seeing excellent momentum in our business. And when we think about the second half of this year, we're always going to be conservative. We're always going to take into consideration The different scenarios and just as we see the possibility of the variance making You know, a massive uncertainty in the regions of the world. What we have seen in the last year and a half is that because of the regional spread that we have in our revenue, Then when the situation gets tougher in Latin America, it tends to get better in Europe and in Asia and the other way around. So We're very, I would say happy with the way the team has performed over the last year and a half during the pandemic and we think that It's going to get well over time as the vaccination campaigns improve, the situation will improve. We saw it in Europe already in the first half of this year And we think that's going to be the case, but we're mindful of what's going on out there and I think that's what the guidance says. And there is a scenario in which we do even better. So I don't think we're trying to be Too conservative, but at the same time, we're mindful of the situation. The next question is from Marie Thibault of BTIG. Please proceed with your question. Thank you. Good morning and thanks for taking the questions and congrats on a great quarter. I did want to ask one on D. A, you've mentioned that the timelines are on track there. And I'm just curious if you've had any further discussions with the Agency, I know there had been potential for thinking about a acceleration of endpoint. So just wanted to hear what the latest was on those discussions. Yes. Thank you, Marie. And You know, one of the most important things is that, you know, just next month, all of our patients in our aesthetic cohorts will have passed a 2 year mark. So that is a significant milestone for us. And just as a reminder to everyone, the FDA President For approval of silicon gel filled breast implants is 3 years of clinical data. So we continue to explore those options With our 3 years data, now that we're going to get to that milestone, so I think with that data on hand, We can have more meaningful conversations with the FDA about that. Okay, that's great. We'll stay Updated on that as well. And then I guess one last one for Renee. We're certainly sorry to see you go, Renee, and Wishing you a lot of luck with your next role. I'll sneak one last question in here for you. I thought the cash burn this quarter was impressively low, very nice job with that. Wanted to hear what sort of got you there and what we can expect for cash burn going forward? You certainly made a lot of progress on that metric. Thank you, Marie. I appreciate it and also the kind words from everyone else on the line. It's been lovely working with all of you. So Yes. Cash burn, we're committed to it and we're seeing the results. As you can see just from the first half of the year, We will continue to invest in the business, so cash burn will go up from where we are this quarter. But it's been really nice to see how we're managing the balance sheet, leveraging everything, And yet performing that, as we've mentioned about COVID and activities coming back into play, we will continue to see Cash burn increased from here, but again, we stay committed to ensuring that overall cash burn for the year is down from pre pandemic levels. Thank you for joining us on today's call and we look forward to providing our next quarterly update in November. Thank you very much.