Good day and welcome to the Inmound Limited 4th Quarter and Full Year 2020 Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mary Siegel of MS IR.
Please go ahead.
Thank you, operator, and good day to everybody. I would like to welcome all of you to InMode's 4th Quarter and Full Year 2020 Financial Results Conference Call. With us on the line today are Mr. Moshe Lizzrati, Chairman of the Board and CEO Doctor. Michael Kreindel, Co Founder and CTO, Mr.
Yair Malka, CFO Doctor. Spero Todorou, CMO and Mr. Shakila Khani, President of InMode North America. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward looking statements and the Safe Harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, Please view it in the Investor Relations section of the company's website.
Changes in business, competitive, technological, regulatory and other factors could cause actual results to differ materially from those expressed by the forward looking statements made today. Our historical results are not necessarily indicative of future performance. As such, we can give no assurance as to the accuracy of our forward looking statements and assume no obligation to update them except as required by law. Moshe will begin the call with the business update and turn it over to Shakila Khani, Enno's President of North America, to discuss our North American operations followed by Yair Malka, InMode's CFO with an overview of the financials. We will then open the call for the question and answer session.
I'll now turn the call to Moshe Mihrafi, InMode's CEO, Moshe, please go ahead.
Thank you, Miri, and thanks to all of you for joining our Q4 and full year 2020 financial results conference call. With me on the call today are Yair Malka, our CFO Shakila Hiani, our President of North America Doctor. Michael Kreindler, our Co Founder and Chief Technology Officer And Doctor. Spiro Tejerdouz, our Chief Medical Officer. Also with me in Israel, Rafi Littermann, our VP, Finance.
2020, What a year it was. I believe that we will all remember this year for the rest of our life. I remember our earning call in February 2020, before the crisis hit the market, we all expected another momentous year and none of us had a clue What would take place only 1 month later. In March 2020, the world stood still. All of our sales activity stopped And not one of us knew how things would unfold.
But as Georgios said, never let a good crisis go to West. With that in mind, it took us a few days to recover and put together a worldwide plane based on 4 major decisions. 1, not to lay off any of our employees 2, to continue to work business as usual in all other businesses, Disciplined other than sales. 3, to help out in mode supply chain at all level from Component manufacturer through to our distributors, so that they will also be able to operate in spite of the crisis. 4, to use the time to upgrade our infrastructure worldwide and to train our team and our customers' doctors and prepare them for the day after the crisis.
This strategy paid off big time When business began to get back to normal just before the summer. In the Q4 of 2020, InMode generated Record revenue of $75,200,000 a 60% increase from the Q4 of 2019, a record of $36,100,000 net income on a GAAP basis and $39,900,000 of net income on a non GAAP basis. For the full year of 2020, InMode generated record revenue of 206 $100,000 a 32% increase from the full year of 2019, a record net income of $75,000,000 $89,100,000 of net income on a non GAAP basis. In the full year 2020 approximately 62% of our revenue derived Our recently introduced hands free platform and only 6% from our traditional laser and non invasive RF platform. The record revenue in the Q4 and the full year was driven by demand for our minimally invasive and hands free Proprietary electrosurgical bipolar arrest technology.
The U. S. Was a significant component in our performance, While international sales become a major growth engine with the full year 2020 international revenue more than doubling year over year. During the year, we saw accelerated demand from our new product launches As our hands free devices enable social distancing and allow physicians to offer solution that customers feel comfortable with, While effectively treating the entire body and face, the success we have had despite the outbreak of the global pandemic is a testament to our organization, dedication and innovative technology. As we look back on our action in 2020, We are proud of the decision to not only retain our workforce during the COVID-nineteen pandemic, but Spend our sales and marketing team, continue investing in our R and D and in our infrastructure and progress Our regulatory processes in the U.
S. And elsewhere around the world. We were confident in the future of InMode And saw this as an opportunity to cement ourselves as the market leaders. As a result of our bold step, We were able to capture pent up demand for our new and free and minimally invasive devices Evoque, Evolv and Morpheus8. Additionally, we were able to penetrate new medical categories such as OBGYN offering complementary solution to their practices.
As we introduced additional technologies in 2021, we plan to expand into Our goal is to introduce 2 new platforms each year and continue to diversify our R and D pipeline to offer wellness aesthetic solution, address other medical indication and continue to innovate. Additionally, we plan to further expand our international sales and marketing operation while focused on Europe and Asia Pacific In 2021, our initial success in this region give us confidence that we can capture market opportunity As the world gradually recover from the pandemic. As we expand into a new region and medical categories, We plan to continue developing patent protection for our novel method in RF technology that differentiates our product portfolio. Also, we will continue to defend our existing intellectual property. The success of FinMode so far has come from our innovation and ability to generate interest across medical communities for our platforms.
The fact that our devices and platforms can effectively be performed in the doctor office without the need of anesthesia Or any other invasive method has appealed to patient and physician alike. We will continue to deliver industry leading solution Using our unique technology to bridge the current significant treatment gap. Considering our successful performance in 2020, We are providing a full year 2021 guidance of revenue between $250,000,000 $260,000,000 Non GAAP gross margin between 84% 86%, non GAAP income From operation between $100,000,000 $104,000,000 and a non GAAP earnings per diluted share Between $2.34 $2.45 Lastly, as powerful recently introduced corporate social responsibility, we place high value on our employees, partners and stakeholders across the growing numbers of communities and markets we operate in. We aim to positively impact local economies in the U. S.
And in the rest of the world And we'll continue to prioritize the health and welfare of our employee and customers. With that, I would like to turn the call to Shakil, our President in North America.
Shakil? Thanks, Mishi, and hello, everyone. We reported a record Q4 and full year in North America as accelerated demand for our new product launches led to record capital equipment and consumable volume. It was very encouraging to see high levels of consumable purchases coincide with capital equipment sales. This clearly indicated that physicians were treating patients at pre pandemic volumes And have successfully adapted to the restrictions of COVID-nineteen.
We were very pleased with the reception of our new products, EVOLVE, EVOLQ and Morpheus8. These products proved to be high in demand not only by physicians, but also patients. The momentum we saw in the second half of twenty twenty supported our decision to continue investing in our sales and marketing organization back in March April. We were able to bring in some of the top talent from across the industry during the market contraction earlier this year. This enabled us to successfully capture the pent up demand for our products following the easing of restrictions.
One of the key initiatives to keep physicians engaged during the pandemic was the use
of technology. We introduced
the InMode University, our web based educational resource For physician and aesthetic providers and creating an impressive library of online tutorials and training content to sharpen the skills of our sales force and educate physicians on our newest products. The COVID-nineteen global pandemic accelerated consumer trends that were driven by efficiency, results And innovation, which are the core building blocks of our organization. Additionally, as the world transitions work Socialization to virtual meeting applications such as Zoom, people are spending more time than ever analyzing their appearances. This trend along with the flexibility of working remotely have created the need and opportunity for patients to visit physician offices And request aesthetic procedures more frequently. We believe that these trends are here to stay and we will continue to provide our innovative solutions to physicians and patients.
Coming out of 2020, our sales and marketing team has created a successful multi pronged approach to introduce InMode's latest technologies. Our ability to penetrate new offices and medical categories with new products is unparalleled, which is illustrated by our financial performance this year. Once again, we are proud of our team for their resilience and determination during this pandemic, and we are excited to take in momentum into the New Year. Now let me hand over the call to Yair to review our financial results in detail. Yair?
Thanks, Akhil. Good day, everyone. Total revenue in the Q4 of 2020 increased 60% to $75,200,000 with a gross margin of 86% on a GAAP basis. The increase in revenues was driven primarily by the expansion of in the United States and the continued momentum of InMode's hands free technology as well as the recently introduced Morpheus 8 body fractional technology. Additionally, AIMOD continued to gain traction in international markets with international revenues growing 102% year over year.
GAAP operating expenses in the Q4 of 2020 totaled approximately $29,200,000 a 27% increase from the Q4 of 2019. Sales and marketing expenses increased 25.4% In the Q4 of 2020 compared to the Q4 of 2019, stock based compensation increased to $3,200,000 in the 4th Quarter of 2020 compared to $2,400,000 in the Q3 of 2020. This increase Is due to higher than previously estimated vesting of our performance based options as a result of our record revenue in the 4th quarter. On a non GAAP basis, operating expenses totaled approximately $26,100,000 in the Q4 of 2020 compared to operating expenses of $22,700,000 in the Q4 of 2019, an increase of 15.1%. GAAP operating margin was 47% in the Q4 of 2020 compared to 38% in the Q4 of 2019.
Non GAAP operating margin in the Q4 of 2020 was 51% compared to 39% in the Q4 of 2019. This increase in non GAAP operating margin was primarily attributable to decreased travel and marketing activities in the United States, such as events and conference participation due to restrictions caused by the COVID-nineteen pandemic. GAAP diluted earnings per share in the Q4 of 2020 were $0.85 compared to $0.46 per diluted share In the Q4 of 2019, non GAAP diluted earnings per share in the Q4 of 2020 were $0.94 compared to $0.46 per diluted share in the Q4 of 2019. We completed our 4th quarter with a strong balance sheet. As of December 31, 2020, the company had cash and cash equivalents, marketable securities and deposits of $260,500,000 On the cash flow front, the company generated $41,600,000 from operating activities for the Q4 of 2020, driven by the record sales volume.
Total revenue in the full year of 2020 grew 32 percent to a record of $206,100,000 with a gross margin of 85% on a GAAP basis. Year over year international revenue growth was 76% in 2020. GAAP operating expenses in the full year of 2020 totaled approximately $102,400,000 a 33.9% increase from the full year of 2019. On a non GAAP basis, operating expenses totaled $90,100,000 in the full year of 2020 compared to operating expenses of $75,000,000 In the year of 2019, an increase of 20.1 percent. GAAP operating margin was 35% in the full year of 2020 compared to 38% for the full year of 2019.
Non GAAP operating margin for the full year of 2020 was 42% compared to 39% for the full year of 2019. This increase in non GAAP operating margin was, as previously mentioned, attributable to decreased travel and marketing activities due to the pandemic. GAAP diluted earnings per share in the full year of 2020 were $1.78 compared to $1.60 per diluted share In the full year of 2019, non GAAP diluted earnings per share in the full year of 2020 were $2.11 compared to $1.63 per diluted share in the full year of 2019, an increase of 29.4%. On the cash flow front, the company generated $79,200,000 from operating activities for the full year of 2020. With that, I will turn the call back to Moshe.
Okay.
Hi, this is the operator. Moshe has disconnected. We will connect in a minute. Just hold the line, please.
Okay.
Our first question today comes from Matt Taylor with UBS. Please go ahead.
Hi guys. Thank you for taking the question and congrats on a good quarter. So the first thing I wanted to start off with was Just understanding the guidance for 'twenty one, the way I'll frame the question is, you obviously had a very strong Q4 and you're at a $75,000,000 run rate. So can you talk to us about how you derive the $250,000,000 to $260,000,000 that would imply Average sales below that run rate, was there some stuff that was one time in Q4? Are you just being conservative to start the year?
Maybe you could talk about some of the ongoing trends and what you're seeing.
Hi, Matt. This is Moshe. I'm back again. I was disconnected, sorry.
No problem.
Yes, sorry. Anup, Sarah. The $75,000,000 in the 4th quarter, I believe We gave you how it was divided between the product. It was something like 62% on minimally invasive and 30 something On the Han Free. The $260,000,000 we need to remember that we are going to add another 2 platforms.
So, percentage wise, I believe maybe the although they will grow on absolute numbers, but percentage wise, Maybe the minimal invasive and the hand free will go a little bit down and OBGYN business We'll go up from a few percentage to something like maybe 7% to 9%. All the rest We'll stay the same. The laser and the regular RF non invasive will continue to be in the neighborhood of 5%.
Okay. Thank you. And can you comment on any trends you're seeing here early in 'twenty one? Are you continuing to see strong demand for Procedures and for capital?
Yes. The disposables that we're selling, we reached a record in Q4. And in the beginning of this year, so far, Very strong demand for consumables, which are being used, as you know, in the minimally invasive and ablative and also on the Vutiva, the women's health platforms. So hopefully and the way it looks like, We will break the record again in the Q1.
And Matt, just to add there, as far as what we've seen momentum wise, January Typically a slower month. We've seen some really good momentum come up in February here and normally February March are kind of the bulk of Q1. So it's tracking in a positive way. Thanks, Shaq.
And maybe I'll just ask one more. So you Highlighted this women's health offering and I know you're beefing it up for a bigger launch here in 2021. Can you talk about the components of that? How you expect to market it and how it's differentiated from some of the other systems that are out there?
Matt, why don't I start off and I'll pass it over to Spiro. So basically, as we know, there's been In the past, there's basically been a lot there were some other companies and competitors in the space, in the women's Health and wellness market and many of them have actually left the space based on what happened a year and a half, 2 years ago With the FDA. However, we decided to invest very heavily with this. And essentially what we're going to do without giving away too much as you know, What we would like to do in this case with the technology that we'll be launching is it will not just be A unique focus product. So we're not just going to have it focused on one aspect of the women's health and wellness.
The idea with this is to have a multi pronged approach to it, we can actually have multiple revenue streams from physicians and also beneficial ways of treating the women's health and wellness market. Spiro, did you want to just add on to that?
Yes, I think, Shaq, thank you. Matt, great question. Obviously, everything we do here at InMode, we try to back up with Solid science and publications and peer reviewed journals. So when we attack these problems that have been plaguing women for a very long time, We stood back and we looked how can we approach it. And that's been the focus of our research and R and D with Mishka for the last two years.
So, we finally got to the point where we feel confident enough to provide different elements of those solutions, Which have not been addressed as well before and especially since the fact that as we know radio frequency is Very differentiated from lasers. So the fact that we can go deeper, we can remodel tissue and RF does not see pigment, I would say that's the core What we're doing in the women's health, in addition to utilizing some of our technology, which has been so up to this point, such as Morpheus8 microneedling. So, bringing that into the women's health with expanded capabilities on the Morpheus8 platform, In addition to the EMS, which we have been very successful with on the EVOLVE platform, both of those two core elements We'll be on we'll be part of the solution that we're providing women going forward, Matt. I'm sorry, I'm not trying to be vague here, but We like to not get ahead of ourselves. But I can tell you right now, we're very confident just like all the products when we launch with InMode That they actually worked and that's our reputation in the market and certainly with clinicians and patients who would like
to keep it that way. Okay, great. I'll leave it there. Thank you, guys.
Thank you, Matt.
The next question comes from Kyle Rose with Canaccord. Please go ahead.
Hi, good morning, everyone. Thank you for taking the questions. So just a few for me.
I wanted to see if
you could Dussek, you talked about Some
of the strengthening of the commercial team that took place in 2020, just wondered if you could help us understand that A little bit more. I mean, maybe where did you end from a headcount perspective? And then how should we think about Hiring moving forward, I mean is there any real white space left when we think about territories to build out? Do you need to build specialized teams to go Some of these specialized markets, just help us understand how the sales force should trend over the coming 12 to 24 months?
Sure, Kyle. Great question. So I think 1st and foremost, we ended up around 134 headcount for the year. We're definitely going to be adding for that. Now when it comes to specialized sales force, it's tricky and based on my experience, It can go either way, but I think learning from some of the things in my past and in the team's past, I think the way we're going to look at this, Kyle, we're going to take a hybrid approach to it.
So, there's in this business, it's very challenging to find people who I can close capital equipment. Luckily, we've found that formula. We're going to take that and integrate it within to that And kind of have a farming system similar to what you see in the major leagues. So I think as we start to develop some of our people, all of Our sales force, they all want upward mobility and we know that and we support that 100%. And so I think in doing that, As they can kind of learn some of the skill sets that they need in order to actually close business and find business and so on and so forth, The women's health and wellness space is a very, very, very specialized sale.
OBGYNs, urologists, urologists, urologists, this is within their scope of practice, Right. And within their scope of specialty. So we need to have people that can actually talk their lingo and understand what they're going to benefit from this. So I think with that being said, we have a plan to do that, but what we'd like to do is take a hybrid approach to it, see how that's going and then eventually transition into Potentially specialized teams. Does that make sense, Cal?
It does. That's very helpful. Thank you. And then, Moshe or Yair, I wanted to circle back just on one of Matt's questions just with respect to guidance for the year. And I appreciate you Framing it out with respect to the product categories, but maybe just help us understand, I mean, you exited in the second half of the year, Particularly in Q4 with record numbers and guidance for the full year 'twenty one is suggesting a little bit of a slowdown.
I'm just trying to understand is that more just There's still ongoing dynamics from COVID. It's the timing of new product launches, just because to get to that 250, 260, It does suggest a step down. Maybe help us understand what you're assuming as far as the puts and takes of what happens in 'twenty one?
Okay. I mean, as you probably noticed in the last 3 years, we were growing about $50,000,000 plus minus 1 or 2 every year. And basically, growing from $206,000,000 to $260,000,000 it's about the same $50,000,000 So I know that when you calculate that on the $200,000,000 percentage wise, it's come a little bit less What we did between 2019 2020. But overall, dollars 50,000,000 every year On medical equipment, when you have to deal with regulation on 27 different regulatory bodies around the world And you have to deal with that clinical studies and we have to deal with the training. It's not small number.
Introducing 2 platforms every year in addition to the growth in the existing portfolio By $50,000,000 every year, that's something that we would like to beat that number and hopefully it would be above 260,000,000 But as far as the guidance, dollars 260,000,000 which is $55,000,000 more than 2020, we believe it's a fair growth and we hope To achieve that and do even better than that. I mean, it's easy to say Q4 of $75,000,000 Slide that by 4 and we'll get $300,000,000 But I'm sure you remember we discussed it several times before, there was some seasonality in this business. And the Q4 is the strongest one, always. So taking the Q4, which usually is about 40% of the Total year and multiply that by 4 and expect to us to do $300,000,000 hopefully we'll do it, but it's a little bit more Than the guidance that we can give. In addition to that, yes, you're right.
The Q1, we still see A lot of effect of the pandemic, especially in Europe, they are experiencing the 2nd wave. I know that in the United States, things are getting better. But in South America, they are not getting better. And in some countries in Asia, things are getting better, but other countries like India are suffering. So overall, we believe that the Q1, we will continue to see the effect of the pandemic.
And therefore, on the Q4, As far as the budget is concerned, we took it into account. But overall, $260,000,000 in 2021, It's a challenge, but we will beat it.
Thank you very much. And then just one final question for me, Shaq or Spiro, I think the one thing that surprised us in 2020 was the durability of the interest from patients As far as you're getting treatments, I think there's a lot of maybe conjecture or reasons for that why that might have happened. And just wanted to see if you can maybe give us your thoughts on the pulse of the market as we head into 2021, particularly, hopefully the market reopens, people are out doing more. Do you expect There will continue to be a big focus on image and wellness and disposable income being allocated towards these type of procedures, just what you're seeing from the commercial Field or your peers?
Yes. No, great question. And I'll pass it over to Spiro after he'll talk a little more from the patient perspective. But I think one of the things that we saw very early on with the pandemic is that we no one really knew how to deal with it, right? So it was foreign to everybody.
And I think once we got to the point where people learned how to you go from having 10 to 15 people sitting in your waiting room to now having people coming in, Checking their temperature and then having them come in, it almost feels like a VIP type of experience for them, right? So I think now that Physicians have learned and patients have learned how to deal with the pandemic. They're a little more gun shy. And that's why we saw back in March April, Things pretty much just went completely dead. And since then, unfortunately, we haven't seen that.
I do think from what we've seen and what we've heard and based on our consumable sales That we certainly have seen an uptick in procedures, which is great. And I'll let Spiro comment on why that might be.
Well, I think it's a great question, right? I'm a practicing plastic surgeon, so I could tell you in New York, so I could tell you this much. There's a group of patients who always had this done, no matter what. That's an existing pool that's going to come in, no matter what happens. What's happened differently and we've seen this reflected by the volume coming to the different offices across the country, which I'm in touch with, There's a lot of new patients that never considered plastic surgery or never considered aesthetic medicine for themselves.
And I think the reason is people have reconsidered a lot of things that are going on in their lives. This is a big full stop for a lot of people. So, yes, the disposable income, no question. Yes, they're not traveling as much, not spending as much in restaurants and stuff like that. So, So they do have disposable income, but I think there's a reset on the thought process saying, you know what, I need you to I need to work out.
I need to do these things and I need to look good too. And a lot of self reflection has found its way Into expanding this aesthetic market. So even though we saw we thought the volume was going to be sort of shifted since Usually the volume for plastic surgery, the highest is in the spring and usually in the fall it sort of tapers off and we saw that pushed back And we thought that it would basically that's what it was, but it has continued. And I think the continue the part the reason is, Is that the market has expanded and people start to take care of themselves and that's part of what we do as well. So, I don't anticipate any change in 2021.
I think that this has been a wonderful year for a lot of plastic So, no matter how tough it has been, has really shown that, yes, people have sort of redetermined what their priorities are. And Believe it or not, this is one of them. So, the psychological factor of this pandemic has had a huge impact. And as well, I'm sure that you guys have heard about Zoom face, Zoom calls, so people are looking at themselves for hours on the computer has also helped us. So we anticipate this trend to continue.
I think that the percentage of new patients is what's fueling this market and I expect that to continue as things open up, Especially if you consider the optimism behind that and the vaccinations will help that as well. Does that answer your question?
It absolutely does. Thank you very much.
Welcome.
The next question comes from Jeff Johnson with Baird. Please go ahead.
Thank you. Good morning, guys. Three questions for me. Let me ask my, I guess, my first one, my own gating question on 2021 guidance. I think what we're all trying Figure out here is we want to get the quarters right too and I know you guys don't guide quarterly, but putting kind of pieces together, should we think about the 1st and maybe second quarter being down sequentially off 4th quarter by a good solid amount, 15%, 20%?
And then how do you think about the second half of the year against these tough, tough comps and the big pent up demand recovery? Is there solid growth you can put up year over year or should we really dial down our year over year growth expectations in the second half against those tough comps?
Well, this is Moshe. The Q1 of 2021 as compared to the Q1 of 2020, we will see a big growth. We will see a big growth. And you always have to compare quarter over quarter. You cannot compare Q1 to Q4 Q1 2021 to Q4 2020 Just because of seasonality of our business.
But if you compare Q1 2021 and Q1 2020, You'll see a big growth. That's something that we can assure you, even in our budget. Regarding and again, as I said 4, we still see the effect of the pandemic on Q1 2021 in certain parts of the countries, Including in Canada and North America, but also Europe and other countries. We believe that starting Q2 2021, once Most of the world will get the vaccine or at least we hope so. Then we will see a big momentum Start and the numbers for Q2, Q3 and Q4 will pass of course the Q2, Q3 and Q4 Of 2020.
So overall, the growth of $55,000,000 or close to $55,000,000 year over year We'll spread over the Q4. And quarter over quarter, we believe that we will see a nice growth Between 'twenty one and 2020 between 'twenty one and 2020. Did I answer your question?
You did. Thank you, Moshe. And I guess one follow-up on Matt, you mentioned the women's healthcare may be growing to 8% to 9%, I think you said or maybe 7% to 9% of revenue, the numbers you gave. If I do the quick math, that would suggest we're getting good growth out of that business this year up to maybe $20,000,000 to $25,000,000 Contribution from that product versus only about $5,000,000 in 2020, it kind of puts the MIRF For the minimally invasive and the hands free growing closer to maybe 15% year over year for the year. Is that just conservatism?
Have we gone through kind of a big bolus of demand for the MI and the hands free and now we have to dial our growth expectations down there? How to kind of think about kind of your comments on the women's healthcare versus what that implies for the other 2 big platforms?
Well, we always try to be conservative, especially when we give guidance, Because we try to be conservative and do better than the guidance. And I think that's what we did in the last Since we're a public company. Now as we go to the women health, I believe as we said, we intend to launch Sometime in the Q2, another platform for the women health, which called the Empower. And I think Doctor. Spiroto Eduardo talked about all the modalities that these platforms will include.
We're now doing clinical Study and the initial results are showing are promising. So we expect that that will go to something like 6%, 7% In 2021, whether if it's $20,000,000 or $15,000,000 time will say, but we will see an increase. One thing I want to remind you all, If you remember the letter from the FDA in the middle of 2018 that actually brought the women health market almost to 0 Across all the companies in the that actually marketed product to the OBGYN community, I want to remind you that we are the only company that responded to the FDA letter and received a letter From the FDA that allow us to continue to sell to this community and this is the reason why we continue to develop product For new indication for the women health. So yes, the OBGYN and the women health market is the growth engine for us. We intend to invest on it.
Also in as Chuck described in a special You now distinguish sales force and we will take it seriously as we did with the plastic surgery and aesthetic and All the minimal invasive and the end free products that we have launched to the market in the last 2 years.
Thank you. And then maybe my last question, I just wanted to follow-up on some comments Spiro made about patient demand. It sounds like obviously pent up demand here in the second half and the disposable income and Zoom effect have been helping. Has that been broad across the U. S.
Spiro, my question I guess more where we still see significant shutdowns in LA where maybe the service economy is still quite pressured in a place like Las Vegas, Historically, big aesthetic markets in LA, Las Vegas, is there still pent up demand that could come out in 2021 and help? Or do you feel like even in those markets
So the biggest markets traditionally for plastic surgery are New York, LA, Miami, Texas. And I'm in touch with all my colleagues. The thing that really impacts is the when we had a closure of elective procedures, and that's what happened in March. So If you have closure of elective procedures at that point, you just really can't do anything. So that has not been the case In California, as far as the doctors I'm speaking to.
And so the demand is still there. They're still coming in. And will there be a pent up demand after that? I'm sure. I'm sure, especially New York and LA are probably the Super strict in what they're doing.
The patients are still coming in. Will it be more afterwards? It's hard to predict. I'm sure there are people who are scared, Who are not probably coming in. So I anticipate once the vaccination process continues, just like everything else, I expect that trend to continue with it.
And the ones that are actually are concerned that wanted that elective procedure done will Probably a lot more confident to come through. So if I had to answer the question in a simple way, yes, there is going to be pent up demand in those markets. We expect it, I anticipate it, but the volume right now has not been impacted the existing volume. Everyone is doing quite well because of the fact that Elective procedures have not been stopped, which was very different back in March. Does that answer your question?
It does. Thank you.
Okay. Welcome.
By the way, Jeff,
the numbers of disposables that we Just a second. Jeff, the number of disposables that we sold until now from the beginning of the year More than what we saw, I mean, in the 1st month and a half in the 4th quarter.
The next question comes from sir Prashanthialli with Oppenheimer. Please go ahead.
Thank you for taking our questions and Again, congratulations on a very impressive year. I guess maybe if we could just start on the new product launches. Can you walk us through How you're seeing the timing of the launches as we move through 2021, so back half front half, back half?
Hi, Asaf. How are you? Well, yes, We intend in 2021 to launch 2 products. 1, as I said, Empower for the OBGYN. This we have all the FDA approval already and we're waiting for the clinical study and clinical proof.
I think Spiro have gave some insight on all the studies that we are doing there. We believe that this product will be launched sometime in the Q2. We also intend to launch And other platforms for the ophthalmology market, mainly for dry eye and Some aesthetic eye upper and lower lead procedures and that will come probably toward the end of Q3. We're still working on this platform. We don't have an FDA yet.
It's in process. We submitted for FDA approval. So that will come probably in the next 2 months. In addition to that, we continue we are putting the production line for these platforms, Which will be ready in the Q2 starting to manufacturing and hopefully that will be also on time.
Okay. That's very helpful. I appreciate it. And maybe I guess on the Competitive front and maybe just an opportunity for you guys to comment on it. I think we all appreciate the commentary on the healthy kind of demand for aesthetics Broadly, but as we look across the other public medical aesthetics comps, whether it be injectables Or cryo or obviously even lasers, we're seeing relative weakness.
So if you guys maybe want to Kind of take this as an opportunity to comment on how you're seeing not just RF, but specifically your kind of solution is taking share And what the feedback is from physicians that would be helpful.
Sure. So I'll start off and I'll pass it over to Spiro. So I mean, we've definitely seen over the last 2 years, you're absolutely correct. There has been Some decrease in obviously with any anything like that, there's an opportunity, right? And I think we've kind of seized that opportunity in doing what we've Just in the global space, there have been a lot of the competitive issues have been based on consolidation within the industry, as we've So private equity getting involved, purchasing other companies, big pharma, so on and so forth.
And I think what we've done is we this is just this is what we do. We specialize in capital equipment or consumable side of things. Our minimally invasive solutions, which no one really has per se, and then we obviously have our hands free, which is Competitive space, but again, a lot of those companies have been gobbled up by larger companies. And I think they, at that point, lose focus On what they're trying to do and accomplish, and they don't really have a captain to navigate the ship. And so I think that we've Definitely created a situation where we can now come in and capitalize on this type of situation.
Spiro, from a patient perspective, did you want to comment?
Yes, I think, Shaq, thank you for saying all that. I think what's important here to understand is that we've identified what we call a treatment gap. That's a concept that we noticed in the market. We've had an unmet need. And what does that mean?
And I'll repeat it again for people who don't know. So you have two You have the one end of the spectrum, we have major operations, plastic surgery operations taken care in the hospitals. And then you also have on the other side of the spectrum, you have a lot of these Non invasive procedures, lasers, etcetera, etcetera, which are not as effective as they can be. So you have A whole number of patients between 35 to 60, 55, 60 years old, which A, are not bad enough to have a big operation, by being bad enough, They don't have enough skin lax, they're not ready for the face lift. The same token, they've tried everything else and it hasn't really worked.
And they're getting there's a fatigue component involved Right. Getting fillers every 3 months, getting doing these lasers. So finally, if they can find a procedure that will essentially Tighten their skin or give them a long lasting result in 1 session, a 45 minute session, even though it might be a higher price at the end of day, If you look at the number of continuing treatments over a period of time, financially even makes more sense just to have one procedure done, you're finished And they'll last for 8 to 10 years. So this being a paradigm shift in the way people are looking at these things. And a combination of what Shaq mentioned, in addition to the fact that people are starting to smarten up, they're like, if I'm having filler 3 times a year And I'm having these things done and I put it all together, it's just easier for me to have something like this, which is permanent and it looks good and it looks great.
So The minimally invasive approach to what we're doing is a paradigm shift in aesthetic medicine and that's why you're seeing the growth that you're seeing Because we're able to penetrate these offices, but most importantly, give the patients what they really need. And the doctors are relieved because they don't have to explain themselves Afterwards, why this works, doesn't work, they're like, here you go. And add to the fact that you have the hospitals and patients are afraid of hospitals, Add to the fact that office based procedures is where it's at, all these elements are what make us competitive, But also changing the way the industry has been in the past. So I'm not surprised there's weakness in other sectors aside from the aspects that Shack brought out. It's also a combination of patients having what I call filler fatigue, for example.
Okay. That's very helpful. This is Moshe.
I believe we discussed this when we met in Israel. I think it's a mistake to compare us to the laser company. You're fully familiar with them, I'm sure. There are many Private companies, but there are 3 public companies, Alma, Venus and Cutera. And when you look on those three companies' Performance in 2020 and you compare them to the performance of InMode in 2020, you understand the difference.
95% of this of their business rely on 1 energy, which is the laser energy. Laser energy today is becoming a commodity, Commodity Energy Commodity Technology and a Commodity Product. They have no IP protection anymore. Gross margin of about 50%, 55% and all losing money, barely breakeven. So We don't have our category the new category that we have established, the minimally invasive It's a new category.
I don't think we have a recognized comparable or recognized peer. So I think we need to be judged based on our performance, Not comparing to other company because most of the other laser companies are not doing well these days. The The market is saturated, there's overcapacity, prices of the system are going down. You can buy today the best laser for less than $60,000 and the best IPL for from Korea for $30,000 $35,000 With this type of prices, they cannot make money. So the strategy and the DNA of this company is to work on things that we will have Intellectual property protection and also some uniqueness, and this is the reason why this category was established.
Okay, great. And just last question on my end. So once again, Exceptionally strong growth in the international business. Can you give us you guys helped us out last quarter giving us some color On some of the underlying countries, I mean, I guess maybe most interesting would be any commentary you can get on how things are developing in China, Anything that you guys think is relevant.
Okay. I'll give you that. Let's divide the answer into 3 answers. 1, currently, we have 5 outside North America and I'm not including Canada, we have 5 fully owned subsidiaries, UK, France, Spain, Australia and India, all the rest we're selling through distributors. So by the way, just to give you some idea, 85% of our sales is direct, North America And those 5 subsidiaries.
All the rest we sell to distributors. In 2020, we build the company in France And also we hired more direct people in the other subsidiaries. We changed several distributors. But most important, we have received regulatory approvals in China, In Australia, in Korea and also in Brazil. And these are major countries that actually Drive the growth in the international market.
We continue to invest heavily on regulatory bodies With regulatory processes in many countries and don't forget we have to deal with 27 countries, 27 languages and 27 different submissions. It is not everything FDA or CE in Europe, but we continue to do it Because we believe once all of our portfolio will be approved and will be cleared in those countries, It will drive the growth. So we work on Three basic avenues. 1, to enhance the distribution in certain countries like we did in Italy and Germany, To enhance our position with all of our subsidiaries in those countries where we go direct and continue to invest In regulatory processes in order to get all of our portfolio approved by most of the regulatory bodies around the world. These are something that we are doing parallel and this is the reason why in 2020, the rest of the world have grown As Yair said, more than 70% compared to 2019, and I believe that this process will continue in 2021.
Okay. Thank you, guys. That's all for me.
This concludes our question and answer session. I would now like to turn the conference back over to Moshe Mazara for any closing remarks.
Okay. Thank you everybody for joining us today. We hope that 2021 We'll continue the momentum that we have seen in the 3rd and the 4th quarter. We will do our best to meet The guidance or do even better than the guidance, come up with a new product and create value to the shareholders. Thank you everybody.