Good afternoon, everyone. Thanks for joining us on day 2 of the 23rd Annual Needham Healthcare Conference. My name is David Saxon. I'm an analyst on the med tech research team here at Needham & Company. With me today, we have the Sight Sciences team, with CEO Paul Badawi and CFO Ali Bauerlein. This afternoon's sesSion will be a fireside chat. If anyone in the audience has questions, you can submit them electronically through the Needham Conference portal, or you can feel free to email me, at dsaxon@needhamco.com, and I can try my best to work those in. So Paul and Ali, thanks so much for joining us. Maybe we'll start on the glaucoma side, surgical glaucoma. So at this point, you know, the 5 LCDs have been withdrawn.
Is there anything you can say about the conversations you're having or had, at least with the MACs, and how you're thinking about the LCDs potentially being reintroduced at some point in the future?
Sure. Well, David, first of all, thanks for having us. We're excited to be here, and I'd like to start off on the LCD topic just by quickly recapping how the process unfolded late last year. They were proposed in June. There was two quarters of education from all stakeholders, national societies, state societies, industry, surgeons, patient advocacy groups. We thought it was a great opportunity for the stakeholders to help educate the MACs on MIGS, generally, in our case, on Omni more specifically. The process in December ended with, I think, the societies had a productive meeting with the MACs.
We then, ourselves, Sight, and several of our surgeon KOLs, had the opportunity to meet with the MACs as well, and further discuss the clinical data that we had discussed over the summer and shared with them. In addition to that body of clinical evidence, we also had a timely publication of our three-year prospective Gemini trial that published in December, and so we were able to discuss that important clinical data with them and our surgeon KOLs. One of them was a principal investigator in that trial, so he was perfectly suited to talk through that study, in addition to how these three surgeons use Omni every day to take care of real glaucoma patients with real needs. And so soon after that, at the end of December, the LCDs were withdrawn.
The reason why I bring that up, as we think about what might happen going forward with the LCDs, if they're re-proposed, we feel like we're in a very good position. Q3, Q4 was a great opportunity for us to educate the MACs on site, on Omni, on the long-term clinical evidence that we believe meets their coverage criteria. So we think that if they're proposed again, Omni will continue to be covered. We're not stopping there. We have additional clinical evidence that we expect to be published this year. Important clinical evidence, we've talked about one such study, the IRIS Registry data. That's real-world evidence from the American Academy of Ophthalmology. That study, in particular, it's large-scale, real-world, two-year data, looking at the three leading MIGS procedures in combination with cataract surgery and cataract surgery alone.
So that's Omni, iStent, iStent inject, all in combo with cataract and cataract alone. I think that's really important clinical data, and we'd expect that to be published soon. And so if, if these are, you know, re-proposed, we think that we were in a very good position for continued coverage, and we will continue to get in a better, better, stronger, stronger position for continued coverage.
Great. All right. Well, yeah, I want to kind of drill down on the Gemini 2 data. So maybe, you know, briefly talk about kind of what the data show, and then in the final LCDs, you kind of touched on this, but in the final LCDs, they kind of talked about the need for two-year data. Gemini goes out to three years. So I guess, like, what's the risk that they move the goalpost and, you know, make it five years or anything like that?
Yeah, well, great question. I think, first of all, the long-term Gemini data, what it shows, we had previously published 1-year prospective multicenter study data. That's Gemini 1. The MACs had specifically commented on that data as being interesting, given it's prospective, washed out, medication washouts, et cetera, and they wanted to see longer-term data. They had specified 2-year. We then published 3-year, and what that data shows, the strong clinical outcomes, IOP lowering, and medication reduction outcomes that were seen at 1 year were maintained at 2 years and maintained at 3 years. Specifically around medication reductions, 1.8 patients were on an average of 1.8 meds. At baseline, at 3 years, they were on, an average of 0.3 meds. At 1 year, 80% of patients were off all of their medications.
At two years, 78% were off all of their medications, and at three years, I believe 75% were off all of their medications. So very durable, robust clinical outcomes that our surgeons have gotten used to seeing since we launched Omni in 2018, and I think it's the Gemini 2 study is a great study in demonstrating it from a prospective long-term multicenter perspective.
Yeah. Okay. All right, so now that there's coverage with no outstanding LCDs, maybe talk about what you're seeing in terms of Omni utilization.
Yeah, I'm happy to take that. So that's our main focus right now, is to drive increased utilization. And first of all, I would say that we really were pleased with what we saw in the fourth quarter in terms of utilization. Running up to the LCDs, potentially going into effect, we saw resiliency in our customer base. They were continuing to do procedures, continuing to use the product and buy the product in the face of that reimbursement uncertainty. And we really see that as a testament to the value of the Omni procedure and the importance of it in the overall glaucoma treatment paradigm. So, building off of that, in 2024, there's kind of a couple key initiatives, and one is increasing utilization.
While we are happy, we've maintained accounts at most of our accounts and saw, you know, slight double-digit drops in utilization as people worked through inventory and also had some level of reduced procedure volumes. We wanna see that improve in 2024. So that's what we're focused on. As we said in our earnings call, we expect to kind of regain that momentum in the first half of 2024 and then accelerate back to double-digit growth in the back half of the year, in the second half of 2024. So we feel like we're on track for that. We're doing a good job reengaging with accounts.
And, you know, just this last weekend we were at ASCRS, a major industry conference, and, really saw good dynamics there with customers, excited about the fact that, you know, they've maintained access to Omni in the market.
Mm-hmm. Okay, so, Ali, you talked about the effort around reengaging accounts. So would love to hear, you know, at least any anecdotes you can share about, you know, the portion of doctors who left in the back half of 2023. Kind of, what's the pace of them returning? And, you know, to the extent you can share, what are you seeing in terms of utilization in that account cohort?
Yeah. So, when we look at the business, so from our Q2 high of number of accounts down to our Q4 results that we published, we lost about 6% net accounts. That was about 70 accounts that we lost through that LCD disruption period. Those are the accounts that we're looking to reengage with, as well as new customers as we look to expand. Most of our activities short term in the you know Q1 period and then starting into Q2 was first and foremost focused on increasing utilization with the existing accounts, the customers, the 94% of accounts that stuck with us in that period, and really trying to drive deeper penetration in those accounts. I think we've been successful with that, and then we're also reengaging with the customers that we lost in that period.
That's something that, you know, will take some time. That was inherent in guidance, inherent in what we talked about in the Q4 call. That's a multi-quarter process to reengage with those accounts, but we, we believe that we'll be able to reengage a large number of those accounts again and also grow our accounts with the many other surgeons. You know, we're, we're probably at less than half or about half of the surgeons, MIGS-trained surgeons that are trained on Omni at this point. So there's still a lot of room, even outside of the accounts that already had or still continue to order Omni. There's still a lot of room for us to engage with new accounts. That funnel will take some time.
That's more of a driver in the second half of 2024, because you have to go through a cadence of having somebody decide they wanna get trained on Omni, actually get trained and certified, and then set up procedure volumes and buy product. That's a multi-month process, but we do think that will be a driver of our growth in the back half of 2024.
Okay. All right. Yeah, I mean, it sounds like you're in a good position where you've maintained a relationship with 90% plus of, you know, the accounts that we're using Omni, and then, you know, reengaging in the back half. So, I get that, you know, that effort might be a little back-end weighted, but I guess, do you have any programs in place, or would you do anything with pricing to kind of drive that adoption?
Yeah, so we already think that our pricing is at the right range and is competitive and based on the value proposition that we provide. So we have not changed our pricing associated with trying to win back volume. We compete on efficacy, and we talk about the value that Omni can provide to their patients and overall outcomes, and that's what we focus on with our surgeon partners. We don't typically spend a lot of time trying to negotiate price. It's more about the value of the procedure.
Okay. All right. Moving to Sion, I mean, it sounds like goniotomy volumes in general, market-wide, were less impacted by the LCDs, from what I can tell at least. So any update on how Sion is doing?
Yeah, so Sion performed similar to Omni in the fourth quarter in terms of having some level of disruption and work down of inventory. And then, you know, we do expect to continue to build that out in 2024 and going forward. But our main driver of increases in revenue when you think about guidance and in the back half of 2024 and then into 2025, that's really focused on Omni as the primary driver of growth. So we see Sion as a great complementary product, a good or great goniotomy solution. But when we think about the comprehensive procedure that Omni allows, that's really where we push surgeons over time to have to do that procedure to have the greatest efficacy outcomes.
Okay. All right. I understood. I am still gonna ask a couple more on Sion, even though you,ve said.
Sure
So I think last time you commented publicly, Sion was tracking like mid-single-digit millions. I think that was maybe around second quarter or mid-2023. So assuming that's how the year played out-
Uh-huh
... Well, I guess first, if you want to comment, would love to hear if, if that's in fact how, how it played out.
Yes, that's how it played out. That's directionally where it landed.
Okay. So for 2024, should, you know, investors expect growth off of that, maybe potentially getting into the low double digits, understanding that the majority of the growth is gonna be driven by Omni?
Yeah. Inherent in our guidance, we haven't assumed significant growth of Sion. It's not a major focus of our commercial team in terms of where they're spending time to drive increased utilization. So inherent in guidance is really the growth of Omni. So, Sion is certainly an opportunity for us, but that's more of an upside opportunity for outperformance.
Okay, got it. All right, and then, maybe we'll just touch on, on margins briefly. So I, I would assume Sion is still fairly high margin despite lower pricing. But Ali, anything notable on that front?
Yeah, it's certainly a great margin profile for the company. It's not as strong as Omni. Omni is our leading gross margin product, and it's our leading overall product and drives our gross margin. Sion, of course, has lower overall volumes, so it isn't as effective on the cost per unit side. Although, of course, it is cheaper to manufacture than the Omni product. So, you know, we think it's a great margin profile, great goniotomy solution, but the gross margin is lower than our Omni product.
Okay, got it. All right. So I mean, just looking at the first quarter here, I know you haven't reported yet, but I mean, it's the first kind of clean-ish quarter since last second quarter, I guess. So, you know, when you do release your results, would it be fair to view it as kind of a base on which you can build upon throughout the year? Or, you know, taking into some seasonality into account, or is there anything, any reason or factors that would make that extrapolation kind of inaccurate?
Yeah, I think that's fair, David. When we look at the full year of 2024, of course, there are normal seasonality patterns in the business, where second and fourth quarter tend to have higher utilization than the first and the third quarter. Of course, this year, if you look at just the sequential quarters, fourth quarter last year, the first quarter this year, that pattern's thrown off because Q4 last year was suppressed in volume because of the LCD dynamics. But looking at just 2024, in that picture, I think we'll see more traditional seasonality that we've seen in historic periods outside of the LCD period. In terms of comps versus 2023, Q2 will be our toughest comp because that's kind of our last quarter pre-LCD impact, and also our record order that we've had as a company.
And then Q4 will be our easiest comp in terms of what we would expect to see in utilization patterns versus what we saw in Q4 of last year.
Mm-hmm. Okay, got it. All right. Paul, maybe a couple for you. I mean, you've talked a lot about the standalone opportunity in the past. More recently, obviously, that's been overlooked just given reimbursement. But so maybe just remind us how you think about that market, and, you know, to the extent you have visibility, you know, what portion of your procedures are currently in the standalone procedures today?
Yeah. Well, we remain really excited about standalone. It's relatively small compared to combo cataract. Our mix of standalone is higher than the market's mix, so we'd estimate market mix to be probably mid-90%s, 95% combo cataract, 5% standalone. We estimate our mix to be mid-80%s combo cataract, mid-teens standalone. It is growing. It's off of a small base, but every year, we believe, based on the claims analyses that we've been doing, that it's growing, you know, 20%+ every year. We think that we're helping to certainly drive that. We remain really excited about standalone. There's increased emphasis, David, as you know, on interventional glaucoma. We are a leading interventional eye care company, both in glaucoma and dry eye.
And I think the more attention, the more players in this space, the more education on the benefits of intervening earlier as opposed to leaving patients on daily meds, often multiple meds, as they're sadly, inevitably progressing, then needing a really invasive surgery. That opportunity remains. I think it's still extremely exciting. We're executing on it. What we're doing to enhance market development, further education, further clinical data, we're gonna be talking about an important large RCT. We're gonna be doing in standalone versus standard of care soon. That's gonna be a really important clinical trial that can help develop this market. This is a 5 -year - 10-year story to change the treatment paradigm away from meds, lasers, meds, invasive surgery, to intervening minimally invasively, reproducibly, and effectively sooner. Omni is proven in that regard.
We've hired new commercial leadership that has specific expertise in developing markets from the perspective of a mid-cap company in a small public company environment, creating a new category. In our case, you know, transforming spine surgery to a lateral approach that was better. We have that expertise now, within Sight, and we're really excited about the coming years and what we're gonna be able to do with standalone market development, Sight Sciences independently, but then also in collaboration with other stakeholders who are also trying to move the needle on developing this market ultimately to benefit patients.
Mm-hmm. Okay. All right, before we switch to dry eye, maybe can you just touch on the pipeline you have within surgical glaucoma? Are there any milestones investors should be aware of, of the next, call it 12 months -18 months?
Yeah, we're excited about all of our R&D initiatives and our pipeline. We've talked about canalicular implant. We've talked about sustained release at the earlier stages. Well, I think we'll be discussing it more likely later this year. We haven't yet determined when, but would like, y ou know, everyone should know we're excited about the innovations we have, the R&D that's underway within Sight, and look forward to speaking in more detail, hopefully soon.
Yeah. Okay. All right. Maybe one last on the pipeline. So the canalicular scaffold, I'm assuming, you know, those are the patents at the center of the lawsuit with Alcon. If you don't wanna comment, that's fine, but I think the new trial date's April 22nd. Anything you can share on that front?
We really can't comment on pending litigation, so we'll have to skip that one.
Okay. Yeah. I just had to try, so, all right. Well, maybe we'll turn to dry eye. So for the year, guidance is down significantly due to the pivot in that business. So maybe just remind us what happened late last year, and what's left to do from an execution perspective.
So Ali, just one, one comment before you discuss the details. I wouldn't call it a pivot. I think our strategy with interventional dry eye with TearCare has been consistent from the beginning, David, which is we recognized, one, the need to elevate the standard of care with better technology and a better procedure that could deliver robust, long-term clinical outcomes, improvements in the signs and symptoms for dry eye patients by treating the root underlying cause of disease. The meibomian gland disease, the leading cause of dry eye is meibomian gland disease. Glands are diseased. They're obstructed. These oily obstructions need to be evacuated so that the glands can resume the production of good, healthy, liquid meibum, coating the tear with every blink. So from the beginning, we wanted to elevate the standard of care with interventional procedure, but that's not enough.
We needed to make sure that patients would have access to that procedure that we would deliver to the market, because today, there's very little, if any, appropriate reimbursement for Meibomian Gland Disease. And so years ago, as we were about to launch TearCare into the cash pay market, which offered lots of benefits other than revenue, I don't think revenue was the priority.
The goal of that controlled release, in my mind, was to get the product out there, get it into the hands of a number of ophthalmologists, get it into the hands of a number of optometrists, improve on the usability of the technology, improve on the design to improve clinical outcomes, get it to the point where we felt ready to go head-to-head in an RCT versus the standard of care, because that's the kind of clinical data that payers are gonna need to see, at least based on our discusSions with them, to support coverage for a reimbursed procedure for dry eye. That's been the plan since the beginning. We talked to payers, I think even before we launched TearCare. We were talking to payers about, what does the data need to look like?
What do you need to see if we are successful in delivering it to you? What kind of clinical data would support coverage for this technology and procedure? And their feedback to us was, "We would ideally like to see a randomized controlled trial against the standard of care." That standard of care is prescription RX, it's Restasis. Ideally, show superiority to that standard of care, and then also show us what the durability of treatment effect is for tear care. So if and when we decide to cover it, is it one treatment a year? Is it two treatments per year? And so we, you know, we met up with you, David, at ASCRS. You know that we had a presentation on our 12-month data, this SAHARA RCT. It's a two-year dry eye trial. It's got three phases.
The first 6-month phase we've published, that's treatment-naive, head-to-head, 340 patients randomized 1 to 1, TearCare versus Restasis. We showed superiority on our primary signs endpoint at 6 months, and then we took the Restasis arm in Phase II and crossed over those 170 Restasis patients, gave them a single TearCare treatment, and looked at their clinical outcomes at 12 months. And we reported, again, at a high level, patients continued to improve. Clinically and statistically significant improvements in signs and symptoms, and now we are finishing now Phase III, which is enrolling from 12 months to 24 months, to see how many of those patients need a retreatment in that second year. We believe that this kind of clinical data, all three phases, address payers' needs.
In parallel with SAHARA, we have a budget impact model, which talks about the health economics of tear care versus prescription RX. That budget impact model is going to get presented in May at the leading health economics and outcomes conference called ISPOR. It's also being submitted for publication in a leading managed care journal, and these two things taken together, the SAHARA RCT, coupled with our budget impact model, serve as the foundation for coverage discusSions that our market access team is having as we speak this year. We've talked about it before. The goal is coverage, coverage policies in 2025. We expect to make progress this year in terms of claims, helping ensure that good claims, good tear care claims, are submitted to payers. That's commercial and Medicare, small, large, national, regional.
Eventually, we hope that the claims cover it, claims paid will turn into a trend, and then eventually in 2025, we should see coverage policies. With that said, Ali can talk about the commercial performance, but I think it's really important to recognize that it's not really a pivot, it's an evolution of the strategy, which is what we had always enviSioned, to move this to a reimbursed category, to pioneer market access, because patients need access to a reimbursed treatment for their underlying cause of disease.
Yeah.
Okay. So thanks, Paul. And, you know, as part of that evolution, we did restructure the dry eye group in October of last year. We took about 50% cut to the infrastructure there, and really, as we said, we want to focus on market access, and that means having targeted accounts, having claims paid, working through that process, and eventually getting coverage wins. And as we have coverage wins in the future, because this patient population is much younger, in general, the Medicare population is much smaller. So it's about 30% Medicare, about 70% commercial plans, and because of that, you know, we'll likely get some wins, some regional wins, those types of things, and then we'll put infrastructure in those areas in 2025, likely and beyond, as we get those coverage wins.
So we wanted to be efficient and effective with our spend when we looked at it. We've done a great job validating the opportunity. We have over 50,000 SmartLids that were sold already, representative of, you know, procedures to be done, and that's great. That's great validation of the patient interest, of the viability of the overall procedure, and now we really need to shift to that coverage model and making sure that we have an opportunity to pursue the much broader market than just a cash pay market and into a reimbursable product.
So that was our refocus, so we do expect dry eye revenue to be down in 2024, but then when we look to 2025, we expect that to be re-accelerating again with those coverage wins, and then we really expect that to be a great contributor over time to our overall business.
Mm-hmm. Okay. I guess I'd love to hear what you're hearing from, you know, the payers, at least at this stage. I know it's early. And then that budget impact model, Paul, you mentioned that that's presented, or will be presented next month. Do you view that as a catalyst for to reengage, you know, more and more payers, or how should we think about that presentation?
Paul, you're on mute.
Sorry. Yeah, I think the budget impact model is a very important component of the discusSion with payers. It's really the combination of an RCT that matters a lot to them, which is an RCT where we've randomized against the standard of care and those very compelling clinical outcomes for TearCare, coupled with the health economics that every payer can assess through this budget impact model and those discusSions. Those two things taken together are what are giving our market access team, by the way, who have executed similar strategies in the past in market development exercises like this, with creating new reimbursement. They feel that we're in a very strong position with those two things, in particular, SAHARA and the budget impact model.
So those discusSions are going to be continuing throughout the year, and as we mentioned, we would expect to see over time claims being paid, turning into maybe trends on claims being paid, which turn into coverage policies. Right now, David, it's so early to talk about the claims. I will just say we're talking in a very strategic way to a variety of payers. Again, commercial, local, regional, national, Medicare, again, strategically based on a couple of considerations, such as which payers are more likely to adopt newer technologies and newer procedures that are proven to be clinically effective? Which payers do we have established relationships with, perhaps? Those kinds of things. It's anecdotal at this point, right, in terms of claims being paid clean, TearCare claims being submitted to payers and working through that process, it's anecdotal.
I'll just say while it's small and anecdotal, at least the anecdotes we feel are positive, good ones.
Mm-hmm. Okay. So I get that the, you know, focus is on commercial payers. I heard about maybe a year or so ago a doctor was talking about how these procedures also work really well prior to cataract surgery. You know, it kind of cleans the eye and preps it. So I mean, 4.5 million cataracts done annually, is that an opportunity longer term? Understanding that the focus right now, or at least in the near term, is commercial and expanding the cash pay to coverage.
It's absolutely a good market opportunity and good need. There's a need there. These, especially the premium IOL space, patients expect really, really good outcomes following premium IOL surgery, and the measurements that you do prior to cataract surgery, if that tear film, if it's disrupted or if that lipid layer is disrupted, you know, your measurements could be off. So stabilizing the tear film with something that's consistently effective in doing so, like TearCare, prior to especially premium cataract surgery, but really any cataract surgery, I think is a need. I think that you'll see more and more of that as we go. I know there have been, you know, some doctors who have looked into this in their own hands, and they've seen differential outcomes.
We would love to do a study like that in due course, but it makes a lot of good sense, and there is some established history in the market proving that, you know, stabilizing the tear film prior to cataract surgery can deliver better cataract surgery outcomes.
Mm-hmm. Okay. All right, and then maybe just touching on the pipeline in dry, you know, anything we should, investors should be on the lookout over the next, you know, call it year or so?
I think our primary focus there is really the SAHARA trial and what we're doing with our primary product, TearCare. Of course, we do have a pipeline of ideas and things on the dry eye side, but we really haven't discussed that in detail. And so that's something for a future conversation. For now, we're really focused on having a successful launch of TearCare and improving the clinical evidence for that product.
Mm-hmm. Okay. All right. Before we move into the financial section, I mean, ASCRS, as you mentioned, was this weekend. I'd love to hear the feedback you got from doctors, both on, you know, the surgical glaucoma side, but also the dry eye side. You know, how are conversations going, you know, especially in light of the glaucoma reimbursement?
Yeah. Yeah, I thought ASCRS was great. I thought it was. There was a lot of great energy. I thought it was a nice follow-up to the Interventional Glaucoma Congress earlier this year. There's a ton of excitement, continued excitement around interventional glaucoma in particular. So I feel like the market is emerging nicely, and as expected from the LCDs, interventional glaucoma remains a top priority to the field, to glaucoma specialists, to mixed trained cataract surgeons. I think there's a number of efforts underway to further educate the medical community around interventional glaucoma and different opportunities, different modalities. I think it's a great time for MIGS. I think it's a great time for interventional glaucoma. I would say the same on dry eye.
One particular example that I think is useful for everybody to understand, there was a presentation on dry eye by a number of KOLs, where they were trying to emphasize we have to stop talking about this category in a very general way, calling it, you know, dry eye. There's a number of different subsets to this category. There's aqueous deficient dry eye, inflammatory dry eye, evaporative dry eye due to Meibomian gland disease, and the field really needs to move forward and begin to diagnose and discuss the exact type of disease that a patient is presenting with. We've always believed that. We've been focused on a MGD-centric strategy, right?
It's taken a lot of focus and a decade to develop the TearCare technology to best treat MGD and the root underlying cause of MGD, to pioneer and make the right investments in a strategy that can lead to reimbursement and patient access for these procedures. So for us, that trend and that observation from the medical community to really begin to better think about, more specifically, what is causing this patient's dry eye? Is it really due to meibomian gland disease, as an example? I think that has to happen. I think it's starting to happen, and it's really, really good timing as we're coming to market at the tail end of our long-term reimbursement strategy, as we hopefully start delivering coverage for our TearCare procedure in due course.
Mm-hmm. I got it. All right, maybe a handful for Ali before we wrap. So gross margins, I mean, they held up fairly well in the back half of 2023, despite you know, the reimbursement dynamics. So what drove that? And then as we think about 2024, how should we think about gross margins? I'd imagine glaucoma is, you know, more favorable, but how should we think about the potential headwind from the dry eye business, given that it's expected to be down?
Yeah. So we're really proud of our gross margin. You know, it's a market-leading gross margin. We do expect looking forward, going into 2024, that our gross margin should be maintained in that kind of mid-80%. That includes the headwind that we expect on the dry eye side of the business, where we do expect higher overhead costs per unit, as you expect with our volume going down, your cost per unit for overhead costs increase. But still, you know, when we look at that business long term, when we think about the dry eye market opportunity, that business should also have margins nearing 80% as well over time, as we have a higher mix of the lids versus the hubs, and you also have just better absorption of overall costs and lower manufacturing costs over time.
So while 2024 will be a little bit of a transition year on gross margin for the dry eye side of the business, overall, we're maintaining a very strong gross margin, and we do see potential to improve that going into future years.
Mm-hmm. Okay. All right, and then on OpEx, so you're guiding 107-110 for 2024. I guess, what's the mix between SG&A and R&D, and is there any, you know, seasonality that we should be aware of?
Yeah, so we didn't provide specific guidance down to the SG&A and R&D level, but, you know, overall, when we look at efficiency versus the prior year period, most of the efficiency is coming from the SG&A side, not the R&D side. So when we think about it, that's really where you'll see that incremental benefit. When we look at just the overall OpEx strategy, you know, we're investing in the right areas of let's invest in our long-term pipeline, let's make sure we have an appropriate commercial structure, but let's also make sure that we have efficiency in mind.
In terms of seasonality, the seasonality, we did say on our first or Q4 earnings call in February or March, whenever that was, that we expect higher operating expense in the first quarter associated with that pending litigation.
Mm-hmm. Okay, great. All right, well, we're about at time, so I think we'll wrap there. But, Paul and Ali, thanks so much for joining us. Thanks, everyone who tuned in, and really, we really appreciate you, everyone taking the time and, have a nice afternoon.
David, thank you. Thanks, everybody.