AVITA Medical, Inc. (RCEL) Earnings Call Transcript & Summary

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[Audio Gap] In each case, we believe our products are best from a clinical perspective, but also that they speed up the time to graft, the time to heal, which is extremely important for the patient and potential complications, but also important for the hospital that is trying to -- that is striving to make economic progress themselves. And so PermeaDerm is a biosynthetic dressing that protects the wound, that stabilizes the wound. And then depending on the wound size, and we're getting much more into trauma as well, there is a need for a scaffolding-type technology to build up the wound. And so we have this collagen-based dermal matrix that not only builds that up, but also helps in revascularizing and preparing the wound for graft. And then, of course, our RECELL product. And the RECELL product is time tested in terms of its ability to be effective. And of course, over the last year, we've moved from a more manual process to a more automated process that helps facilitate healing and using the patient's own skin and a small part of that skin so that they don't have those harvested graft donor sites that are oftentimes painful and problematic. And then finally, again, PermeaDerm is a great source of protection and healing in that process. What's important for this company is to get to a point of being data-driven. And so we'll do that in every aspect of the company. We already use data in effective ways as we manufacture, as we measure quality, as we forecast, and I'll talk more about that later. But it's important for us to provide physicians with the data they need to understand, but also justify utilizing our products. And most of the data proves effectiveness, superior effectiveness of the products that we sell as well as the speed to healing. And time is of the essence for these patients. And so it's important that in the example of PermeaDerm that it promotes that wound healing quickly. And then RECELL, of course, not only does it take a much smaller amount of donor skin, but the data shows that patients can be -- can leave the hospital 36% sooner. So for example, instead of 15.5 days, 10 days. And that amount of time not only aids the patient in terms of them wanting to get home, but in terms of the hospital and the amount of money that they spend on a patient in that bed, particularly in a critically -- critical care side of the hospital is extremely expensive. And as a result, they can save thousands of dollars -- tens of thousands of dollars on that patient if they leave earlier. And then Cohealyx, of course, the time to graft. Other dermal matrices are oftentimes -- it takes a few weeks to be prepared for graft and ours can be ready with Cohealyx in as soon as a week. Again, this kind of shows you not only how the products are used in layering to heal the wound, but from a revenue standpoint, you can see that the additional -- these additions to our portfolio not only add clinical benefit to our clinicians, but they also add a revenue component kind of a per patient basis that utilizing 2 or 3 of the products on 1 patient can provide a significant improvement and increase in revenue per patient for AVITA. This has been a challenging year and a challenging quarter, and we've made significant progress, just the same. I think we've had a lot of headwinds. We'll talk about those. One of those is on the reimbursement front. The great thing about AVITA is that we got a reimbursement code. And that reimbursement code that pays institutions and physicians drives adoption. This is -- the economics of medical tech and biotech are significant and all the more going forward. And so anything that drives it forward, if it becomes unclear or diminished, it can stall things in its tracks. And so the hope that we had at the beginning of the year that this economic component would propel our growth. And as a result, we predicted that there would be significant growth, that was stalled by the fact that the agency responsible for publishing the codes and paying the physicians failed to do so. So there's a lot of detail around this, but suffice it to say that they kicked the responsibility for that payment to 7 contractors that cover the entire U.S. The U.S. is split up in 7 geographies. They all cover that. And then those contractors failed to do so. And once they fail to do so, the leadership of the company went to Washington, D.C., met with them, met with Congress people to admonish them that this is preventing physicians from using our technology and patients are going to suffer as a result that convinced them to move ahead and to do it, but they still took another 3 or 4 months. So just a few weeks ago, this was all kind of settled. Three of them have published, the other 4 have confirmed that they will publish most likely by the end of this month, for sure, by the end of the year. So it settled. But in essence, we've lost a year of momentum. Now in settling it, they will go and do back payments for those physicians. So they'll be made a whole, but the company really lost that momentum with these physicians because there was a lack of clarity and really confusion about whether or not they would be paid. And so many of them shifted back to the old standard of care of grafting, even though it's a lower amount, they at least knew that they were going to get paid. And so that's the realities of the year. And one of the major headwinds that's caused us to look kind of flat in our growth, and we expect that as we've removed that barrier and that hurdle that it will actually become a propellant for us and a catalyst through 2026 and beyond. A company like ours is all about focus. There are a lot of different things that we've had to do over the past couple of years to prepare for growth. And some of that can sometimes be a distraction. This reimbursement issue was a distraction aside from being a stalling event. We also have value analysis committees where Cohealyx, we're trying to push those through. So accounts -- hospitals have the ability to purchase the system, champions there that want to buy it need to wait until it exits the value analysis committee. We're in about 1/3 of our accounts. We expect some of those to come out in Q4, the rest in Q1 throughout Q1. And so we expect to be able to get a pretty good uptake in Cohealyx here in the next few months. But the idea is to focus on about 200 accounts, the burn centers, 120, 130 burn centers and the 50, 60 trauma center -- Level 1 trauma centers in the U.S., focus on those 3 technologies, each having its own value drivers as they work together and then focus on geographies. Make no mistake, we are focused on the U.S. and focused on driving revenue growth in the U.S. And having spent a few days here in Australia with our distributor, I'm pretty bullish about what they're going to be able to do in the months ahead. And then we have a few other countries that we will have some progress, and we will be developing key opinion leaders and champions in those markets as well. There's a large market. I think one of the things that investors look at is what's the potential of the company, not just how well the products work, but how substantial is the market and the potential. And obviously, it's on me and on the company to realize that potential and be operationally excellent in the process. But there's a large -- there's 40,000 Americans hospitalized with burn injuries every year. And those burn injuries have a great degree of complications, potential for infection and sepsis and with a tremendous cost to the health care system. And so we address all of that. Any time that you're trying to change how they practice medicine, it's important to have a value driver in a clinical component, a workflow component and an economic component. And we tick all of those boxes for our customers. And our intention is to communicate that clearly, broadly and deeply through data and other influential means to expand adoption and utilization. Again, this is all about focus. While the total addressable market is vast, it remains at $3.5 billion. It's important for us to focus with the resources that we have on the high-volume accounts, on those centers that do most of the work. And the great thing about it is that we are already active in those accounts. So we have a presence, we have a relationship. It's just that we need a lot of expansion. For example, if you have 1 or 2 physicians using it, we need 10 or 12 using. If you have a physician using it on 1 or 2 procedures, we need them using it on a dozen different procedures. And so that's the goal of our commercial teams is to drive expansion and utilization within existing accounts to get further and further penetrated across our portfolio. Again, this is kind of what I talked about. We had talked about some of the opportunities we have for growth in the coming year. I think it's more than just removing the barriers that have been there, but we've restructured our sales team, which has probably caused a little disruption as well, but we've rightsized it. So we've been able to remove representatives from more rural areas, calling on smaller accounts, and we have them located and situated throughout the country of the U.S. at the key centers. And then we also have the right kind of salespeople. I think that when customers were largely using ease of use, there was a lot of technique involved and there was a lot of need for our clinical tissue specialists to be in the cases to help them with technique to help train them to make sure they were using it properly. Now that we have the more automated RECELL GO, we're able to have resources that both can help the clinician clinically, but also have that sales mentality and sales experience that helps drive further use and expansion in the hospital and have not only clinical discussions but workflow and financial discussions with business leaders and department directors in those hospitals. This is what I referred to in terms of the length of stay. Again, this is not just the company promising and communicating that the RECELL technology is better for the hospital, but there's data that shows this. We already have one major institution in the U.S. that has adopted further use commitments around this data and that they want to realize this kind of savings and this kind of treatment for their patients as well. Along the lines of data, obviously, we have the clinical data for Cohealyx and PermeaDerm needed for regulatory approval. But we've taken that next step to do post-market studies that provide our sales and marketing teams with the data they'll need to show effectiveness versus -- in the case of PermeaDerm versus cadaver skin or allograft. And in the case of Cohealyx show the data that shows the time to graft being sufficiently less than competition. So we expect those clinical studies to be fully enrolled by the end of the year and that a lot of that data will be published throughout the year and towards the end of 2026. But because they're post-market studies, we are able to use cases and use some of that preliminary data on podium. We will be at significant burn conferences in January and in the spring, and we will have clinicians on podium talking about the initial readouts from those studies. Again, I try to remind our teams, I try to remind myself why I joined the AVITA Board, why I'm proud and excited to be part of this organization. And aside from a lot of the business and commercial and economic commitments that I've made to make significant progress in the coming months and quarters. This is a big part of why I'm here. And this shows and demonstrates the power of the technology that we're trying to get to market. And this woman was treated conventionally, which did not work for her and then was treated with RECELL. And you can see the results after about a year, you can hardly tell that this tragic event happened to her. And so this is part of the mission, part of why I, and I know a lot of the people that work at AVITA get up every morning because we know that every day our product is not in or fully in institution is another day that people are being -- are not able to be treated the very best way. Moving on to financials. Just an overview, you're aware of the revenue miss in Q3. From a margin perspective, we stay strong in the 83%, 84% for RECELL. As we've discussed in the past, PermeaDerm and Cohealyx bring that margin down a bit when there's a mix. And yet those products, because of our limited amount of spend in those products, any revenue that we get drops down to the bottom line significantly and helps us with our gross profit along the way. Operating expenses, as we've talked about, too, we've brought it down to a level that not only is sustainable, but is strategic. We cut expenses in the second quarter. As a result, our burn in the third quarter was $6 million as opposed to $10 million, and we expect to be able to continue that. And we also are positioned in terms of our people and structure to grow. We have the fuel to grow. We also are set up to where we shouldn't have to make much change or additional spend beyond where we're at for the next at least year or 2, I think. From a cash perspective, we'll talk more about this. I'm sure there'll be Q&A about it, but we have been responsible in our cash use and our cash burn, and it's allowed us at the end of September here to have $23 million in cash. And so we believe right now, we're well positioned for where we need to be, but we continue to address this and talk about this and to make sure that we strengthen this going forward, and that's our intention. If you look at the CAGR aside from, I think, a disappointing 2025 in terms of growth, if you look over the last handful of years, this represents during COVID, this is since FDA approval, all that has to go into going from FDA approval to launching, to scaling up, to securing reimbursement codes and having those make an impact in the market. There's been an average of about a 30% CAGR over that time. We expect that to get back on track after this year of learnings and headwinds and significant growth to follow. Again, just in summary, I believe we're changing this health care paradigm in acute care. The way that you do that is to make sure that the hospitals have both an economic and clinical benefit aligned with using your products. We've done that. We will preach that in the coming months and quarters, but we will also use data to make sure that, that's justified. We will also use data internally to be disciplined from a financial perspective, but also be predictable to forecast accurately to set clear, transparent, relative and reasonable guidance and then achieve that guidance through day-to-day commercial execution and operational excellence, and that's our goal. With that, I think we're handing it over for questions and Q&A.

Yes. Thank you, Cary. We'll now move on to investor questions. [Operator Instructions] I'll now hand over to Ben Atkins to run the Q&A.

Thanks, Rudy. Cary, investors are watching closely as you guide AVITA through this leadership transition. Question, as you step into this interim CEO role, what are your top 3 operational priorities over the coming months? And how should investors evaluate your progress during this transition period?

Well, as I've mentioned a few times, I mean, for me, it's about driving consistent utilization with our customers. If we drive consistent and expanded utilization with our customers, the revenue will follow. We will be able to predict it. We will be able to perform at rates that we haven't been able to in the past. So that level of commercial excellence. Second, we need to maintain cost and operational management. There's a lot of back end to the company that supports the front end. And we need to maintain high levels of quality and high levels of strategic investment to get a return on that investment on the back end of the business. And then performance management and acceleration. We've hired a lot of people. We've changed the structure all the way up to the top and to the CEO and management -- executive management levels. I expect a high level of accountability, a high level of performance out of myself and everybody else. And there's structured ways of doing that, but there's cultural ways of doing that. My intention is to drive that to new levels in the year 2026 and beyond.

Following on from that, investors have also asked about how your -- the new leadership team plans to communicate and set expectations. To that end, what is your guidance philosophy? And how do you plan to communicate progress and expectations going forward?

Sure. So thank you. I believe in being as transparent as possible about everything that is a challenge and everything that is an opportunity and exciting to be very clear about what we're facing and what we're accomplishing. And before I can give guidance externally, I have to be honest with myself, and we have to be honest with our teams internally. What are our issues? How can we overcome them? How can we mitigate risk? What do we expect to happen? How can we exceed what we expect to happen? So when we do that internally, it gives me the confidence to share it externally in a way that is very transparent and is very clear. And I don't think it should be a mystery what the company expects to do next year. I don't think that if investors want to know what we're up against, what I expect that it should be pollyannish and hopeful. It should be based on information, on a customer-centric philosophy and company where the customers are telling us what they're going to do, and we're impacting that. So if they tell us what they expect to do, we should believe them. And then we should do something to expand that and change that and share that with our investors externally. And yes, we'll do as a public company, we'll provide guidance. We'll give regular updates. But what's important for me is what we're doing internally so that when I tell you something externally, it's based in fact and in reality.

Moving to the products and particularly RECELL. Some questions are seeking clarity on how customers are engaging with RECELL GO. How would you perhaps characterize how the switch is going from the legacy RECELL to RECELL GO in those markets where it's available?

Sure. So there are some customers. These are some of our pioneering RECELL customers, which we value a great deal and appreciate. They develop techniques and capabilities using RECELL ease of use that are outstanding and amazing. And so they like how they do things. And so there's always going to be a limited number of accounts that -- and physicians that like the old manual technology because they know how to use it and they like how they use it. And so we've looked into margins and our ability to manufacture both systems going forward, and there's no problem in doing that. And we want to be responsive to our customers, those that want to keep using the other. But the fact is everybody that's new, they're all going to use RECELL GO. They've all -- they're all looking to use RECELL GO. They're not going to dive into learning those kinds of manual techniques and taking that time. And so everyone new is into RECELL GO and is transitioning over. I think we thought that it would be somewhat immediately -- immediate, everybody would switch over right away, but it's a transition, and we're going through that process but have had significant positive feedback from the field.

Some investors have asked also about how we are dealing -- company is dealing with reliability issues with the initial rollout of RECELL GO.

Yes. I mean, as with any technology, when you roll it out, you're going to have some opportunities for upgrades and fixes in the process. So there are a limited number of software-related error codes that were reported by some U.S. surgeons earlier in the year. There were no hardware issues, no safety issues that need to be reported or identified. So those software upgrades were rolled out last month in October at the sites. And so in a way, it was a good opportunity for our technical people to get out into the field to do the upgrades, but also speak with customers about their experience with the product because, of course, we want to continue to have products and update them in ways that are helpful to the customer themselves. And so we're monitoring initial feedback. It's only been a couple of weeks. It's really too early to quantify how much of an impact there's been. But this is standard procedure in terms of software refinements, and we'll continue to do that.

RECELL continues to be a cornerstone of our success in burns. Investors are asking, however, to understand how growth could go beyond that core. To that end, how are we positioning RECELL for broader adoption in trauma and surgical wound settings? And when do we think that these newer indications could make a meaningful contribution to RECELL's growth?

I mean, obviously, we have history in these burn centers that goes back a long way and relationships there. And so I think when you're addressing trauma centers and new indications, it's a process. It is a process of educating the physicians about how they can use not only RECELL, but the combination of our products, Cohealyx and PermeaDerm in that process and then allowing the clinicians to give us the feedback we need but also develop their own synergies within the products, help us with champion those efforts to other physicians in the trauma space as well. And so it's an evolution of, I think, education, but also working in conjunction with the physicians, sometimes companies at headquarters or in the R&D labs, they think this would be a good indication. This would be a good technique. And of course, we provide that for our physicians to help them. But we also listen to our advisory board, listen to those that are skilled and innovative in their space. We're not the only ones that are innovative at AVITA. We have physicians and surgeons that are innovative. And if you give them certain tools, they will do more with it than maybe the company ever thought could be done. And so we educate them, they educate us, and I think that will help us propel our growth in the trauma space. And it will take some time over the course of 2026, I believe by the end of the year, we'll see significant uptake in trauma, and we'll learn a lot as well.

Turning to the international focus for RECELL. With CE Mark approval now secured for RECELL GO in Europe, can you walk us through the key milestones ahead for international expansion, including progress towards TGA certification here in Australia and how you see these markets contributing to the growth over the next year or 2?

Yes. I mean, on the one hand, I want to tell you how excited I am. I mean there are -- there's significant opportunity outside the U.S. I think, again, having spent some time with our distributor here in Australia and a physician as well here just yesterday, I think that there is a significant opportunity just like there is in Japan and in the U.K. and parts of the EU as well. But I also want to make no mistake that investors and shareholders, I don't want you to think that, hey, don't pay attention to our progress or lack thereof in the past year and just pay attention to everything else we're doing in the world. The fact is we have a specific strategy and mission by country. They're all different. And ultimately, our goal is to make progress strategically and clinically and from a revenue perspective as well. We're not expecting a lot internationally, whatever that means. I mean I just don't think people should think, well, we're going to make up for what we can't do in the U.S. by trying -- by selling a lot elsewhere. I think that anything that happens above and beyond our expectations internationally would be great. But our goals internationally in most of these markets are introductory, building champions, understanding how good our distributors are and preparing ourselves for a more full-scale launch once we frankly get our act together in the U.S. from a revenue perspective and make the kind of progress that we expect.

Reimbursement clarity has been a key theme this year and a topic that you addressed in the slides. Building on that, with reimbursement clarity now improving, what early signs of renewed hospital engagement or physician/clinician engagement and procedural growth are we seeing in the U.S.?

Yes. That's a great question because I want to make sure that we're clear. And I think going forward, you asked about communication and transparency. I think it's really important to be clear about timing because timing -- if the timing is off, the result is the revenue is off, at least in people's minds and expectations. So when I say this has been cleared up, what has to happen and has happening and is happening is that we're communicating with those in the hospitals that are filing claims. We're communicating with the physicians to say this has been cleared up, trying to get them to start using quicker, trying to get them to start ordering, trying to get them to file the claims so that they see that it's been paid, not that they don't believe us, we can prove it to them. But all of this is taking place, and it takes weeks, and it is taking weeks. And so I don't expect anything substantial until it would be gradual in Q1. And what I will be looking at, and it's not just on this aspect, but in general, how do you make sure you hit your quarterly number and your yearly number as a result? You do that by looking monthly. You do that by looking daily. What are they ordering every day? What are they ordering every week, every month and who's ordering? And even before they order, who's using and how much are they using? And what are they using it for and how many physicians are using it? I expect to get granular. I've run commercial teams. I have been a sales guy. And so I know that, that kind of granularity and information is available. It sometimes is a little bit difficult. It needs to be mined. It needs -- we need discipline around it. But when we start looking for early signs of uptick, sometimes it's as simple as if they're ordering this much pretty consistently, it goes up by 10%. It goes up by 20% on a daily basis because that's how you build a business, and that's how you build growth. It's not quarter after quarter. I mean, ultimately, it is. But that quarter is made up of months and weeks and days, and it's made up of customers and physicians and reps. And so bit by bit by bit, we're going to measure it. We're going to drive it, and it will all add up to the kind of growth that we expect.

Going a little deeper on to the reimbursement framework itself. You said that the MACs are now publishing their rates. Can you speak to the economics of these new Category 1 CPT codes for RECELL use and how that sort of links together with the broader reimbursement picture in the U.S. for RECELL?

Sure. So three of them have published. The others, like I said, intend to publish. And so in the U.S., the institution gets reimbursed, but then the physician also gets reimbursed. And the amount that the physician gets reimbursed is at a higher level than they would if they just did a split-thickness skin graft. It's as simple as that. It's higher. So it's not an amount problem. It's in a surety that they will get paid. And so the economics are very clear, but they go both ways, obviously. So it's kind of sad that this thing that was supposed to make everything happen faster and propel this level of growth this year was the very thing that because they messed it up, physicians got confused and then they got gun-shy about using it, and they went to more sure way. And so now, I mean, you can imagine if some physicians who are fairly new, we're using -- we convinced them to use RECELL. They started using it and then the financial piece became the way it became. So it's not just telling them, hey, you're getting paid now, go back to using it. They've been using the conventional way for now 10 months in the year. And so in some ways, it's also a reeducation around why they chose to use RECELL to begin with and having them get used to that in their standard of care. And so in the U.S., money drives. I mean I'd like to think that -- and back when I first started in Medtech 30-some years ago, the clinician and what was best for the patient and what they wanted in terms of technology was what happened. They told the hospital to buy it and it was bought. But now it has to be justified economically even before they'll look at it clinically. A lot of these hospitals won't let you talk to physicians until you've already run it through a pro forma for their hospital to make sure it makes economic sense for what you're charging them additionally that it can be justified from a reimbursement standpoint. So it drives the business, and it's going more and more in that direction over the coming years. So what's great about AVITA is that we have as strong or maybe even stronger of an economic story as we do a clinical story.

On that note, with the economic story, AVITA does have some of the strongest length of stay data you cited the more recent 36%. How can the company best leverage that going into the new year?

Yes. So what's important when you're dealing with a hospital is to make sure that the different parts of the hospital or a hospital system are talking to one another. So this length of stay piece and the economics associated with it, and it's not just economics, it's also optics. If you think about a CFO and a CEO of a hospital, the CEO cares about infection rates, complication rates, readmittance rates. Those things are published now. It's not just something that is bad for the patient or that the hospital encourages. In the U.S., a lot of those rates are now published. So if you're a patient or you're somebody that's public information, you can look and see in a particular city or across the country who has the highest infection rates from the hospital. So that's something that they don't want. They don't want to be on that list. And the CEO cares about those kinds of optics. But the CFO cares about the overall cost and profitability of the institution. And so he or she is the one that can see, well, listen, we're spending a little bit more for the technology, but what's the reimbursement, but also can we save money? And how much -- how many dollars are associated with clearing out an ICU bed or a bed in the hospital. And so what's important for our sales team to be able to do is to talk to the physician to be in the cases, but then to walk down to the carpeted areas of the hospital and have these discussions with the financial people and help them understand and then help the different parts of the hospital talk to each other so that they're all on the same page. And so we share that data with them. We get them to talk to one another and be unified in what's best for the hospital, and that is utilizing our product.

A little bit deep on to the commercial execution. Some are interested in understanding how we're positioned in the U.S. market. To that end, can you characterize the sort of the size and setup of our field force, our salespeople? And under what sort of structure and process do we, AVITA sell ourselves to these 200 hospitals centers that we talk about in the TAM?

Yes. I mean we're like a lot of companies, a lot of companies I've run that have sales reps, that have sales managers, that have people that the sales managers report to and then a commercial leader and then me. And we have a very free flowing organization in terms of those levels I just described. We don't have barriers. We have a lot of engagement and involvement all the way up to the CEO role. Obviously, the reps call on the customers. They're the ones charged with driving utilization and expansion within the account. They have those conversations that I described. Their performance is managed, their predictability and forecasting is managed by their managers. They have strategic support in those high-level conversations and understanding how to approach and do messaging. We also have a strategic account manager who will go into the high-level hospital systems and have those discussions how enterprise-wide they benefit financially and clinically from adopting our technology. And so it's very efficient and very effective. As I described before, we have the -- to me, we have the exact right number of people. They're structured the exact right way. And I would also say that we have the highest quality sales organization we've ever had because when you trim down the sales force and you do some shifting around, you take the opportunity to keep your best and brightest, and that's what we've been able to do. And so going into 2026, I feel really confident and excited about the team that we have commercially.

Well, finally then, as we do enter this next transition phase, this next stage, what key proof points will rebuild investor confidence in your mind and define the company's next stage of value creation?

Yes. I mean when you're the CEO of the company, you're looking at dashboard literally or in your mind of these are the catalysts. These are the drivers. This is the indication that I feel like we're making an impact and like that we've turned the corner and so on. But ultimately, for shareholders, they're not going to see the daily sales. They're not going to see that kind of a micro side of things. But if I -- if you're just going to look at one thing, look at revenue, I know what's behind the revenue. Utilization is behind the revenue and a lot of other efforts and a lot of other metrics that we're going to drive. The other thing I'll say is that in the past quarters, there's been some lumpiness and chunkiness to the orders, some larger orders coming. I think that we have learned some things about how our customers order, how we sell and present to them. I think that the -- there's a more organic -- not just this fourth quarter, but going forward, there's a more organic aspect to the orders. So I think it will be easy to see that in a given quarter, as the trajectory goes up that it's, I don't want to say, legitimate, but that it's consistent, I guess, and that you can count on that being an indication of what the next quarter should be. And I think in the past, if we've had -- case in point, if you go back to Q3 of 2024, which was a comparator to this past Q3, which was disappointing, the Q3 of 2024 was 19, and yet there were some larger orders in there that were associated with, I think, some customers buying ease-of-use because they thought that perhaps it would be going away, as we transition to RECELL GO, things like that. And so I think that going forward, if you're looking at revenue, let's say, of Q1, and it's at a certain level, I think you can expect that, that's the beginning of what will happen in Q2. And that's not just good for you to look at, but that's what I'll be looking at. So what I'm looking at should be the same thing you're looking at and vice versa. There shouldn't be any distance between what you're seeing and what I'm seeing, and so that's what I expect to happen in the coming quarters.

Thank you, Cary. And with that, let me hand you back to you for closing remarks.

Sure. I do see a raised hand here. So I'm not -- I want to make sure I'm addressing any other question. Am I able to see this?

Any questions just directed to the Q&A function.

Well, I don't know here, somebody's got their hand raise. I don't want to have a question left unanswered. So...

Okay. Let me -- so a question of clarification. In Slide 12, you talked about 3 boxes. Are those all active events or future goals? I believe these boxes carry out the 3 strengths that are current to our 200 focused accounts in the slide presentation.

Okay. We're doing on Slide 12. I'm not sure 3 boxes. Are these the 3 boxes? Yes, Slide 12, here we go. Yes, these are currently going on. As I indicated, we are currently active in 90% of those centers, which is great because there's a lot that is associated with just introducing yourself as a representative of the company, the company itself, the products going through validation in those hospitals, getting access to the hospitals. We're in them. So we have the relationships. We just need to drive expansion of those relationships as the second box that we do have about 1/3 of those centers currently have Cohealyx in their value analysis committee. We expect some of those, probably somewhat of a small amount to come out here in Q4 and the rest gradually throughout Q1 and even into Q2, and it will basically give us a license to sell in those hospitals. And then yes, I mean I talked about sustained and supportive case execution, our reps in the cases, trying to drive more cases, more physicians to utilize it, yes. So... I'm sorry, Ben, but do we want to address any of these others that are in the chat?

We are up against a time constraint. So perhaps if you want to say a few closing remarks, we'll happily take some -- a couple of these questions offline just for clarity sake.

Sure. Yes. I mean I'll just -- this one about U.S. revenue, depending on U.S. government reimbursement. We have about 70-some percent of the cases we do are under Medicare and Medicaid, and so it's about 70%. And then I think we talked about how we sell the structure and the process, how we sell in the hospitals, in the European markets, I think I talked about that. We are early days with new distributors being set up with champions. We did a case in Germany, which is exciting. We have a physician there that's a champion. Again, it's early days. We're going to learn some things and do some things that are going to help us in forward quarters and years really. So I think that's all I see.

There was one more to that end, are there any reimbursement issues with Cohealyx and PermeaDerm? Or were those problems related only to RECELL?

No. We don't expect those. Those are currently covered, and we haven't run into any of that.

And then there was one question from David Williams. I'm not sure if maybe that David, a little bit more clarity, but are the charges in CMS outpatient rates relevant to you? And if so, are you prepared? Not sure if I know the context of that.

Can you read it one more time, please?

Are the charges in CMS outpatient rates relevant to you? And if so, are you prepared?

Okay. I'm not sure I quite understand it, though.

David, if you're listening, we will have to follow up with that question.

Let's do that.

And I think with that, we've gone through the list.

Okay. Well, perfect. So I think a bit ago, you returned it to me for summary. So I'll do that. I think at the risk of repeating myself and the reason why I think it bears repeating is because this is going to be a very focused organization. It's what I do and what I've done in the past and what I intend to do going forward. I expect and plan and have already started to build a culture of accountability to drive consistent utilization, expanded utilization and predictable utilization in these accounts. And as it's predictable and as it's high performing, then I'm going to be able to be more predictable, I think, in my guidance and in my communication with in a very, I think, reasonable but exciting way going forward. I expect to have with David's help, but also with the help of our teams and our company we have a culture of not only productivity, but a culture of operational excellence and a lot of pride in what we do and our mission from a clinical and patient perspective. And people are what drive the growth of every organization. I can probably talk about it the least on these kinds of calls and any other business discussion. But the fact is every one of those employees that we have are going to be the best they can be. We're going to hire the best. We're going to expect the best from them, and they're going to do some really great work going forward and we're all going to benefit from it as well as the clinicians and the patients they serve. So thank you all for your attention and your engagement, for your support and for your investment. Our expectation is to continue to work really hard to earn your trust and to keep your trust going forward.