Bioventus Inc. (BVS) Earnings Call Transcript & Summary

Great. And we are back at the 42nd Annual Global Healthcare Conference, Goldman Sachs Second Day and we're going to continue our morning session on the medical technology side with an exciting new company that has recently IPO-ed by the name of Bioventus, and we're excited to have the CEO, Ken Reali on with us. And from my side, I have one of my partners on my team, Phil Coover on as well, who will handle a lot of the Q&A. But before we get there, Ken, first, just welcome -- warm welcome to you, first time at this conference, and we'll let you take over and maybe make some introductory remarks about the company.

Well, thank you, Amit, and thank you, Phil. It's terrific to be involved with the Goldman Sachs conference for the first time. And excited to talk about Bioventus. To give everyone a little bit of short history on Bioventus, this originally started as a division of Smith & Nephew back in the 2003, 2004 time frame. It was a division called clinical therapies that focused on unique areas in orthopedics that Smith & Nephew did not have at the time a sales force to really address. These were areas that were nonsurgical therapies at the time. And that division continued to matriculate and build where to the point where its growth precipitated it to be spun out of Smith & Nephew 9 years ago. And the company has continued to grow very nicely and very well since that time to the point where we took it public earlier this year in February. We are looking at our portfolio in 3 different verticals that I'll talk about today. The pain product and device area, the bone graft substitute area and then the restorative therapies area. And all of these areas are growth areas for us. Our mantra at Bioventus is consistent double-digit growth. We think with our strategy competing in white spaces in orthopedics where we have our strong product portfolio, a very strong sales force and committed sales force and strong market access that we can consistently win, we historically have achieved high single-digit growth organically, and we feel through our M&A products that we add over the course of time, we'll get to consistent double-digit growth. So that's a short description of Bioventus and who we are today. I'll turn it over to you, Phil, for your Q&A and look forward to answering your questions.

Awesome. Thanks, Ken. That was a great overview and a good place to start. I think we're going to keep it a bit higher level since this is your first participation with us, but we'll also try and sprinkle in some more topical content as well that I hope will be useful to investors. So you touched on it a bit in your intro, but I was hoping we could maybe start with market access before we get into the individual product segments. And talk about the development and the creation of the portfolio that you have in place today. So maybe just touch on for a minute or 2 how we got here from a portfolio development standpoint, where you see things going? And then also talk about the physician call points and how that plays into your broader strategy?

Sure. Well, I'll start with the physician call points, your last part of the question first and then talk about the evolution because I think it's important to understand the breadth of Bioventus is call points today. And one of the ways I describe this is we're a mile wide and an inch deep, meaning we call across the broad spectrum of orthopedics from sports medicine, total reconstruction surgeons, to foot and ankle, general orthopedic surgeon in traumatologist, all the way over to spine and neurosurgery. And part of our strategy is and broadening the portfolio actually is expanding the number of products that we sell to those specialties, which are very broad to begin with. The company historically started with one product in -- called Exogen and one product in HA called SUPARTZ. And what we've been able to do over the course of time, since that point, is expand our HA portfolio, where we're now not only the #2 player in the HA field of hyaluronic acid, but we also have the largest sales force, and we're the fastest grower consistently, so we continue to take market share there. On our Exogen ultrasound stimulation under the restorative therapies vertical, we are the #1 player and have been for some time based on the strength of our commercial efforts and the strength of the product itself. And on the bone graft substitute side, we are the fastest grower. Layered into that now with our acquisition of Bioness is peripheral nerve stimulation which falls into our pain vertical with HA, again, calling on that same customer especially for postsurgical pain and peripheral nerve stimulation, an important emerging area particularly with the opioid crisis and then the advanced rehabilitation area, which falls under restorative therapies, they have their own sales force, and we look forward to leveraging that more into orthopedics where it's been more of a neurological focused call point historically for Bioness.

Okay, super. Yes, I think that's a great frame up. And now let's kind of take each one of those pieces in its own part, and drill in a bit more. So we'll start with the largest segment, the pain treatment and joint preservation. So today, you touched on it. This is essentially your HA portfolio, which is a knee OA end market, which I think is pretty well-known at this point. It's an earlier treatment intervention. And so I think maybe it would be helpful just from a high level to sort of walk us through what a typical patient life cycle would be for knee OA and how they get to an HA injection treatment?

Sure. And as everyone probably knows the osteoarthritis market continues to grow with the aging population. And we've seen the market growth in HA continue to be in the 3% to 5% range. We've certainly grown historically faster than that. But HA is a very specific treatment. And let me explain the paradigm. Patient originally is diagnosed with osteoarthritis and usually has inflammation, they go to the doctor, they would get a steroid injection. As that progresses, in a lot of patients, unfortunately, it does. The cartilage weakens, the cartilage degenerates, and they're left with bone on bone situation, bone on bone, as you can imagine, is very painful. And hyaluronic acid provides a lubricant for that patient to relieve pain. And in some cases, depending on the patient, they might be too young for a total knee. So the surgeon and physician will do other therapies like hyaluronic acid to relieve the patient's pain, it's a do-no-harm procedure and then do a total knee down the road. On the corollary, some patients are too old for a total knee. They may have gotten osteoarthritis later in life and for other medical reasons, and a total knee is not a good option. That's another HA type patient that certainly benefits from this. HA is reimbursed by nearly all private payers as well as Medicare. And it's a therapy that is proven to be safe. They're all PMA-approved products with strong clinical data. And we have a portfolio of a single injection, DUROLANE, 3 injection called GELSYN and a 5 injection historically, it's our original product called SUPARTZ.

Great. That's super. I think maybe we can start with where you ended and talk about how the treatment regimen is kind of changing for HA injections kind of structurally for the market?

Yes. Good question, Phil. And the market with the pandemic over the past year has shifted more towards single injection. As you can imagine, patient only has to visit the doctor's office once every 6 months to get an injection. In our case, it's our DUROLANE product versus a 3-week in a row regimen with GELSYN or 5 weeks in a row with SUPARTZ. What we don't know today is if that evolution that seems to have accelerated, is going to be sticky or not or as the pandemic recedes are we going to see patients and physicians go back to their normal activity. Some physicians like to bill for multiple office visits as one point while they would use multiple injections, some patients prefer the multiple injections for other reasons. Insurance may dictate as well whether they get a single 3 or 5 injection. For us, it's important to know that we're agnostic to the type of therapy, HA therapy they choose. From a revenue perspective, whether it's our single injection, DUROLANE or the GELSYN 3 injection or SUPARTZ 5 injection, they're equivalent from a revenue and margin perspective for us. So we give the physician free choice. There's no incentive whatsoever on our side, it gives us the best of both worlds in that regard.

Okay. All right. That's super. And you touched on a good bit of it, but I think maybe it would be helpful now to just bring in recovery dynamics and talk about what you're kind of seeing in the market today and sort of how those dynamics from the different regimens is kind of playing out?

Yes. As we highlighted in our first quarter call, we saw softness in the beginning of the quarter. And then by the second half of March, we really saw significant growth and a return to some normalcy. And certainly, those trends have continued for us. So we're pretty excited about what we're seeing. We're cautiously optimistic that by the second half of the year, we'll see full restoration back to normalcy in terms of recovery. And it's important to remember the type of patient that we're talking about here with HA. This is an older patient generally. And you can imagine with the vaccines coming out in the early part of the year and the focus on these older patients that by the second half of March, those are the type of people that were vaccinated that felt comfortable going back to the doctor's office. I think that goes hand-in-hand with our return to significant growth in this area. So -- we always like to say, as long as the patients feel comfortable going to the physician's office our business is going to be in good shape. And certainly, we've seen that comfort level return, and we expect a full return by the second half of the year or so.

Okay. All right. That's a great update there. I think we haven't really touched on share dynamics. But I think as we talk about the outlook here, maybe we could bring share into the mix. So the question from an outlook perspective is just not only to give your guidance for the year for the segment, but also sort of touch on where that puts you versus 2019 levels and then talk about maybe a little bit longer term, where do you see kind of the growth rate of this business as you continue to take share and maybe we've shared dynamics into that and how you all are doing from a market relative perspective.

Sure. Well, to answer the last part first, we are the #2 player in the HA area based on 2020 data through Q4, and very proud of that fact. If you break it down by product area, we don't really give market shares. But I will tell you in terms of where we rank per product. But DUROLANE is new in its product life cycle in the United States. It was just cleared in 2018 approved by FDA at that time. We have about 18% of the single injection market today. If we compare that to SUPARTZ, which is our 5 injection, which has about 40%, 45% of the 5 injection market which is something that's been established over years. We think that's a good benchmark, which tells us we have a long way to go to continue to grow DUROLANE. And with the nature of the product, and this is not a commodity business. Now enforce that. A lot of people feel HA, you hear those comments. DUROLANE is a proprietary single injection that has been shown to have superior resonance time in the knee which is why it works consistently for 6 months in pain relief. So we feel very good about where DUROLANE is going. GELSYN continues to grab market share in the 3 injection market, which has been under some stress like the 5 injection because of the pandemic, but we do see that returning to consistent growth. And then the 5 injection SUPARTZ, we expect to continue to grow as the market grows on 5 injection and hold our market share there, which we've been able to consistently do. So we haven't broken out HA necessarily as a full year guidance perspective, but we do expect to return, fill the normalcy here in the second half of the year, and like the trends we saw in March, we've continued to see very good things in HA.

Okay. But it is the case that we have segment level detail for what you all are expecting within your broader guidance, right? Can you just inform everybody on the call of what that is for the entire joint preservation division?

I don't have that in front of me.

Okay. All right. No worries. Let's go ahead and move on to the pipeline in OA, which I think is really interesting and a lot to touch on there. So we'll first start with MOTYS. I think maybe it would be helpful just to give, again, a kind of an introductory, talk about where this fits into the treatment paradigm versus where we were talking about with HA. And then we'll circle back to kind of where we are from a data perspective thing.

Yes, sure. So MOTYS is a placental tissue injection product that we started pursuing a BLA approval for earlier this year. We started a clinical study Phil, an IND that is underway, is a Phase I study. We'll start the Phase II study here in the third quarter outside the U.S. and this is a -- I talked earlier about steroid injections used for -- to treat inflammation for early onset osteoarthritis. And that's what MOTYS would be replaced for. Now why would you want to do that? A lot of steroids actually have been shown to not help in terms of cartilage degeneration and actually the opposite. They can have degenerative effects on the cartilage. MOTYS does not do that. The studies, the early studies have shown that placental tissue like this can actually have a positive effect on cartilage regeneration. Now we need to prove that. And that's part of the reason we're doing advanced clinical studies and pursuing the BLA is to show that through clinical data and get an approval that hopefully not just will be an anti-inflammatory injection, but the ability to regenerate cartilage on early onset OA. Again, this is not overlapping the HA market, which, as we talked about, our people that have advanced HA with cartilage, significant cartilage that has degenerated where it's bone-on-bone.

Okay. That's super. And you're pursuing a dual path strategy with that BLA in place, but you're already participating in the cash pay market. So I think it would be helpful. We saw the data, clinical evidence continues to accumulate for the product. You had recent rat model, but you're already active and inpatient for your IDN study. So I think it would be helpful to talk about what you're seeking to accomplish with your clinical evidence that you're still accumulating? And sort of talk more to that dual strategy?

Right. Well, the dual strategy has changed a little bit, Phil, based on the current FDA guidance. So we are not pursuing the cash pay market with MOTYS any longer. We decided based on FDA guidance to not pursue that route. We launched it last fall on a limited basis. And based on the recent guidance and statements from FDA, we pulled back on that and are strictly pursuing what FDA has requested, which is a BLA approval. We did collect some early good clinical data based on the data we've gathered from last fall and early this year, but at this point in time, and until we receive the BLA, we're not going to be selling MOTYS until it's approved through the BLA process.

Okay. All right. That's helpful. Maybe we can -- we'll circle back to kind of sizing the opportunity in a little bit, but maybe we can touch on the other key pipeline opportunities that you have in the OA. Just maybe quickly on the PROcuff product, touch on what it is, the competition that you're going to meet help it maybe size the market and we can touch on catalysts after that?

Yes. So PROcuff is a biologic solution for rotator cuff repair. There's roughly 0.5 million of these done every year in the United States. Competition out there is the standard procedures for rotator cuff repair, which involve interference screws and hardware. And there is some other biologics solutions out there, one in particular, by Smith & Nephew that PROcuff would actually compete against. We see this as synergistic with our biologic approach in orthopedics and are very excited about what this can represent from a call point perspective because the same sports medicine physicians that we call on for HA certainly do rotator cuff repairs, and that's part of the synergy and the expansion of our portfolio that we see. Again, this is slated to be cleared by FDA in the second half of last -- of next year of 2022. We are pursuing a large animal study now, which is the key metric to receive the eventual 510(k) clearance.

Okay. All right. That's super. I think you covered pretty much everything on that front. And then maybe we can talk about CartiHeal, your relationship with the company and the Agili-C product. Basically the same question where it fits into the treatment paradigm and then help us understand kind of the next steps there.

Yes. A great question on that, Phil. So if you think about that treatment paradigm, you have MOTYS on one end, which would be used for early onset osteoarthritis, then you have HA which is used more for bone-on-bone and more severe arthritis where the cartilage is degenerated. And then on the other end of the spectrum before a total knee, would be CartiHeal or the Agili-C implant. And this is used specifically for osteochondral defects. I say specifically because that's the indication, but the market is quite large. The total addressable market is about -- represents about $1.3 billion. This is a huge problem. A lot of these patients go on and just have a total knee procedure without this interim opportunity. The Agili-C implant presents a do-no-harm procedure, meaning a physician can implant the Agili-C, and if it works it relieves the patient's pain, they avoid a total knee for 2, 3, 4, 5 years or even longer. Obviously, if it doesn't work, the patient comes back with pain, they can go ahead and do a total knee. So from a treatment paradigm perspective, for us, it's the same call point, the same total joint reconstructive surgeons, sports medicine surgeons, that treat and use our HA product that would use PROcuff, use MOTYS, would use the CartiHeal/Agili-C implant as well. This is a breakthrough product. It's designated as a breakthrough technology by FDA. And CartiHeal is pursuing the modular PMA approval and submitting the modules as we go forward. Continue to expect FDA approval on this by the second half of next year.

Okay. All right. That's great. Maybe you can take it back higher level for us and talk about the potential impact of these 3 pretty meaningful opportunities. Just give us a sense for sort of what's baked into your forward estimates from your perspective, how big some of these opportunities are quite large, try and help us understand sort of a rank order of how much of a contribution they could make and over kind of what time frame you guys are thinking about?

Sure. Well, they're all in development now, and it's a medium-term play on these products, meaning over the course of the next 3 to 5 years, they're all going to hit and hit the market and start penetrating the market, leveraging our commercial channel today. Obviously, the biggest opportunity of those, I would say, is the CartiHeal with the Agili-C implant just because what it represents in terms of the ability to prevent a total knee procedure, delay a total knee procedure, in the price point, it will be at as well. We haven't decided on the final price, but the price point will be one that demonstrates the value that it provides. MOTYS clearly is the next and offers a broad opportunity for a much broader group in osteoarthritis and we expect approval on that in the next 4 or 5 years as we pursue the BLA approval. And then PROcuff, as I said, represents a significant opportunity in rotator cuff, albeit not as large numbers, but very highly synergistic, we expect 510(k) clearance on that second half of next year. So that's the way I'd look at it, Phil. We feel very strongly, and this kind of parlays a little bit into our M&A strategy that with what we've been able to see in our M&A pipeline that we can continue to drive to double-digit growth, bridging from our historic high single-digit growth through M&A, bringing in additional products that are commercialized now, coupled with this pipeline, which will drive longer-term growth. And that's the great opportunity we see with our company is near-term growth opportunities, double digit, coupled with that pipeline that will deliver out for many years to come, particularly with what we have in CartiHeal, MOTYS and PROcuff.

We're having a little bit of audio issue. Hopefully, we can resolve that. But I think that's actually probably a pretty good transition over to a pretty notable recent M&A that you had on the Bioness side. I think we'll get there on the restorative therapies. I think we'll get to Bioness here in a second, but maybe we can start with the Exogen system, one of your original cornerstone products, as you said. Just give us a little bit of background again, and then we'll hop into maybe the patient journey, how a patient would get to the Exogen system.

Sure. Yes. And as you said, Phil, Exogen falls under our restorative therapies vertical. It's a product that the company has had historically for a long time. It is the #1 stimulator for long bone fracture treatment. And from our perspective, there is nothing even on the horizon that would replace what Exogen can do, and it's important to note that. The use of Exogen is historically used in both delayed and nonunion fractures. So these are patients typically that have had a date of injury anywhere from 6 months to 12 months on average, sometimes a little more, sometimes a little less since the date of injury and the fracture hasn't healed. And maybe they've tried surgery, maybe they have not, but Exogen is a way to heal these patients through a less invasive means. It grabbed #1 market share in this space after having been the last entrant. If you look at the electrical stimulators that are on the market today, they all have been out in the market for many years before Exogen came on the market. Exogen has taken the #1 spot because of the strength of the technology and the clinical data, which is pretty unequivocal and the published data showing the viability of its mechanism of action and how it works to heal bone. So it's a huge factor for many patients. If you talk to a patient that's benefited from Exogen it's really a device that has changed their life for the better and improved their life, particularly with a fracture situation that maybe has changed their life, not allow them to work, or pursue the activities that they'd like. So typical patient journey, Phil, is exactly that. Exogen is a durable medical product. We take assignment of benefit as a company and we'll bill the payer directly. We have multiple payer insurance contracts, hundreds actually. And we also bill Medicare for this as well. It's a onetime charge. It's not a rental, and the patient can use the device for as long as they need to until they're healed. And that's the typical journey. We do a lot of servicing for this for the patient in terms of calling their insurance company and our sales force gets involved in educating the patient on how to properly use the device, make sure that the transducer, which emits, its around disk, emits the signal, is placed over the fracture, and then they use it 20 minutes a day. So it's a fairly routine, easy to use device that has made a big difference in the market. We expect consistent low to mid single-digit growth with Exogen. And we think we'll start continuing to achieve that. It was impacted by the pandemic, probably from a delayed fashion simply because activity slowed down with a shutdown last year, but you figure since date of injury is typically 6 to 12 months post when Exogen is prescribed, we're actually just starting to see Exogen regain momentum, and we're pretty excited about that.

Okay. That's super. You hit on a lot of the key points I was going to ask. So that's great. Maybe we can touch on risks and opportunities quickly. So there's noise out that the deep down classification and the potential for that to come through. Can you talk about it, just a little bit of context for a second? And then also why you feel you're well positioned if that does come through?

Sure. Yes. The context is the FDA had a panel meeting last September, to review bone growth stimulators and decide whether they should be downclassed from Class III to Class II with some type of stipulation around clinical data. That is where the panel ended up although there's been no timetable given by FDA on when and if the down class is going to happen. So that is an open question, Phil. I guess, run it both ways. If it happens, we think it's fairly neutral to our business. We feel that the barriers to entry competitively are significant and actually FDA approval or clearance is one of the lowest bars, I'd say, the higher bars are around access to payers, setting up systems that allow you to bill payers with contracts including Medicare, calling on physicians to prescribe Exogen and working with physician ancillary staff to get all the paperwork processed prior to the unit being applied, educating the patient on how to do this. This takes a significant amount of infrastructure, not just commercially, but the back office side of it. So we don't see the down class as a near-term threat if it does happen because of all these other barriers to entry, in fact, it may open the door for a company like us to pursue new indications with additional clinical data beyond what we're doing with the bone study today to expand the indications for Exogen more rapidly, which, with our infrastructure, could actually be a win for us. So we'll see where it plays out. But for us, we view it as fairly neutral to the business at this point.

Okay. All right. That's great. I think in the interest of the time, we have more we could ask there, but let's move on to the recent Bioness transaction. I think for us, it would be most helpful to give just a bit of background, but also touch on the deal rationale, how it fits into the portfolio and some context around sales growth and then targets from your perspective as you move forward?

Yes, absolutely, Phil. So one of the key pieces to Bioness that interested us way back last summer when we were looking at adjacencies is peripheral nerve stimulation. Peripheral nerve stimulation is an emerging area to relieve pain, particularly with the opioid crisis, having such an impact on orthopedics today. This is an alternative way to treat postsurgical pain and chronic pain in orthopedics. With our call point in -- with sports medicine surgeons, total reconstruction, foot and ankle surgeons, in particular, there's an amazing synergy with the device that Bioness has called StimRouter and their next-generation device called TalisMann, the market opportunity is around -- the total addressable market, $6 billion. Now that includes some areas outside of orthopedics, like overactive bladder, which is an area we'd probably license out. But from our perspective, this is a significant emerging area with good reimbursement that fits our call point in commercial channel. That was one of the original impetus in our interest in Bioness, what happened as we got into serious discussions, and we did our diligence is the advanced rehabilitation business was looked at, and we realized the synergies there, particularly with these advanced rehab products that restore patient gate. Bioness has historically sold this for post-stroke patients, head injury, other types of injuries of the brain that cause gate disturbance but there's a significant synergy with osteoarthritis patients, particularly where your quadriceps muscle is weakened. So that's where we see amazing synergy as well with that product. It is another durable medical product, so we can leverage and have synergy with the infrastructure we have with Exogen on billing for durable medical products. So that's some of the genesis around Bioness. The integration is going quite well. We're starting to see really good signs with our sales force. We started a pilot with the StimRouter peripheral nerve stimulation device and starting to see really good inroads being made with our sales team, coupled with the Bioness team with that product.

Okay. Super. That's a great strategic review. I think just for one second, maybe touch on the numbers to give us some context that the size of the business when you purchased it, what you think from sort of a growth outlook perspective and any cost synergies or revenue synergies that you all have talked about publicly?

Right. The 2020 revenue was $40 million. Historically, the rehabilitation business, which is the majority of the business today because StimRouter was just launched a couple of years ago, has grown in double digits. It was impacted by the pandemic, but we see it getting back to double digits as we continue to go through the integration process. What we have guided is that it will be neutral to EBITDA within a year of the acquisition, and we're working towards that and making great strides. So I don't see that as being a problem. And then obviously, post that, contributing positively to our EBITDA. On the revenue growth side as well with the advanced rehab getting back to double digits and then the PNS device as we launch it into our broader sales team at Bioventus, we're pretty excited about the inroads we can make with postsurgical pain and what that represents growth wise. We do view the Bioness acquisition as being able to get us to -- one element to get us to consistent double-digit growth. So that was the impetus for that acquisition. And certainly, that is something as we go forward we're pretty excited about seeing.

That's super. I think that was a great overview. And maybe in the last 5 minutes, we can move on to your final segment and then leave a minute at the end for kind of a financial overview real quick. So your bone graft substitutes, I think, is pretty well-known market with a lot of large players. So I think people are pretty familiar, maybe a little bit less familiar with Bioventus participation is still a relatively small but shared gainer. Can you talk about the portfolio and what your team is doing to drive share gains and to be one of the fastest growers in the space.

So we have a very broad portfolio here that consists of both allograft products that have osteoinductive capabilities, growth factors because they're minimally manipulated with different types of formulations to synthetics. So we offer the whole portfolio. And this is important because when you do a whole hospital conversion, which we typically do, different surgeons want different products based on the type of pathology, the type of fusion they're doing. We also continue to iterate this area, and we do have a flowable version of OSTEOAMP, which is our lead product coming out in July, and that's -- we've been doing cases with this for a while. This is unique because it allows a physician to inject into this disc space, appeal specifically to minimally invasive spine surgeons, which is the fastest-growing area in spine fusions today. So we're pretty excited about what that can mean. We continue to see other builds in our portfolio in this area. But how we win in this space is, I think, unique. We are not a spine hardware company, and we don't plan on being, we're focused on bone graft substitutes. And like our HA business, our stimulation business or peripheral nerve stimulation, these are relatively white spaces in orthopedics where we have a strong commercial channel, a strong product lineup, and that's how we win. And that's no different in bone graft substitutes. Being agnostic to spine hardware allows us to actually appeal to a broader group of surgeons, that can align around the type of bone graft substitute their hospital purchases. This can often save the hospital significant money on their budget in bone graft substitutes, and then the surgeons go and can make their play for the spine hardware that they're looking for. But I think at the end of the day, the execution on our strategy in this area has been paramount, and it's contributing to our success. We see a long runway of continued growth here. As you said, Phil, we're just scratching the surface on market share, but we see ourselves being able to continue to grow at the rates that we have.

Okay. That's super. Maybe one minute on the recovery dynamics you all were able to grow last year in spite of very significant volume headwinds, obviously. I'm just hoping you can touch on what you've seen in recent months and maybe any update on how things have progressed into 2Q so far.

Yes. We -- it's a credit to our sales team and incredible execution. We grew in 3 out of the 4 quarters last year, Q2 being the only one for obvious reasons. And certainly, this year, coupled with what we've seen in the second half of March have continued to see very good growth trends in our business. So we predicted that our business will be back running on all cylinders and are cautiously optimistic by the second half of the year. But we continue to see very positive things, and trends in the business that we saw in March. So, so far, so good. And I think if people continue to get vaccinated, and the patient population that we serve continue to feel comfortable going to the doctor's offices, we should be in good shape.

Okay. All right. That's great. I think that will do really well. For that division, we'll touch on financial just for the last couple of minutes that we have here. You've hinted multiple times at kind of the longer-term view for the top line and durably growing double digits. 2 quarters out of the blocks, you guys have outperformed at both instances and raised guidance already just 1 quarter into 2021. Maybe you can just talk broadly about the guidance that you guys have put forth this year. What you saw in 1Q that gave you the confidence to raise numbers, and then we can touch a little bit on the margin profile after that?

Sure. Yes. The guidance is based on a second half of the year, come back, full, come back in the business, Phil. Clearly, we're able to add to our guidance based on some of the near-term things we saw in the second half of March. Predicated also on the Bioness acquisition, having -- going through integration is never easy. So we did figure flatness in the Bioness revenue as we go through integration, and we felt that was a conservative thing to do with our guidance for the full year. That integration, as I said, is going well, and the team is very engaged with Bioness, and I think they're excited to be part of Bioventus. So that has all gone well from that perspective. But that's the genesis of our guidance.

Okay, super. And then just maybe some high-level comments on the margin profile, the impact through the pandemic and then kind of the longer-term view on where adjusted EBITDA margins can go for the company.

Yes. The first quarter, obviously, going public, we had some onetime events that drove our EBITDA margin slightly down versus historical trends. But we do see the business getting back to those trends, and some of this is timing based on timing of the year or 2 when different expenses hit. And we consistently, if you look historically, build on our EBITDA margin as we go through the year. So we expect that to be no different this year. Our priority is revenue growth first and double-digit growth. And secondary, we know that EBITDA growth will follow. And certainly, we're going to continue to do accretive acquisitions that will follow that theme. And we feel that's a theme that will drive ultimate value to our shareholders. Getting the growth and then getting the pull-through on EBITDA as we go forward and consolidate and integrate our acquisitions.

Okay, super. Obviously, we could go much longer, but I think we're out of time, so we'll have to leave it there. Thanks so much, and we appreciate you participating in the conference this year.

Yes. Thank you, Phil. Appreciate it very much. Take care. Bye-Bye.

Awesome. Thank you.