Inspire Medical Systems, Inc. (INSP) Earnings Call Transcript & Summary

All right. I think we're ready to get going here with our last medical device session of the afternoon. I am Amit Hazan, the medical technology analyst at Goldman Sachs. And I'm happy to be joined, first foremost, by my partner -- one of my partners on the team, Phil Coover, all the way over there, and really excited to be doing this next conversation. One of our favorite companies in med tech, for sure in the last couple of years. We love these guys. I think many people do, and we love their story. It's Inspire. We've got both the CEO, Tim Herbert; and the CFO, Rick Buchholz, here with us live, which is something we were just discussing. So it's time to just see you in person. It's the first time we met since we picked up coverage of your stock, which is kind of crazy.

Yes, but definitely on Zoom. Thank you very much for having us. It's great to be here.

Yes. Well, we're really happy to have you. And not surprisingly, we started these conversations with a little bit of the macro just because that's what's on everybody's minds. And you guys have been really good in the past in not just talking about your business but just giving us a sense of how things are out there at, at least, hospital outpatient facilities. And so I thought I'd just ask you that first. Just give us a sense, to the extent you can, high level, how the environment has been since we last talked to you.

Absolutely. We had great meetings all day today. And the key theme that we really wanted to get across to people is really the concept of stability. And the key is dealing with all the economic and the world situation today. It just takes a little bit of discipline and be able to get through that. I'll give you a couple of examples, supply chain. We don't have the same factors some of the larger companies have. We only have to deal with our neuro stimulator and our patient remote. So we have a limited scope to deal with our supply chain, but we've had the same problems as everybody else: the resins molding for the patient remote, lithium for batteries, electronic components. But we're able to overcome that because we really got on top of them all. So we have a great safety stock right now, both in finished goods as well as in WIP, work-in-progress, as well as authorization to our vendors to do long lead buys to be able to address supply chain. So we have taken that risk off the table, that's good. The COVID environment doesn't go away, but it changes. COVID isn't as severe as it was. It doesn't cause the hospitalizations and the delayed treatments. It doesn't scare people away from going in and getting their necessary health care, and so we're past that. So when we increase our guidance, we don't no longer put in a factor for COVID anymore. We're able to kind of say we're going to be able to work through this. Staffing is an interesting issue. Some people talk about having staffing issues to be able to program or get cases scheduled in the OR. We don't have that challenge. We have staffing issues with administrative staff at ETF, it's to get patients scheduled for their first appointment. And then even from internally from our standpoint, we have 600 employees. Now, we have 100 open reps. And our ability to recruit those employees from a sales standpoint is pretty good, but it's so difficult to recruit software engineers because we have such a digital program going. That world is changing as we speak. And all of a sudden, you're seeing with the environment that we have, people are pulling back. And all of a sudden, the ability to find that talent is there all of sudden. So the world is changing, but I think we're in a really strong position to stay on top of it. And we wanted to get the message across to the important investors that its stability. We're able to run our program because we're able to control a lot of the underlying factors.

Can I add to that. Regarding from kind of macroeconomic from an interest rate perspective, we have $25 million in debt. So we don't have a lot of debt. We have a really strong balance sheet. We've earned just $10 million all of 2021. And so from an interest rate perspective, we just have a small amount of debt.

And your cash position?

Cash position, $213 million at the end of the first quarter.

[indiscernible]

Well, in the fourth quarter, we had a positive EBITDA, actually generated cash flow positive in the fourth quarter with a relatively strong leverage. We have seasonality. So that leverage diminished in the first quarter, yet we still had more leverage in the first quarter of '22 over '21.

Okay. And backlog, I don't know if this, if you -- how closely you track it, but just in terms of the residual backlog remaining, we know that we had the Omicron wave come through earlier in the year. Is that pretty much done? Or how do you feel about kind of where we are from what the impact goes back in?

In the United States, I think we pretty much have it handled. January was tough both because of our seasonality and the COVID, and probably that carried through about mid-Feb. But then we spent most of the second half of February and all of March really working through that backlog. But all the new patients that we identified, brought to the website in the first quarter didn't get an opportunity to get to their impacts. That gets pushed into the second quarter. So while we talk about backlog being those patients with delayed cases, really, it's carrying forward into the second quarter with the new patients. But I think we're really on top of that right now. We're able to get the cases scheduled. Before, we've talked about the time from when a patient makes a phone to when they get implanted it was running at about 4 months. And I think when we got into the COVID situation and our seasonality, that pushed to as much as 6 months. Now we're getting it back down to 4 months. Our goal is to get that even lower. And the sooner we can get patients their appointments and get their therapy, the less likely they are to lose that. So Europe is a little longer to work through the backlog, but I think we're doing a pretty good shape there, too.

Okay. Okay. So I guess in kind of this high-level discussion, we can talk about pricing to inflation and pricing for you, you took price up -- you discussed taking price up in the first quarter. Maybe just give us a sense of how that's been going and just talk us through the financial impact of that, what the -- what's customer feedback has been.

Sure. So we implemented a 5% price increase on May 1. We talked about on our earnings call that, that will take a while to implement because we have various pricing agreements with different hospitals and hospital systems. And so they all have different notice periods. And so the real true impact of that price increase will be felt in 2020, although we are seeing some small impact now. From average selling price, $23,800, that will go up about $1,000 closer to $25,000 once that price increase is implemented. And we haven't had a lot of pushback, really, per se, even -- we haven't had a price increase in over 4 years. And over that 4-year period, the hospital facility, Medicare average reimbursement has increased 9% over that same time frame. So it's been going well. I would like to get a shout out to our pricing and legal team for helping implement that because it's no small task in a growing company, but it's going well.

Okay. Okay. So let's talk about guidance for a couple of minutes and then let Phil take over with a lot of the commercial questions. But I just, you kind of -- if we think about the recent increase, and that's a consistent theme for you, but the recent increase is roughly $80 million at the midpoint, maybe talk about kind of the upsides and downsides that go into your guidance range and how you think about putting it together, just given everything going on especially these days. If you can give us a little bit of that.

We wanted to focus on the run rates that we had and focus on knowing what a difficult January, February had and coming out of the second half of February, end of March, and the strong momentum that we had and we wanted to relay that to everybody to say we have confidence going forward for the rest of the year. So we did take that guidance up to be able to show the confidence in that we wanted to focus on the revenue. So we left the guidance for the number of centers and a number of territory managers consistent going through, but knowing that we saw a strong DTC in the first quarter because we started that national campaign with fresh messaging. We had 4.7 million people come to our website in the first quarter, and 24,000 people reach out to make an appointment with a physician in the first quarter So we had confidence in the run rates going forward that we're able to take that guidance forward. The COVID we mentioned before, we don't see COVID having an impact for the rest of the year. So we didn't feel like we needed to be conservative to that. We also had comfort on where we stood from a supply chain. I'm repeating myself. But we also knew that we're able to schedule these cases to be able to support that, again, with the staffing issues at the hospital because it is a profitable procedure for the hospitals and the ambulatory surgical centers. And so that's where we have the confidence to be able to take that guidance up.

It's an interesting point. You left center guidance unchanged, but we have sales guidance up materially. There's an implication that utilization embedded in that model has improved or increased. I know we often have difficulty parsing up the dilution from new centers. Can you kind of talk to those trends generally and talk about the implication for that stronger utilization underlying?

We like balance in how we're operating the business. So we like to balance between the percent of our growth being from opening new centers as well as the balance from increasing utilization at existing centers. And it's a little bit of a mathematical challenge because the overall utilization gets diluted by adding a lot more centers than the denominator. Granted during COVID, we did clean up a little bit. And so we're in the take down 25 sites that haven't done any utilization in the 1.5, 2 years, anyways. We want to keep that focus, and we develop programs for our territory managers or our sales reps to increase the utilization at existing centers. And so as they don't focus on opening new centers, that responsibility is held by a different group called area business managers. Their job is to hunt new centers and make sure that we are able to scale up the number of centers that we have, and the sales rep's job is to drive patient flow and increase utilization at existing centers. So the 2 elements do compete a little bit each other. But I think we're very successful at increasing the utilization. That's what we're going see going forward. That's a key part of setting that guidance going forward and the key message without increasing the number of centers. So I think your question really kind of leans into the message that we're trying to deliver that. It is a focus on increasing utilization. And if we can get centers to commit 2 OR days a month. We can do 4, as many 6 cases a month at a center. And by doing that number centers the certainly gets more proficient at during the procedure, the sleep doctors and the sleep technicians get more accomplished in programming the devices and learning the techniques to be so effective. The people that do the billing and the coating and the hospital get used to building the proper codes to get the proper reimbursement. The OR staff knows what sterile trays to have in the operating room. So it's only by driving the utilization can you get everybody proficient in their jobs which the end goal is our overall target is protecting strong patient outcomes, which is what it's all about.

Fantastic answer. Multiple follow-ups on that front. So you brought up the pruning of centers. Should we expect any more inactive centers to be pruned over kind of the near term, medium term?

We will always -- can do that. We don't prune the centers, the centers prune themselves. And so it's very easy for us to look back and what centers haven't done any implants over the last 2 years, over the last 1.5 years. And then we go and say, "What's going on here?" And the majority of the time, the surgeon has moved across the street to a different hospital and they're recruiting a new surgeon, but they don't have one today. Well, let's put you on hold. And so when we close down those centers, we actually just deactivate them. We don't close them down. We don't cancel the contract, cancel the value committee because the ones that we closed a couple of years ago, those are becoming active again because they've hired a new surgeon. We've gone back in. We started the B&A. We train the centers from the beginning of the 6 modules that a site has to go through. We take them through all 6 modules again with the expectation that they will be up at utilization. So we'll always look to -- look what centers are unable to treat patients. Beyond that, there are centers that will come on and off our website because if they're unable to make appointments with patients, they will come off our website. So those sites that are on our website are those that can take care of patients. So it's not just the underlying 25 pruning, there's also an active group on the website as well.

Okay. All right. That's helpful. A couple more on the utilization front, the two-incision approach. If you can talk about it and anecdotally, what it's doing to utilization for those surgeons that it sounds like basically 100% have adopted at this point.

It's 100% conversion. In fact, when we go to Asia, right now, we're opening up, we've done the first implant in Japan. We're scheduling additional cases at 3 other hospitals there. We've done the first 3 implants in Singapore. And so when we get to Asia, we're only teaching two-incision. What it is, is we used to place the pressure sensor in the fourth or sixth intercostal space further down. But if you think about our surgeons, they're head and neck surgeons, they can go to the collar bone and place the neurostimulator. But going further down into the chest, they do it, they're trained, they're very skilled, they can handle that. But by doing the two-incision, they place the sensor just underneath the neurostimulator in the first intercostal space. It's done under direct visualization. They can place it properly and they can keep it away from some of the nerve, so it's even more comfortable for the patient. Obviously, a patient has one less incision to heal. So it's more comfortable for the patient, and it took a half hour off the procedure. It's going from 2 hours down to 90 minutes. And the top surgeons are doing it close to an hour now today. Our next step is we're going to take the pressure sensor, and we're going to take the sensing technology and put it inside the neurostimulator. And that's going to be the fifth generation neurostimulator. And that's going to reduce the OR time another significant amount, as much as 20, 30 minutes.

Okay. That's really helpful. We'll circle back to the pipeline. And a little bit, a couple more underlying drivers, I think that are worth noting. I always say questions. I know it's challenging for you guys to pin it down specifically, but the CPAP shortage is going on, the Philips recall. Just what can you say about the benefit that you've seen as a result of it and kind of how you try to quantify or estimate the impact?

We stayed away from quantifying, and we've been very consistent about that. But we know that there's a benefit to it, and we know that there are patients who are unable to use their CPAP device, and that's okay because we can get them approved for Medicare for the commercial payers. We know that there are patients who have been newly diagnosed and cannot get a CPAP device, and we can bypass and get them approved. So we know that there's a little bit of a benefit. We're not too worried about it in the short term. The benefit is more long term, whereas we're changing the way -- or I should say, Philips is changing the way sleep physicians are looking at treating sleep apnea. This past week in Charlotte was the AASM Meeting, American Academy of Sleep Medicine, the sleep society. There's another company ApneaMed who's talking about a new drug to treat obstructive sleep apnea, and that resonates well with pulmonologists. And so the discussion is changing. It's no longer CPAP's one therapy to treat sleep apnea. Now we have a host of therapies. We possibly could have a drug many years down the road. There's CPAP, there's Inspire, there's other therapies. And it really kind of elevates Inspire in the overall discussion. That's the long-term benefit of what this recall is doing. I'm not worried about the tailwind we're getting right now or the potential for a headwind, if all of the sudden there's immediate supply of CPAP devices. I don't think it's going to affect us one bit. The number of patients that we have come to a website, the demand that we have for patients to get an appointment with a physician continues to grow, and we're working very hard to get those patients an appointment to see a health care provider.

Okay. That's helpful. Another tailwind that we should highlight, the reimbursement front, new codes that went into place and also on the die side. Can you just talk to the benefits that you've seen, anecdotes from customers about the importance of it.

Certainly, it goes back to our theme of stability today. We have a brand-new category 1 code took effect January 1. When a new code gets put in place, you have to work through all the logistics. We have to work with UnitedHealthcare, Anthem, Blue Cross Blue Shield, all the Medicare MACs. They have to go into their software and change the codes to put the new codes in place. We also had a brand-new category 1 code for the drug-induced sleep endoscopy procedures. So here's a new code that hadn't been previously recognized. So we got to get all those into the system, then we have to work with all the physician offices and all the hospitals and the ambulatory surgical centers to make sure they're building software users a new code. So we have all that taken care of. The logistics are done. We now have a stable brand-new category 1 code, stable payment for the ambulatory surgical centers, for the hospitals and for the surgeon. So it's been a long time working through this coding issue, but now we have consistent payment across the board.

That's very helpful. I think maybe we encapsulate all of that. You guys are pushing the pedal pretty hard on DTC spending. Can you help explain sort of where you guys are today in DTC spending and how you try to quantify the return on investment that you guys are getting there?

Sure. So we continue to lean forward as we have. We increased our spend by about 70% in 2021. We're continuing to spend aggressively in DTC, but we are seeing the results of that. In the first quarter, we actually spent about $15 million. But -- and part of that change was moving to a national campaign. In the first quarter, we had about 4.7 million website visits, and that was up over 170% from the first quarter of the previous year. We had just over 7 million all of '21. And so what we're working on is really the conversion of those website visits into physician contacts, and so we're learning more on that on a daily and monthly basis. Those doctor contacts have increased mainly because we have -- now have over, about 90% of our centers on our adviser call Advisor Care Program, which has been very effective. And so we're looking at every aspect of the patient's journey through that, through the time from making a phone call and receiving Inspire therapy. That time frame is in about a 4-month window currently, maybe it's expanded a little bit because of COVID, but we're working on that. We see the return on that, and we'll continue to increase that. But as we increase our sales volumes, those customer acquisition costs will come down over time.

Okay. I'm going to comment on that to add to that is we know have centers in most of our states, and we have one more state. We have cases scheduled in Rhode Island. It's going to be the last state other than once they do their case, we're going to have all 50 states. So we've got the national coverage to be a little bit more efficient, national media buys. Much easier, more effective way to reach a lot of communities that have never seen any of the Inspire messaging before. That's why we saw that immediate bolus of web activity, some 4.7 million people in the first quarter, all because they go into that national impact to buy. And we've refreshed the messaging, and we just have a new ad campaign just got refreshed in the last couple of weeks. We're changing the mix on who we're marketing to. We know the majority of the people that come to the website are from an influencer [indiscernible]. And so we're changing the channels for which we're doing our advertising, getting the message to the appropriate people to help continue to drive awareness of the therapy. So we're learning quite a bit in this journey as we're going through and creating a direct-to-consumer platform.

Okay. That lends itself nicely to kind of circle back to the sleep conference last week, maybe just an open-ended question to ask. Kind of the key highlights are the takeaways. I know the new Bluetooth patient remote was an important part of that. Just kind of talk to how the reception was and also to the importance of that new product.

SleepSync. That's the new buzzword, SleepSync, and that's what we branded it because now what we're doing is we're able to connect the patient with the health care provider via Inspire Cloud. And the new Bluetooth was rolled out last week and the SleepSync program to be able to get the information from the implanted product and the remote control through the patient's smartphone to Inspire Cloud. The physician can now log into their portal to be able to see how the patient is doing with therapy. We are partnered up, made a couple of minority investments last week that also went over quite well last week as people wanted to understand why did we invest in Ognomy? Why did we invest in EnsoData? And it's all about improving the patient experience to get to Inspire therapy. Ognomy is a tool that -- it's an app that patients use -- can use telemedicine with a sleep position to get an overnight sleep study, and we can get sleep studies updated in 3 to 5 days. Of the 24,000 patients that came to our Advisor Care Program to talk to get an appointment, 50% of them don't have an updated sleep study, meaning UnitedHealthcare, Medicare, the commercial payers require a sleep study within the last 2 years. If we let those patients go on their own to find a sleep physician and get a sleep study, we're going to lose a lot of those patients because it will take so long, a couple of months to get that study and then circle back into the system. But if we can find tools for them to get that study done, that's the purpose of Ognomy. EnsoData is a tool that is used to do automatic scoring, using machine learning and artificial intelligence to automatically score these sleep studies and the performance will be better than a human scoring studies and it frees up the sleep position to spend more time talking to patients and building their capacity. And that's what it's all about. So the focus was the maturity growth of Inspire, the SleepSync opening up our digital platform, our commitment to improving patient experience and patient flow with our minority investments really were the highlights. As usual, we always have many new data points come out and a lot of physicians doing their own research of Inspire.

Okay. That's great. I got in front of a couple more of my question as usual. I love it. A couple more on innovation, the next step in the Inspire Cloud integration, the physician program. Can you remind us the timing what that will enable for us on that front?

So today, what we do with the physician programmer is we actually sell a tablet and an antenna, and these tablets are crazy. I pull my hair out. Yes, as you can see, I don't have any left. Because we always have to buy these tablets and they go out of stock so fast because the technology evolves. And also we have to buy a whole new group of tablets. The next generation is actually going to be programming through the cloud, using any normal computer or surface that you have, and the physicians can just log in on their own surface to the cloud, and we'll use the antenna that communicates with the device. Now the physician program will interface and all the information that's available on the program will instantaneously be part of the cloud as well all the patient data because of SleepSync. And now the physician has access to all this information. That is in final testing right now. We'll be going to the FDA this year before the Inspire V neurostimulator. The next step after that is we're working already with the FDA, working through all of our safety parameters to protect the patient, but we're going to be going to remote patient programming. So now that we can do telemedicine, a physician will now be able to program a device from the physician's office to the patient's home through the SleepSync network. And that's going to really help out with patients. They don't have to drive in 2 hours to go up to see the doctor. They can have a programming adjustment right at home. They can do a sleep study that night just to see how did it work out and you can either make further changes or have it dialed in. So we're looking to start that process next year. And hopefully, we can have that later in the year.

Okay. One more on the innovation front, the full body MRI. The way that I sort of understood it, it sounds like there are some patients that might be sitting on the sideline waiting for that to be approved. So just first and foremost, remind us the time line, I think 40 submissions. It should be right around this time I was looking for a press release this morning, but then I get one. Remind us...

I did make a phonecall. No, we're working with the FDA. We've been working with them since the end of last year. We're coming up right at the 180-day market. When you do a PMA supplement, those are 180-day targets. We've been back and forth with the FDA, answered all their questions. We think they're in the final review, and so we do think full body MRI is imminent. It's coming pretty quickly. The good news for this is no hardware changes with the Inspire system. So anybody who's had an implant since 2018 is -- falls under the same approval for full-body MRI. We do believe there are some patients that feel like MRI is an important requirement for them. So they're holding out until they get that -- until we get the full body MRI approved and then they can move forward with their Inspire procedure. Not sure it's a significant number of people, but we know it does exist.

Okay. So maybe a driver to the upside within kind of your guidance ranges that you provided. Not a huge number, but...

I think so. Yes.

Okay. Fair enough. I think just before we leave it on Inspire V, can you remind the time lines before we move off of innovation.

Inspire V is really important because what we're doing is taking the sensing mechanism. Inspire is -- the premise of Inspire is close with stimulation, meaning we sense the respiration rates of patients, and we provide stimulation of the hypoglossal nerve synchronous with the inspiratory phase of respiration. Meaning when a patient inhales, that's when we provide stimulation to the hypoglossal nerve. That's when the airway collapses. Today, we use a sensor that's by itself on a lead that's part of the two-incision procedure. Inspire V takes that sensor and using technology of an accelerometer is now mounted on the circuit card inside the neurostimulator can. So we believe we're going to improve our performance because it's going to be a more stable environment for respiration detection. Cardiac pacemaker has been using the same technology for years on a very responsive patients. So when you go jogging, the pacemaker knows you're exercising so the pacing rate increases. Same technology, and we think we're going to improve the respiratory detection and therefore, improve outcomes. And now you don't have to implant the sensor and so it's going to reduce the operating room time by as much as 20 minutes to 30 minutes. Further, we don't have many revisions in our therapy because we're very strict about our safety, but the revisions that we have are predominantly driven by that sensor. And so now we're going to have an improvement in our own product reliability, not to mention COGS because we don't have to manufacture that sensor, it's just part of the circuit card. So there's so numerous advantages to that, and it's now a microprocessor-based neural stimulator. And so subsequent revisions are firmware changes only. Inspire V is going to be submitted to the FDA late this year. We're in test, final testing. We've already worked with the FDA. They know what the submission is. FDA -- we're budgeting 1 year to review that. So we're targeting approval at the end of '23. In the meantime, we're starting to work on Inspire VI. What we want within Inspire VI is sleep detection. We believe that with the same center, we can determine if a patient is sleeping or if they're awake. And when they fall asleep, we'll have the device automatically turn itself on. When they wake up, it will turn itself off. They got to get up here in the middle of the night. For some reason, it will pause itself in that period of time to get back in bed and fall asleep. And also now we have auto sleep detection. That removes the necessity for patients to use the remote to turn the device on at night. That's going to have a huge step in patient compliance to therapy because it's automatic. Inspire VII is going to take a next step further. And now we're talking about going to automaticity of the overall therapy, where we have a device that will act as a smart device and actually work to auto program itself by detecting if patients are having obstructive events. So we have a long way to go with this technology, but it all starts with getting Inspire V submitted at the end of this year.

Okay. Maybe we can bring Rick back in for the last few minutes here. A comment, just to clarify from the one you called about OpEx, just to make sure we understand what the intention behind that comment about, I think it was increasing dollars at the same rate each quarter sequentially. Do you -- can you clarify that?

Yes, that's correct. So last few quarters, we've increased our OpEx by about $8 million on a sequential quarterly basis. That was kind of the guidance we implied when we talked about that in the first quarter earnings call.

Okay. And so we should expect to see an incremental $8 million in OpEx basically -- roughly speaking.

In that range.

Yes. Okay. That's very clear. And you've also put out some broader comments about the relative size of the company and profitability metrics at those times. Can you remind us what those levels were and kind of the broader framework for profitability...

Yes. So we're really excited about the past 5 quarters. We've added about 300 centers over the last 5 quarters. And so we're at just over 700 centers. We've talked about how we've recently gone through some long-term strategic planning. And our -- in the first quarter, our 700 centers on a utilization perspective because we give those metrics, were about -- was about 1.3 procedures per month. In the fourth quarter, it was 1.5. And so what we did is kind of say, what do we look like when we have 1,600 centers doing 2 per month. So an increase in utilization as well as a continued number of new centers, and that gets us to about 40,000 procedures. That's $1 billion in revenue with our ASP of about $24,900 with the new price increase. And then when we get to that level, that's when we'll be in those around 30% or so operating margins.

Okay. That's really helpful. It's a relatively smaller part of the business, but you were impacted by FX, I think, from an ASP perspective outside of the U.S. Can you just remind us how much of an impact that was, how material it's going to end up for the year?

Yes. Our ASP, we have -- we'd like to have uniform pricing throughout the world, and we only go into new geographies once we have reimbursement in place. So that's why we're in Germany and the Netherlands. And recently, we announced we did our first implant in the U.K. We got approval in France as well. And so in the first quarter, I believe our ASP was right around $22,000, $23,900 in the U.S. And so there's some impact there. But on an overall basis, because we have such a -- the U.S. is growing so quickly. Outside the U.S. represents about 4% or 5% of our revenue.

Price increases outside the U.S. as well as the...

Just U.S.

Okay. Okay. That's very clear. I think maybe just one last one on the international front. You mentioned Germany a little bit slower in 1Q impact. And I know we touched on it just briefly, but, can you talk about the environment, any update in Germany?

Yes, I've got 9 seconds. So Germany is really strong. We're growing. The challenge we have in Germany is the 3-night stay. We've got to get that down to overnight. We did get awarded reimbursement in France. That's really big news. Now we're negotiating the final pricing. It's going to be consistent with what the EUR 22,000, like Rick mentioned, in the U.K. Done the first cases in the U.K., good reimbursement changes in Netherlands today. We expect Belgium to announce in the near future reimbursement there. So...

Australia.

Australia, the team is there working, resubmitting the reimbursement dossier today or on the 15th. What's the date today? 14th? Tomorrow. And so that will take a little bit more time. Done the first implants in Japan. Done the first implants in Singapore, and we are starting to work with South Korea as well, as well as Hong Kong. So we're being careful about our scaling, but international demand is growing as well.

That's good.

All right. We're basically out of time. Tim, Rick, thanks so much for being here. Phil, thanks for doing the Q&A. Everybody, have a great afternoon.

Very good. Thanks, Phil.

Thank you very much. We appreciate it.