MiMedx Group, Inc. (MDXG) Earnings Call Transcript & Summary

Good morning. I'm pleased to introduce Dr. Kathy Behrens. Kathy?

Good morning, and welcome to the 2020 Annual Shareholders Meeting of MiMedx Group. Thank you for joining us today. My name is Kathy Behrens, and I'm Chair of the Board. I want to express appreciation on behalf of the Board of Directors and management of the company for your attendance today. Pursuant to the bylaws of our company, I will act as chair of the meeting. William, or Butch, Hulse, Corporate Secretary of the company, will act as secretary of the meeting. In my capacity as chair of the meeting, I now call this annual meeting to order. In light of public health concerns regarding the COVID-19 pandemic and related travel restrictions, we are hosting our meeting virtually, which allows us to be more inclusive and reach a greater number of our shareholders while protecting the health and well-being of our shareholders, directors, and employees. As is our custom, we will conduct the business portion of the meeting first and answer questions at the end of the meeting. Though we may not be able to answer every question, we will do our best to provide a response to as many as possible. With us today are the 6 directors whose service will continue following this meeting. In addition to myself: Jim Bierman, Bill Hawkins, Todd Newton, Marty Sutter and Tim Wright. A number of our officers are also here with us today, including our Chief Executive Officer, Tim Wright; and Chief Financial Officer, Pete Carlson. Also with us are Rohit Kashyap, Executive Vice President and Chief Commercial Officer; and Dr. Bob Stein, Executive Vice President, Research and Development. Both of them will have some comments immediately following the business portion of the meeting. Before we begin, I would like to thank 3 directors whose terms will end at this meeting: Charlie Evans, Chuck Koob and Neil Yeston. On behalf of the company, I thank each of you for your service to the company these last several and, in some cases, many years. Today's meeting format will follow the agenda displayed on the virtual meeting website. During the meeting, shareholders who have logged in using their 16-digit control number will be given an opportunity to vote on the matters specified in the Notice of the Annual Meeting of Shareholders set out for this meeting, if they have not already done so or if they would like to change their vote. We will then open the polls to collect the votes on the proposals that are before the company's shareholders at this meeting. We will then adjourn the meeting. At that point, our Chief Executive Officer, Tim Wright; Rohit Kashyap, Executive Vice President and Chief Commercial Officer; and Dr. Bob Stein, Executive Vice President, Research and Development, will make some remarks. After that, we will have time for shareholders to ask questions regarding the company's business and operations. Please be aware that this meeting is being broadcast publicly, is being recorded and will be archived and publicly accessible for approximately 30 days. Also, note that the meeting rules of conduct and procedures are available on the meeting website for your further reference. Our General Counsel, Butch Hulse, and Secretary of this meeting will now present proof of the due calling of the meeting.

Thank you, Kathy. I present the following. First, a complete and certified list of the company's shareholders as of the close of business on October 7, 2020, the record date set for shareholders entitled to notice of and to vote at this annual meeting, and a certificate stating the number of shares as of the record date eligible to vote at this meeting. This list, which is presently being maintained by the inspector of elections, shows that at the close of business on the record date, there were 111,035,418 shares of common stock outstanding, each share having one vote, and 100,000 shares of Series B preferred stock were outstanding, each having approximately 194,800 votes. Second, a copy of the printed notice for this annual meeting required by the Florida Business Corporations Act. This notice was included in the proxy materials mailed to each shareholder of record as of the record date for the meeting to the address for such shareholder appearing on the company's records. Third, the affidavit of Broadridge Financial Services which shows that on or about October 15, 2020, a notice of this annual meeting along with copies of the company's proxy statement, annual report and proxy card for this meeting were mailed to each of the shareholders of record as of the record date. The Notice of Meeting, certified list of the company's shareholders as of the record date and the affidavit of mailing will be included in the minutes of this meeting.

Thank you, Butch. Finally, the company has appointed Ms. Claudia Bell to act as inspector of elections, who is with us today and has taken the oath of inspector of elections, which the secretary will incorporate as part of the minutes of the meeting. The inspector has certified -- has the certified list of shareholders of the company as of October 7, 2020, the record date. Based on the percentage of the total shares of the company held by holders of record now present at the meeting, either virtually or in-person or by proxy, a quorum is present for the purpose of proceeding with the business of the meeting, subject to final verification and certification by the inspector of elections in the inspector's final report. We are now ready to proceed with the proposals that you will vote on today. Again, we ask that all comments and questions be held until the comment-and-question period that will follow the formal voting. Let's proceed. Proposal #1 is to elect 2 Class I directors to serve on the Board of Directors. The Board of Directors of the company has nominated 2 director candidates: Michael J. Giuliani and Cato T. Laurencin. The nominees are duly nominated and present, and the company has not received valid notice of any other nominees. As such, I hereby declare the nominations closed. Is there a motion to vote on this proposal?

So moved.

Second.

Proposal #2 is the vote to approve an amendment to the company's Articles of Incorporation to increase the number of shares of authorized common stock from 150 million shares to 187,500 (sic) [ 187,500,000 ] shares. Is there a motion to vote on this proposal?

So moved.

Second.

Proposal #3 is the vote to approve amendments to the company's 2016 Equity and Cash Incentive Plan. On October 2, 2020, the Board of Directors approved, subject to shareholder approval, amendments to the plan, including an increase in the shares available to grant under the plan by 8,400,000 shares. Other amendments are described in the company's 2020 proxy statement. The company believes that stock-based incentives are a key component to our compensation for executive officers, nonemployee directors and other key employees. The Board of Directors recommends the approval to the amendments to the company's 2016 Equity and Cash Incentive Plan. Is there a motion to vote on this proposal?

So moved.

Second.

Because no further business is on the agenda to come before this meeting, we will move on to voting. It is now 10:08 a.m. Eastern Time on November 20, 2020, and I declare the polls now open for each matter to be voted on today. Shareholders attending this meeting can vote their shares online by clicking the Vote Here button on their screen. Shareholders who have already voted either via the Internet, telephone or mail and who do not want to change their vote do not need to take any further action. If you would like to submit your vote at this time, please ensure that you have logged into this meeting using your 16-digit control number and click the Vote Here button on your screen. I now ask that shareholders who have not yet voted or wish to change their vote do so now through the virtual meeting website. I'm going to pause for a short time to allow voting to continue. [Voting]

Now that everyone has had the opportunity to vote, I declare the polls for the 2020 MiMedx Group Annual Meeting -- Annual Shareholder Meeting closed at 10:10 a.m. Eastern Time on November 20, 2020. Will the inspector of elections please report on the vote?

Based on a preliminary review of the votes cast, Class I Director nominees Michael J. Giuliani and Cato T. Laurencin has been duly elected. The amendment to the company's Articles of Incorporation to increase the number of outstanding shares has been approved, and the amendment to the company's 2016 Equity and Cash Incentive Plan have been approved.

Thank you, Claudia. The company expects to report the final results of the voting on a Form 8-K to be filed with the SEC within 4 business days after receiving the final report of the inspector of elections, and we'll file such report with the records of this meeting. I now declare that this 2020 annual meeting of shareholders has been duly held and that the business before the meeting has been properly concluded. This brings us to the end of the formal part of the meeting. We thank you again for your attendance and your interest in MiMedx. The formal portion of our meeting is hereby adjourned, and we will now hear from our Chief Executive Officer and Chief Financial Officer, and then we will have an opportunity for questions. At this time, I'd like to introduce you to Hilary Dixon, our Vice President of Investor Relations and Corporate Communications.

Thank you, Dr. Behrens. Before we get started, I need to remind you that our comments today may contain forward-looking statements. The company's actual results may differ materially from those expectations discussed here. Additional information concerning factors that could cause such a difference can be found in our periodic filings with the SEC and in our important cautionary statements regarding forward-looking statements in our most recent earnings press release. In addition, today's discussion may contain certain non-GAAP financial measures. We believe that the presentation of these measures provides important supplemental information to management and investors regarding our performance. These measurements are not a substitute for GAAP measurements. You are encouraged to review the reconciliation of any such non-GAAP financial measures with our most direct comparable GAAP financial results, which can be found on the Investor Relations page of our website www.mimedx.com. Now I'd like to introduce Tim Wright, our Chief Executive Officer. Tim will make some remarks, followed by Dr. Rohit Kashyap, Executive Vice President, and Chief Commercial Officer; and Dr. Bob Stein, Executive Vice President of Research and Development. Tim?

Thank you, Hilary, and thanks, everyone, for joining our meeting today. I'd first like to start off and thank our employees for all their work throughout this year and wish everyone a fantastic Thanksgiving. Patients certainly are why we're here. Many of these patients have suffered 2 or 3 years with a chronic unhealed wound. Many of our shareholders know patients that are suffering in silence with these incredibly chronic wounds that just won't heal. This is the core part of our business in addition to our novel pipeline. As shareholders, you own 2 very special assets. One is the best wound care business in the business. We have the best brands, we have the best data package and we have the best commercial platform. I'm confident that our business is now positioned for sustainable growth and profitability. On the right-hand side of this slide is our late-stage pipeline. It is a novel approach to the treatment of plantar fasciitis and knee osteoarthritis. This has an incredibly large market opportunity if we're able to generate the clinical evidence and replicate that in our Phase III trial. As I move on to Slide 9, MiMedx is the pioneer in placental biologics. It's a complete platform that -- with applications in the wound care segment as well as applications in the musculoskeletal disease segment as we define it as plantar fasciitis, Achilles tendinitis and knee osteoarthritis. I wanted to drill down today on the aspects of this business and get to a point where we can fully appreciate the value of our pipeline and fully appreciate the value of our core business. Our core business has the opportunity for continued growth. Rohit will cover this in detail as we move through the presentation. The market opportunity in the knee OA space, I'd like to focus on today. Through our qualitative and quantitative work that we completed just about the time we completed the enrollment in our Phase IIb trial gave us a new appreciation for the market size, its growth rate and our potential penetration into this market. This market grows at about 2% a year. So by the time we launch this product, there'll be approximately 19 million patients that could be eligible for treatment. Obviously, we would not have access to every one of those patients. We generate this data based on IQVIA claims data that we've cited before. It is imperative for us to continue to drive our novel late-stage pipeline and generate the clinical evidence that we feel we can generate in our Phase III trial to complement our Phase IIb results. Dr. Stein will cover this in more detail. We have much, much more granularity around our -- what we would call internally as our micronized dHACM forecast. So whether it's in minor OA, mild OA, moderate OA or severe OA, we've now broken that down. We think we can capture an important amount of the patients in year 1 and throughout the launch years, culminating into a multibillion-dollar opportunity. As we move to Slide 10, our optimism for this late-stage pipeline, I think it's important to express it today. In our Phase IIb trial, what we recognized is we had a lower dropout rate than we anticipated. Also, we added an additional opportunity for patients to get their second dose, which I think will prove to be very beneficial for these patients from an efficacy standpoint and a safety standpoint. So we concluded our Phase IIb clinical trial a couple of months early, and I attribute that to the great work not only by our clinical ops team but our partners -- partner investigators. Also, the competitive landscape is changing. Many of the novel mechanisms that's out there are running into trouble in their Phase III programs. We've revised our forecast on the potential candidates for injectable amnion and chorion from 300,000 range to 800,000 range to 1 million to 1.5 million range. These patients would be eligible obviously for an injection, unilateral injection of their knee and potentially an opportunity for bilateral injection to the knee if indicated. This offers a novel treatment for the treatment of OA and provides an enormous opportunity for our shareholders. On Slide 11, we used our capital raise that we closed with Essex Woodlands. We sized that to invest in R&D, in operations and our commercial business. R&D has the strategic imperative to mature our pipeline, as we discussed, and to systematically innovate in support of our core business. A good example of the innovation was the launch of EpiCord Expandable in September. Our operations, including our donor network and our manufacturing organization, has the charge to continue to build the chemistry manufacturing and control package that will be part of our submission of all of our BLA submissions. In addition, they have the charge to validate our facility to a GMP standard no later than May 31, 2021. In addition to that, we continue to deploy process optimization efforts to generate high-quality products as well as improve our cost of goods. Third, our commercial business, led by Rohit Kashyap, has the charge for top-line growth. He'll go into that in detail in a few minutes. To support our business, we feel it's important to continue to conduct clinical trials which was the recommendation of the Agency of Healthcare Research and Quality, which noted back in February of 2020 the superior efficacy of our products. We also have an obligation to all of our stakeholders to generate health economic data to support the continued reimbursement of our products, thereby leveraging our relationships with our payers. Now I'd like to turn the presentation over to Rohit.

Thank you, Tim. In the short time that I've been here with the company with MiMedx, I've been truly amazed at the impact our therapies have on patients. I look forward to driving commercial strategies and tactics that make the therapies accessible to more patients and thereby also grow our business. If I can go to Slide 13, you will see that our focus to achieve the core growth, the left-hand circle that Tim had shown, focuses on 4 key drivers. First, as I move from the left-hand side of the page to the right, is to enhance our portfolio value. The best way to think about this is to say how do we penetrate deeper and how do we capture market share. So that's -- those are -- that's the focus of that driver of growth. As we move to the second vertical, which is expanding the market, it's how do we grow the market by making more and more patients aware about the therapeutic options available to them in order to treat the chronic wounds that they have probably suffered for many years. As we go further away from that, we have an opportunity both through organic and inorganic investments to bring new products to market and thereby expand our opportunity in the adjacent spaces that our current products don't serve. And last but not the least is the opportunity to access new markets in the international space. We are focused on a few target markets in order to achieve that growth and leverage the products that we have today, for example, Japan. What I will be doing today is mostly focusing on the first 2 pillars as I dive in deeper into our strategies and tactics to help achieve above-market growth. If I go to Slide 14, it talks about what does that above-market growth means. Our skin -- the market that we compete in is the skin substitutes market, which is about $1 billion market growing at about 6%. We are the leaders in the fastest-growing segment of the market, represented by the amniotic tissue allografts space. This part of the market is growing at about 8% to 10%, primarily driven by demographics, the disease -- the increasing disease conditions that lead to these wounds as well as by increasing awareness about the therapeutic options. Our goal is how do we expand that market opportunity so to make that pie bigger, but also make the slice of the pie that we have bigger in that space in order to achieve more than the 8% to 10% growth that defines the market growth. So our goal overall is to achieve more than 10% market growth. If I go to the next page, which is Page 15, I want to share with you what are the other priorities in order to maximize these opportunities for growth. We look at that in 3 distinct strategies. One is increasing the market opportunity. We know the market is grossly underserved, so we believe there's a huge potential for that. The second opportunity we see is to capture disproportionate share of that opportunity, and that is driven by our belief in our products but also in the belief within our clinical evidence and the feedback that we get from our customers about the efficacy of our products. And last but not the least is to build a commercial model that we can leverage to exploit the opportunities for growth, and I'll share what investments and what tactics we are implementing in order to achieve our goals in each of these 3 pillars. If I go to the next slide, which is Slide 16, and talk about the first pillar, it talks about increasing the market opportunity. Our goal, first and foremost, is to raise patient awareness. Patients live with chronic wounds for multiple years. We saw in the video leading up to this discussion today how our products can save limbs and provide a quality of life to these patients that they could not have imagined prior to that. It is our goal to use direct-to-patient initiatives in order to direct more patients towards these therapies and more patients towards physicians who can help them achieve those goals of saving lives and -- so saving limbs and returning their quality of life. The second priority within this for us is to enhance our provider engagement. Wound care is a disease state -- called by some as disease state, but it is not necessarily something that physicians regularly get trained on. So we believe that we can provide quality medical education, and our target is to educate more than 1,500 health care providers in the next year and annually going on with that in order to educate them about the products and also about the different options they have in treating the wounds and the patients that they see. Last but not the least, we can expand this opportunity by introducing new products. Wounds by themselves are not monolithic. We know that there are different types of wounds. They come in different shapes and sizes, but they're also stuck in different phases of healing. We believe we have an opportunity through innovation, organically and inorganically, to bring solutions and therapies to the market that can serve across that wound continuum. Just as an example, we recently launched EpiCord Expandable, which allows us to target larger, deeper wounds, which were otherwise not economically done with the existing portfolio that we had. We have had tremendous success and feedback on the applicability and the success with this product as people have gotten used to using it in the wounds that we targeted with it. I will now share our second priority, which is capturing disproportionate share, on Slide 17. The first element of that is just highlighting the unique product that we have. Our proprietary product, although it operates in a crowded space, is unique by its proprietary PURION process which preserves its effectiveness. We also note that based on the 2 million allografts that we have distributed and used in patients that there's a wide experience that makes the product even unique amongst its competitors with the wide usage of the product. We have also planned on building provider confidence. Tim already mentioned the AHRQ data, which is now available since February of 2020, which validates not only the volume of data that we have but also the quality of our data and also the quality of our data related to some competition. So making sure that we communicate that value is important as we try to capture disproportionate share. We also realized that what's important in today's health care environment is just not clinical data but how does the data save overall cost of care, and that we have an effort ongoing in order to generate robust health economic data to further support the clinical data that we have. This will also provide confidence not only to providers but also to payers. Just recently, we got coverage -- our coverage is expanded by the largest payer within the United States. And at this point, we have more than 300 million lives that are covered by our products. We look forward to expanding that coverage not just in the number of patients that we can add on or the number of patients that can -- lives that we can add on, but also the type of wound care that can be treated with our products. I'll now go to the next slide, which is -- which focuses on how do we enhance our commercial model. We have a vast ecosystem of customers. We call on about -- we derive our business from about 4,000 accounts and more than 2,500 prescribing physicians who use our products. These accounts and physicians operate around a vast and different care settings, including inpatient, outpatient, physician office and other sites of care, and that's what the pie below is showing. Given that we have such a vast customer base, in order to have a leverageable customer model, we have to be very smart in what we do in building our capabilities, but also where investments are necessary to scale up. Our first focus is to make sure within that vast customer base to identify, target and educate the high-value customers. We want -- we seek to understand which are the physicians who see a vast volume of these wounds and also through our direct-to-patient initiatives, direct more wounds to these physicians and make sure they truly appreciate and understand the value of our products and the health economics associated with that and hence can drive the utilization of those products. In order to generate demand, we know that we need to increase our scale, and our goal is in 2021 to expand our sales team by about 10%. Besides expanding our sales team, we also plan on improving our productivity by investing in training and the targeting that I just mentioned by directing the effort of our sales team and one of the best assets that we have in our commercial model towards those high-value customers. But it's not just the sales team that focuses and delivers value to our customers. We have an overall fulfillment model within our commercial team that delivers that value. This includes helping customers get more efficient in their operations and patients getting more access to therapies by making sure that they are covered with insurance. We have a robust team, including our reimbursement support team and our insurance verifications team, that is a true competitive advantage and provides this support which is truly acknowledged as one of the best in the industry. As a combination of all of these strategies, I would reemphasize that we believe that we can execute robustly to deliver sustainable profitable growth at above-market growth levels. I hope I've given you a picture of our commercial strategy going forward. I will now turn the call over to Dr. Bob Stein, who will share with you more details about our pipeline.

Thank you, Rohit, and hello, everybody. I'd like to tell you what we must accomplish in R&D in order to make MiMedx optimally successful. First, we must support our existing core businesses, which are related to advanced wound care, both in the outpatient and hospital setting. Second, we must advance our pipeline of innovative products in the musculoskeletal space and do what we can to protect our existing products in the face of enforcement discretion. In the case of our regulatory environment, there are basically 2 types of pathways that we have to follow for tissue products that are derived from human or other tissue sources. One pathway is called the 361 pathway, and that is what covers our sheet products and our new product like EpiCord Expandable. And this is for products which are viewed to be minimally manipulated and used for what's considered to be homologous use, something similar to what they do in the body from which they were originally harvested. These can be produced under what are called Current Good Tissue Practices, which is how MiMedx has operated in the past, and they require FDA review but not FDA formal approval. The other pathway is our 351 pathway, and this is a more rigorous pathway. It's for products like our micronized products which are milled to the size of about 10 red blood cells, or our products like AmnioFill, which are ground up to be about the size of a pencil lead. And these are considered to be more than minimally manipulated, and we use them for things other than what they're normally doing in the body like inject them under the surface to cause the remodeling of tissues and the healing of wounds. These must be produced under what are called Current Good Manufacturing Practices, and our colleagues in quality and manufacturing are working very hard to have that already for the launch of our products and to provide these 351 products at an appropriate level of manufacturing stringency. These products require much more from the FDA. They require a formal pre-marketing approval, which requires the conduct of 2 successful randomized, controlled clinical trials in which you have to show that the outcomes that you prespecify are achieved with a statistically significant outcome, which means the p-value has to be less than 0.05. I've been at the company officially since the beginning of August, but have been working closely with the team for about a year as an adviser. And I, too, like Rohit, have come to believe that our products are very powerful and really make a difference. On Slide 21, I'd like to tell you a little bit about what we've learned about the use of our micronized dHACM, which stands for micronized dehydrated human amnion/chorion membrane, in the setting of resistant plantar fasciitis. This is the type of pain that runners often get, but other people who have a lot of time spent on their feet also have this, can be a very serious problem. And we have conducted a very successful Phase IIb trial in 147 patients in which there was a remarkable reduction in 3 months in the level of pain measured by an index called visual analog scale and also a statistically significant improvement in what's called the Foot Function Index-Revised, which is a measure of how well the patients are actually able to walk and move. And the p-values in these 2 studies were remarkable. For the pain reduction, the p-value was 0.0001. And for the Foot Function Index, it was 0.0004, 3 0s and a 4. That's pretty remarkable. That means it's highly unlikely that these results were spurious. This was reviewed with the FDA in April of 2017, and we've been engaged in a Phase III study which we recently were able to complete enrollment in. 277 patients were entered into this study, and the enrollment was completed in September of this year. And we expect the last patient out in the second quarter of next year that will allow us to conduct the analysis of the data and to meet with the FDA for a pre-BLA filing. And we anticipate being able to file a BLA for this application, Biological License Application, in the first quarter of 2022. And the approval is expected, if the data are good, in 6 to 9 months from that. So this is an exciting opportunity for MiMedx and for patients, and it's causing us to get our good manufacturing practices into place and to be commercially ready. And it's important to note that this is the same material that's also being used in our knee OA study. So what we do on this project will markedly reduce the risks in our knee OA [ products ]. Another area where there's even perhaps more medical need is in the area of knee osteoarthritis, and maybe this is sort of close to home because I had both of my knees replaced a couple of years ago. This is a setting where we inject our products into the joint space of patients. This was stimulated by an observation by Dr. Kris Alden who studied 100 patients -- 83 patients retrospectively and had been injecting them in one or both knees with our micronized dHACM. On Slide 23, there's data presented which show the observation of pain and function in an index called the KOOS score, which is a well-accepted way to measure the function and the level of pain in osteoarthritis, where 0 is basically dysfunctional, 100% is essentially normal. And you can see that there's quite a number of improvements over the course of the 6-month observation. This is what stimulated MiMedx to launch a Phase IIb study. And on the next slide, what you'll see is we were able to successfully complete enrollment of 447 patients in our Phase II study in, again, in September of this year. And we were able to do that in the face of COVID, which made it somewhat more challenging, and we actually were able to do it a couple of months earlier than anticipated. This was in part because of a lot of hard work by our clinical operations teams and by the investigators, but it's also because we had way fewer patients drop out of this trial than we had anticipated. We thought we're going to have about a 10% dropout rate, and the actual dropout rate has only been 3%. So that's allowed us to quickly get this study fully enrolled. We will be expecting the blinded period of this trial to be completed in April of this coming year. And there's another 6 months of open-label extension that the FDA has required, so that the last patient will be observed at the end of 2021. We're quite enthusiastic about the potential outcomes here. The low dropout rate is an indirect indicator of potentially good pain relief, and we've also redesigned the study so that we can give all patients an injection of active materials. So some patients may get 2 injections. Some patients may get placebo followed by active. So that will give us a lot more opportunity to observe the impact of the treatment. We will be meeting with the FDA in the middle of next year under the what's called an RMAT designation, which means that this program is one of the few that the FDA has given a designation of a regenerative medicine advanced therapy. And that gives us an opportunity to have a more close and interactive discussions with the FDA at a higher level, which can also help us in our probabilities of being successful. We will be launching a Phase III assuming that the data from the Phase II are favorable, and that will be in the beginning of 2022. And we anticipate potentially filing a BLA in the second half of 2024 or first half of 2025. And just to repeat, the work we're doing to get plantar fasciitis ready for launch is going to markedly improve the pathway for the knee OA use of micronized dHACM. This is a very interesting and, I think, highly likely to be a very good treatment for people with moderate to severe osteoarthritis. As Tim said, as we think about the potential use of this product, we think it's going to really have a big impact on a lot of patients. With that, I'd like to turn the program back over to Tim Wright, our CEO.

Thank you, Dr. Stein. And just in closing, I want to thank our employees again as well as our shareholders for their confidence in us and their patience as we have navigated over the -- since I've been here the last 18 months, that the company has been navigating a lot of choppy waters over the last 2.5 years. Just to restate, our 2 special assets here are advanced wound care business, and we're now positioned to grow in a sustainable fashion as well as in a profitable way; and our novel late-stage pipeline, which provides a significant opportunity to capture value and support patients who are suffering from plantar fasciitis or knee osteoarthritis. With that, thank you again. I'd like to turn the meeting back over to Dr. Behrens.

Thank you, Tim. We are now going to open up this proceeding for general questions. We will take shareholders' questions that are being entered today on the web portal. Please note that we'll attempt to answer as many questions as possible in a little less than the 20 minutes that we've got set aside for our Q&A session. But we'll only take appropriate questions that are germane to the meeting and to the company's business. Pursuant to the rules of procedure posted on the meeting website, each shareholder will be limited to 2 questions. The floor is now open for any comments and questions you may have on matters related to our business.

Tim and Bob, I think the first question that we'd like to talk about from the shareholders is given the RMAT designation for the application, does this talk about the opportunity for acceleration of the time line we just mentioned? And what does the fluidity of communication between the company and the FDA mean for these clinical trials?

Bob?

So the RMAT designation is a very good thing to have. There are certain things that we'll have to discuss with the FDA. We want to be able to discuss the end points that are most relevant out of our Phase II trial. We want to be able to discuss our CGMP readiness in manufacturing, and we would like eventually to be able to discuss the idea of pooling more than one central source in the production of our product. These are very important topics. The FDA is struggling to figure out how to address some of them, and we can become collaborators and colleagues in having those discussions. And I think this gives us a really unique opportunity to be at the table and have a favorable opportunity to interact.

Bob, I would just add to that. The more dialogue we have with the agency in this somewhat uncharted water, this will advantage us in the final BLA submission process as well as the time line for approval.

I think that's very true. It'll help us socialize what we're trying to do and help them understand and see that we're working hard to be as rigorous as they would like [ the entry ] to be.

Yes.

A shareholder has asked if this product can potentially be used on other joints.