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

Hello, everyone, good afternoon. My name is Raphael Taubenfeld. I'm a member of the JPMorgan Health Care Investment Banking team. Welcome to the JPMorgan Healthcare Conference. [Operator Instructions] With that, it's my pleasure to introduce Tim Wright, Chief Executive Officer; Pete Carlson, Chief Financial Officer; and Dr. Bob Stein, Head of R&D, to give today's presentation on MiMedx.

Before we get started, I need to remind you that our comments today may include forward-looking statements. These statements are subject to risks and uncertainties, and actual results could differ materially. We list the factors that might cause actual results to differ materially in our SEC filings, which are available on our website. During today's presentation, we'll discuss non-GAAP financial metrics when talking about the company's performance. You can find the reconciliation of these measures to GAAP financial measures and our presentation, which is also listed on our website. I'd now like to turn the call over to Tim Wright, our Chief Financial Officer.

Thank you, Jack. And Raphael, thank you for the invitation from JPMorgan to attend the 39th conference here. My name is Tim Wright. I'm the CEO. I arrived here in May of 2019 and began the work to restore the financial integrity of the company and to build out our advanced wound care business, along with a very promising pipeline. I'm going to start on Slide 4. The title of that slide is leading product portfolio positioned for growth. This composite just gives you some of the characteristics of the business. Probably the most important thing here that we've been working on for the past year and '21 was really to restore the integrity of the company, and that was exemplified by the uplisting on NASDAQ on November 4. The middle band here in the light blue, it just gives you a sense of our advanced wound care, some of the dynamics around the Wound Care business. Today, there are over 30 million diabetics in the United States who -- about 10% of those suffer from chronic open wounds. This is the target market for our flagship product, EpiFix. The one thing about EPIFIX is derived from our proprietary process called PURION, which yields a 5-year shelf life product as a skin graph. And it also could be stored at ambient room temperature. The other characteristic about our product portfolio is the over 300 regulatory proteins that remain intact, which provide the efficacy of the product. These products are terminally sterilized for safety reasons. Another really exciting area about this company is our pipeline. Knee OA is an important indication for us that we have completed Phase IIb, and we'll talk about that a little bit later on. But when you start to think about the size of this market. Today, there are 17.5 million patients who suffer from knee osteoarthritis. Plantar fasciitis is characterized by a relatively large market here, 2 million patients that are treated annually. We'll dive into this a little bit more as I proceed to Slide 5. There are 3 really important things about the rebirth of MiMedx that I want you to take away today. Number one, with our capital raise that was sized for us to be able to invest in the business. We're certainly focused on our core advanced Wound Care business. This is a business that we feel we can grow in excess of the market double digit, at least over 10%. The second really important aspect this is our very attractive promising pipeline. That's accentuated by our knee OA work, where we're in Phase IIb, completed the enrollment there and for plantar fasciitis, where we have completed enrollment in Phase III. We'll get more details on that in a few minutes. We're also able to focus on other strategic areas that we have. We'll get into that later in the presentation. Let's move to Slide 6. MiMedx was a pioneer in placental biologics. The company did an outstanding job of creating a process here called PURION. PURION is a proprietary manufacturing process. Think about it as a tissue engineering process with its associated trade secrets and patents. On the left-hand side, you'll have our core business, which is our advanced Wound Care business and on the right is our promising pipeline. These are 2 distinctly different assets we have, both have the ability to create extraordinary value for our shareholders. So these are very distinct drivers that are connected by this manufacturing platform. Slide 7, please. When we start to think about amniotic tissue and you think about the PURION process that is exclusive to MiMedx. We've come to the conclusion that all amniotic tissue is not created the same. Our products have a 5-year shelf life. They are immune privileged as well as have the largest fully integrated -- vertically integrated and scalable donation network in the United States. Our donor recovery specialists, our employees that we have that are specialists in donor recovery, and that actually initiates our quality control in our process. Backed up by strong randomized-controlled trials that was recognized by the Agency for Healthcare Research and Quality. It allowed us to actually to get broad reimbursement coverage. Tackling the strong intellectual property, we got a very, very attractive business in the advanced wound care space. Slide 8, please. We've made significant investments in GMP for a number of reasons. One, it's the highest quality standard. It's a drug-like standard. Let me just walk you through, quickly, the process for our donor recovery and the vertical integration of our network. We start with our hospitals. We have over 40 hospitals that we recover placentas from. These are delivery of a healthy baby. The placentas are then put into our system and tested serologically and otherwise. This starts really our GMP process here. PURION is a proprietary process as we discussed earlier, and it also allows us to generate 2 different formulations. The first formulation is our EpiFix skin substitutes, which is down on the lower right-hand side of this slide. These are our skin allografts. And on the top of this slide will be our micronized or injectable products. They have released profiles that are slightly different. The final release testing profile is consistent with regulatory -- 361 regulatory standards and the final release testing product for our EpiFix injectable products and are micronized is based more on the drug standard. Next, our commercial infrastructure spans 3 primary care settings. The inpatient setting in a hospital environment, the outpatient setting or the advanced -- or the Wound Care centers around the United States and then in the private office setting. The other column actually covers the VA system and some other accounts. Today, we're 265 field sales personnel strong with supporting medical science liaison. The unique characteristic about our commercial platform that I think you'll find very interesting is, one, we have a large market access group, which really manages our GPO contracts and our payer relationships and IDNs. We have a large field-based reimbursement and national accounts teams, which drive and support our sales force with reimbursement issues that come up at the physician's office or with the patient. Next, our near-term investments are focused in our commercial area on really 3 important objectives: number one is to expand the market; number two is to capture a disproportionate share of that market using our clinical evidence; number three, we are investing in our commercial organization, not only in the people through training, but also in supporting them with outstanding support from our medical education team in the form of medical science liaisons, and a robust key opinion leader network. Next. We also -- when you think about the growth of that business, we're layering on a geographic expansion to execute on top line sales as well. Our number one target here is in Japan. We have submitted our registration there. We anticipate approval from the PDMA in mid-2021. We'll have to go through a post-approval process for reimbursement, we think that's going to take anywhere from 3 to 6 months. So materially speaking, our sales in '22 will be impacted by this initiative. We also have approval in other countries in the U.K. and Germany as well as many, many countries in the Middle East, which we primarily conduct business through tenured relationships. In the U.K. and Germany, we're still in the process of seeking reimbursement status there. But currently, our focus is on Japan in a direct way. Our investments represent, not only significant investments in our core business, but also in our pipeline. We plan to spend approximately $30 million, $35 million in our pipeline driving our BLAs, our biologic license applications. This represents huge opportunity to -- for shareholder value creation with knee osteoarthritis as well as plantar fasciitis. We also have programs. We are initiating pre-INDs and INDs to support and protect our existing business in the advanced Wound Care space. Product innovation is exceptionally important for our core business today. We plan to drive product innovation there similar to what we did in 2020 with the introduction of a new EpiCord product called EpiCord Expandable. This product once high-graded expands to 2x its normal size, which provides economic benefit since you're able to cover the same surface area with the same cost product or a larger surface area. So we continue to focus on our core business that generates cash to support our pipeline. Next. This is an exciting time for us from a R&D standpoint. We have 3 programs primarily. I'm going to focus on 2 today. Plantar fasciitis, as I mentioned, we concluded our patient enrollment of our Phase III trial in September. We have an obligation to do a readout, a 6-month readout. We'll do that in the April time frame. And we anticipate meeting with the FDA for that closeout and then shortly after filing our BLA. So we're well on our way there for BLA. And I think from a value creation standpoint, this is a pretty important activity for us initially as we move through the BLA process. Number one, this is the same process that we -- same manufacturing process that where we will use to support our application or BLA application in knee osteoarthritis. So this gives us an opportunity to synergize from -- in a manufacturing setting to get our CGMP and our chemistry-manufacturing control set up properly to submit our BLA. So as you know, there are 2 big sections of your BLA submission, your CMC section as well as your clinical data. The knee osteoarthritis program -- in the back of our deck, you'll see in the appendix, you'll see how we've begun to quantify this market. We're in the preliminary stages of really getting our arms around or dimensionalizing the size of this market. But it's a large market, 17.5 million patients. By the time we launch this product in the 2025 time frame, there'd probably be 20 million patients who suffer from knee osteoarthritis. We anticipate the market size here -- conservatively anticipate, we would be injecting 1 million to 1.5 million patients with our proposed amniotic solution, AmnioFix. So when you start to dimensionalize the value of that, it's a very large market. It could stretch from $1 billion to over $4 billion to up to $6 billion in market size. So it's a very attractive market for us, where we are with that, and which we'll talk about a little bit later in the Q&A if we want to drill down on there. We completed our Phase IIb work in September as well. We finished that trial about 2 months earlier, one, because we had a lower-than-anticipated dropout rate. Instead of 10%, we only had a dropout rate of 3%. I think that bodes well for the product there. Number two, we added another arm in the trial to allow patients to be dosed and the patients that were on active to be dosed at 6 months. So we wanted to test the durability of the product and see if we can extend the duration around -- to lower pain and also improve function. So this gives a snapshot of our 2 very critical BLA programs that we have. We're exceptionally excited about this. When you really look at this business, you've got 2 pieces from a valuation standpoint. Number one is the advanced Wound Care business. It's more of a medtech-like business. And then you have our pipeline, which is more biotech like. When you think about it from a sum of the parts, you have to really put those 2 pieces together. Next. We're optimistic about this pipeline for a number of reasons, which I've already stated. But if you think about knee osteoarthritis, if we could just focus on that, if we're successful in executing the Phase III clinical trial. It will offer, for the first time, a real nonsurgical treatment option to reduce pain and function and potentially delay the time frame for a total knee replacement. We think that's real value to the health care system. The other aspect about this platform technology, amniotic tissue platform technology, is it allows us -- once we demonstrate proof of clinical concept in plantar fasciitis as well as knee osteoarthritis, it allows us to move into other joints. Up in the upper left-hand shoulder and the right-hand -- problem of this is you'll see the patient there. We think there's probably potential application in rotator cuff tears, potentially tennis elbow and other applications there. So from a pipeline, it gives us, if you will, a life cycle management play in adding new indications under a BLA process. Next. Pete, I'd -- maybe you'll touch on the finance.

Thanks, Tim. I will. Here on Slide 15 is a historical perspective, most of these numbers are trailing 12 months for the third quarter of 2020. And the appendix includes detailed summary schedules of our historical financial information for your reference. What I'd like to highlight here are 2 aspects of our cash flows as we sit here and we look at the business. In the bottom center of the slide, you see reference to an adjusted free cash flow metric in that the trailing 12-month number was $31 million of positive cash flow. This represents what our business is doing. And adjusted free cash flow is adjusted EBITDA less capital expenditures and patent acquisition costs. So that's about 13% of adjusted net sales. And again, this is where the business itself, that advanced Wound Care business, is generating positive cash flows. On the left bottom, you see reference to our GAAP net loss of $40 million. The key difference between these 2 are what we -- what you can see there, reference to a $59.2 million, again, trailing 12-month number, of costs associated with the audit committee investigation, the financial statement restatement and related matters. And I will talk about that a little bit here in a minute. But that is what is -- has used cash historically for us outside of the business. And I think of the adjusted free cash flow is really what the business itself is doing. As we go to Slide 16, this is some financial outlook information. And I do need to give you a couple of caveats here as we look at the information. First, in the top bar, you see 2 ranges of -- for revenue outlook for 2021. The difference between these 2 ranges is the impact of -- if any, of the expiration of enforcement discretion at the end of May of this year, and this relates to the products the FDA views for us and others as biologics that we are currently selling in the market. And we estimate that the impact of -- full impact, meaning that we had to stop all sales of those products once enforcement discretion ends at May 31, the remaining 7-month impact would be between $20 million to $25 million for net sales. If there's no impact, which is a possibility, then you -- it would be the second set of numbers here. It may not be that binary in outcome. And so there are outcomes related to enforcement discretion that could fall somewhere within that range. The other footnote I would highlight here is footnote 2. We are presenting these numbers assuming a sort of full access across the year. And I'd say that a different way as it's hard to quantify any potential impact from COVID. So that would be just the one caveat on this. When you look at those numbers, while we don't have a full year 2020 top line for you at this point, I can tell you that those ranges, absent the impact of enforcement discretion, represent more than 10% growth. And that's consistent with what we've said about being able to grow in excess of the market. One of the drivers of that will be having boots on the ground, the right people in the right places, and that's the reference to the 290-plus sales professionals that we look -- we expect to have at the end of 2021. Again, that's over a 10% growth in that metric from where we were at the end of 2019. We expect gross margins to be consistent. You see there in the bottom left. And that leads me to talk about the investments we're looking to make in our business. And Tim talked about this a little bit. Specifically, we're going to invest some of the proceeds that we raised and the capital raise last summer, and July 2020 is when we closed that capital raise, and we purposely raised funds that were going to be sufficient to allow us to invest in our strategic initiatives while working to resolve our legal contingencies. Some of that investment is what you see here in the $35 million to $40 million of expected total R&D spend in 2021. That's a threefold increase over what we've been spending over these last couple of years. And it is in the pipeline and clinical trials that Tim described. You also see some impact in the selling, general and administrative expenses as we invest in some of the tools that Tim talked about for the commercial side. All of that leads to our profitability spectrum will be a little different in 2021 because of these investments, although I will say we are investing cash that is on our balance sheet as we sit here today. Finally, on the bottom right, you see that we tell you we expect to see a decline in those investigation, restatement and related expenses. And there are several reasons for that. The audit committee investigation was completed in the middle of 2019. The financial statement restatement was completed in the middle of 2020, and by the -- as we sit here today, we have resolved or reached resolution on 12 of the 15 legal matters that we disclosed in our financial statements. Two of the remaining items are small defamation cases and the one remaining item is the securities class action, but where we are not the only defendant, and frankly, where we also still have some capacity available from our D&O or directors and officers insurance policies applicable to those years, even though we have been able to utilize some of that capacity so far. The other spend that's going on here is under indemnification agreements for prior officers and directors, including and -- primarily related to a criminal trial of our former CEO and COO that completed in November of 2020. As we sit here today, we have filed for declaration to confirm our belief that we are required to stop providing those funds, advancing those funds and providing those indemnifications no later than the sentencing hearing of the -- or the sentencing of those 2 individuals, which is scheduled for February of this year. All of those factors lead us to believe there will be a decline in that nonbusiness expense. I'll mention one other item here, and that is that the government, through the Southern District of New York, which is the party that prosecuted the 2 former executives, has indicated to the company that based on the facts they know of today, they have no further matters to investigate with us. What that means is, as we sit here today, we are not a party to any government investigations relating to matters identified in the audit committee investigation. Tim, let me turn it back to you.

Thank you, Pete. Let's move to Slide 18. Some of the catalysts here and some of the things that we're -- we feel we're accountable to as a management team, hold myself to and I hold the team to, on the commercial side, as we've mentioned, we plan to grow that top line growth in excess of 10%. The reason to believe that is several things. One, our clinical data, superior. Our new listing -- or put on formulary, the largest private payer in the United States, that will be helpful, and we're going to expand our sales force as well by over 10%. In addition to that, probably an impact in 2022 from the revenue from our Japan business will be material to our business. In addition, from a BD standpoint, we're going to continue to pursue inorganic growth opportunities. I think that's important in light of the -- somewhat of the uncertainty in the enforcement discretion side of this. And also, Dr. Stein will lead an effort for product development -- for rapid cycle development of 350 -- or 361 types of products as well as 510(k)s. Now our pipeline, which is -- as I mentioned, is exceptionally attractive, particularly around the knee OA space, for us, we must be GMP compliant to file our BLAs. So by midyear, we plan to be certainly up to that standard to be CGMP compliant. Lastly, let me just touch on the -- we will be looking at our data and our internal -- interim readouts on all 3 of our pipeline products. We plan to publish health economic data in 2021. The big task for us, and what I've asked my management team to do is let's find a way to accelerate our late-stage pipeline. Let's find a way to file our BLA on PF sooner. Let's make sure that we get into Phase III on our knee OA as soon as possible. Next, let me just leave you with this. This has been an outstanding effort by the management team in 2020. We've got a lot done. We've got more to do here. We've got great products, great pipeline, great people. We also have huge markets with unmet needs, and we've got a great story. Investing in our core business to drive that will help us provide the cash to fuel our pipeline. Our job is to accelerate that as much as we can and invest in the other strategic assets that we have and the initiatives. Can we move on now to the Q&A? Thanks, Raphael.

Great. Thanks so much, Tim and Pete and Dr. Bob. Maybe if we can move to the Q&A here.

So the first question, I mean, it's certainly evident that the company has been through quite the transformation over the last few years. Just curious how are your flagship products regarded by physicians? And what helped them sustain their position in the market during that time period?

Yes. As you know, it was a pretty rocky period for 2.5 years for this company. The beauty of these products -- we have a loyal customer base, a large population of customers who basically didn't veer away from the utilization of our products given some of the turmoil. So -- and I really attribute that to all the randomized control trial work, clinical trial work that was done by this -- by the company historically. Also, just the product itself, a very advantageous 5-year shelf life, and they're easy to use. On the injectable side of our business, which really is the basis for our BLA pipeline, we -- under enforcement discretion, and these products are being used today with a very, very low incidence of any kind of adverse events, and this is captured in our adverse event reporting database. So large population of customers who stuck with us. I also want to reiterate the relationships that our sales force and our sales management team have with our key customers, whether it's in the hospital setting, whether it's in the Restorix or Healogics wound care center or in private practice.

I think one other aspect of that has maintained the interest in the product and the use of it is that they really work and they really help people. We have a lot of evidence to support that, but I think the clinical experience with them is what has kept many physicians and patients interested in having access to the product and using it.

Yes.

Maybe moving on to the operational side and the supply chain, what advantages do you owning and controlling the amniotic tissue supply chain afford MiMedx? And how do you sort of think about that when you kind of manage distribution internationally?

Yes. Well, clearly, having a vertically integrated supply chain with the largest donor recovery network, it's a quality story, and it's a control. We have control over every facet of our supply chain. And I think that's going to be exceptionally important as we move from GTP to GMP -- CGMP. We'll have control over our process, whether that's the actual process itself, and the final release specification. It all starts with the donor recovery process and with our donor recovery specialists there. So our GMP really starts in the upfront of this process and rolls through to our finished product. From a standpoint of Japan, we ship our products overnight. In the United States, we have well-mapped out supply chain for Japan and any other markets. Obviously, we've been selling products into the Middle East for quite some time, and we've got that supply chain pretty well wired there as well.

And so where are you in the CGMP process across your portfolio? You don't mind giving us an update here.

We've been working on translating our GTP to GMP since I arrived in May of 2019. There were efforts before that for sure. We've spent the right capital and time and effort. And frankly, having third-party expert reviewers examine what we're doing there. And we've had considerable dialogue with the FDA in this process as well. I think we're well positioned to complete the validation of our GMP process mid-2021.

And then moving on to -- on the regulatory side. So how do you think the regulatory framework will change for tissue-based products in the advance Wound Care market over the next several years?

Yes. Bob, you want to...

Yes. I think that's a good question. It's something we're spending a lot of time trying to think through and gather information about and be prepared to adjust. I think that there will be increased FDA scrutiny on tissue-derived products that are considered to be drug products. I think that there are a lot of uses that are somewhat marginal. And I think the FDA has noticed that and wants to curb that use. We've been part of supporting that and have been working very hard to make sure that our products conform to 351 regulations. Tim just mentioned all the effort that's gone into converting to current good manufacturing processes from good tissue processes in our manufacturing. The company was very far cited in filing INDs and getting actual randomized controlled trials up and rolling on the way to filing biological licensing applications for eventual approval. And I think that the agency is going to require 2 randomized controlled trials with appropriate design and appropriate way to manufacture a consistent, safe and more characterized product. I think that we're particularly supportive of that. And in some ways, we'll be advantaged. I think a lot of people in this space will have a hard time coming up to that standard. I think it's a -- maybe an overdue consideration by the FDA. We're highly supportive of it. We're trying to manage the impact it will have on the products we're already selling. But the good news is that they do work. They are safe, and we have a growing body of evidence to support that. As Tim mentioned, we have 3 late Phase studies that will have readouts in the middle part of this year. One in plantar fasciitis, where we'll complete our Phase III study; one in Achilles tendinitis where we're all set for the completion of a Phase III; and then we'll have the completion of the blinded card of our ongoing Phase II study in knee osteoarthritis. We'll have a lot of new information on both potential efficacy and safety of our products that we'll be able to have discussions with the FDA during the course of the transition to the end of enforcement discretion. As Pete mentioned, it's currently scheduled for the end of May of this year. It may end up being pushed back out, but we aren't counting on that.

Great. And I think that's a good segue to the pipeline. Can you tell us more about the planar fasciitis opportunity in the market ahead for MiMedx? And where do you see placental-based approaches in the treatment paradigm?

It's a very good question. There's a lot of people with plantar fasciitis and probably 2 million cases a year. And some of those people who are treated with more conservative measures, orthotics or icing or stretching or steroid injections. But a fairly substantial proportion don't get relief from that. And we have very good Phase II data with our micronized human amnion chorion membrane injected into the feet that they produce very good improvements in both the level of pain and the function of the feet and that was the basis for moving forward into Phase III. I think that the patients that went into the study were already difficult patients who hadn't had good responses to standard therapy, and we had remarkably positive Phase II results. If our Phase III results are in line with that, I think we have a very good opportunity to help people with a pretty debilitating condition.

Definitely, more broadly -- I mean your pipeline programs definitely seem compelling. Just curious what drives your optimism there? Potential -- more broadly across each of the programs.

It's interesting because this is sort of an unusual circumstance because the products have been out there and on the market and gotten used for a very long time, and the FDA decided to notify us and the rest of the industry that they consider these products to be 351 products. That means that they're either more than minimally manipulated or they're being used for something other than what the tissue source does in the body normally, and that they will require a standard FDA approval process. But we have a large amount of data from many physicians and patients who've experienced the benefit of these products. So that was one part of it. The original interest in knee OA came from -- in part, study by Dr. Alden, who studied 82 patients with advanced knee osteoarthritis, injected 100 knees. It was an open-label study, but he did a very careful job of quantitating the benefit using an index called the KOOS index, which is a KOOS score, which is a good way to assess both pain and function and quality of life. There was a remarkable improvement in this patient. And that was -- if you talk to Dr. Alden, he pointed out that these were people all scheduled to have knee replacement. And some people stopped coming back for the knee replacement, people came back and asked for shots and other painful joints, and he really became convinced that it was doing something. And that was part of what triggered MiMedx to put in place a formal Phase II trial. And we've had a very good ability to enroll that trial fully even in the presence of the COVID pandemic. We finished the enrollment a couple of months early because the dropout rate in the trial was only 3%. We had anticipated it might be as high as 10%. And we -- as I mentioned, expect to have the 6-month blinded observation period completed before midyear. And there's a follow-on open-label 6-month extension during which, as Tim mentioned, patients either in the placebo or in active arm can receive an injection of the active material. So we'll have, I think, a very good set of data characterizing the effects of our product and the safety. And it's in conjunction with lots of reports from the field, people using it that it really helps and lots of patients who've used it to also feel that way, part of what makes me optimistic about it.

And then in terms of...

I also think there's still potential unmet medical need. Because you end up -- if you're going to have your knees replaced, most knee replacements last maybe 15 years or a little bit more. And since people are getting osteoarthritis often before they're 60 and living till after they're 90, you don't want to end up having to have a second knee replacement. So a lot of the times when you have pretty osteoarthritis, but you're not ready to have your knees replaced and the current things that are available for those patients aren't really that efficacious in the case of things like hydronic acid or aren't necessarily that safe in the case of things like steroid injections. There's a real need for a helpful, safe and highly effective treatment. And we think we may have that in our micronized DHEA and [indiscernible].

Great. And maybe switching gears a bit to the financial position of the business. Can you remind us where the current cash position is today? And as you look to 2021, where are you going to focus on spending that cash?

On that Slide 15, where we have the historic information in the upper right, referenced a net cash number at September 30 of $62 million. That's $109 million of cash a little bit over that, and a little less -- a little bit more than $47 million of debt. And we will be spending some of that. As I said, the focus of that will be investing in our value drivers, both the research and development as well as our commercial area. And we do think there'll be much less or less spending on the nonbusiness expenses. The caveat with that, I'd just say is we have this one litigation matter that may or may not get resolved this year, may or may not have some resolution costs. But our primary focus with that $62 million of net cash and really the $109 million overall is investing in our Wound Care business and in our pipeline, and you'll see that going through the income statement, but going through focused in the R&D and SG&A areas.

Great. And maybe as we wrap up here with the final one, along the same lines, when you think about tuck-in M&A, can you give us a sense for what opportunities or what areas are you looking at currently, if any? Are you focused on biologics? What are some of the criteria you might be thinking about as you evaluate these opportunities?

Yes. We have a very active business development effort here. We want to look at ways to support our sales force, but they put something -- put a meaningful product technologically as well as something that fits in that may help us shape the process of care in the advanced Wound Care space. So it could be a product that moves further up in the cycle of -- or the process of care. It could be something that's very complementary to our EpiFix product there. So the advanced Wound Care space, we're very open to products that meet our scientific criteria as far as being durable, as data that backs that up. We just don't want to throw a product in someone's bag that we can't support scientifically. On the technological side, I think there's a lot of room for us to take a look at opportunities to support what we are -- what our ultimate goal here is to elevate the standard of care and also authenticate placental science. So we've looked at a lot of different technologies from looking at exosomes to other technologies, which we think can be very supportive of Dr. Stein's R&D effort to really authenticate the science.

I think also, we're moving into the musculoskeletal space with our plantar fasciitis, [indiscernible] arthritis indications. We believe that this is an exemplification of the ways in which some of the placental products could drive tissue regeneration, and there's an opening there for broadening and deepening of the portfolio of our efforts.

Great. Thank you so much. That was very insightful.

Thanks, Raphael. And again, we appreciate the invitation, and have a good day.

Thanks, everyone.

Thank you.

Bye now.

Bye.