Vericel Corporation (VCEL) Earnings Call Transcript & Summary

Good morning, and thank you for joining us today for the JPMorgan Healthcare Conference. My name is James Austin, and I'm an associate in JPMorgan's Healthcare Investment Banking team. Before I introduce you to our presenter today, I want to call your attention to the blue button on your screen. This is where you'll submit questions to be addressed after the presentation. With that covered, I'm excited to introduce you to Nick Colangelo, CEO of Vericel. Nick, I'll go ahead and hand it over to you.

All right, James. Well, thank you very much. We really appreciate the opportunity to be presenting and kicking off bright and early on day 3 of the JPMorgan Conference. So before I begin, I'd like to remind listeners that this presentation contains forward-looking statements and you should refer to documents on file with the SEC for further information. So for those of you who are not as familiar with Vericel, we are a leader in advanced therapies for the sports medicine and the severe burn care market. We have a portfolio of highly innovative, advanced cell therapies and specialty biologics with significant barriers to entry that are really focused on changing the standard of care for patients with cartilage damage and burn injuries. We currently market 2 products in the U.S., MACI and Epicel, which are regulated by the FDA as combination biologic device products with the biologic component being the use of the patient's own cells to repair tissue and restore function. Our lead product is MACI, which we launched in 2017 for the treatment of cartilage defects in the knee. It's the leading restorative cartilage repair product in the market and the only FDA-approved product in its class. Our second product is Epicel, which is the only FDA-approved product for the treatment -- or permanent skin replacement for adult and pediatric patients with large total body surface area burns. And in line with our business development strategy to build around our existing commercial franchises, we added an exciting new synergistic and complementary product called NexoBrid, which is an orphan biologic product in the United States that's used to revert -- or remove the burn tissue, or eschar, prior to covering the wound with a product like Epicel. So as I mentioned earlier, our product portfolio is unique in that we have significant barriers to entry for MACI and Epicel because they're regulated as combination device biologic products. There's no established generic pathway, no biosimilar pathway or 510(k) pathway, so that any market entrants looking to enter the market need to run full clinical development programs, which are very difficult in these spaces. And there's really no near-term like competition for either one of those products. Similarly, NexoBrid, upon approval in the U.S., would have orphan and biologic exclusivity. So it's very unique in terms of our portfolio, and we believe it will allow us to deliver sustained top-tier growth in the years ahead. So the company has a very strong track record of revenue and profit growth since we launched MACI in 2017. We've delivered a compounded annualized revenue growth of 25% since we've launched MACI, and that's really been driven by significant growth for both MACI and Epicel. And we had another strong year of growth in 2021. We expect, based on our preliminary financial results, that we'll have growth in the 25% to 26% range, which is in line with our historical CAGR despite ongoing headwinds from COVID-19 essentially throughout the year. So very pleased with those results. In terms of preliminary financial results for the fourth quarter. For Epicel, we had another very strong quarter in line with our expectations. And for the year, Epicel just had exceptional growth, just over 50% for the entire year. So great performance with Epicel. MACI also had a strong quarter -- or solid quarter in that record revenues for the fourth quarter and strong sequential growth of about 50% compared to the third quarter. Obviously, with the unexpected emergence of the Omicron variant in November, we did see some impact in December in terms of patients deferring cases, scheduling at a higher rate into the Q1 of 2022 than we normally see. Then, of course, with the sharp increase in Omicron cases in the back half of December, the number of cancellations and reschedulings required as patients tested positive during their pre-op screening. But despite those dynamics, we -- the underlying growth drivers for MACI remain very strong. We had the highest biopsies ever for a quarter in the fourth quarter of 2021, the highest month ever in terms of biopsies in terms of November, and we had 30% biopsy growth for the year for MACI. And we also hit our goal of increasing the number of biopsying surgeons by 20% or more in 2021, ending the year with approximately 1,800 biopsying surgeons. And so we also delivered strong -- another year of strong profit and cash flow growth. So we expect to end the year with about $30 million in adjusted EBITDA. We increased our cash and investment balance by about $30 million to $129 million and generating about 1% in free cash flow yield, so a very strong performance for the company in 2021. As we look ahead, we think the company is well positioned to sustain a high revenue and profit growth over the long term. So for 2022, obviously, we expect MACI growth to accelerate as we kind of get normalized patient flow conversion rates and given the strength of the underlying growth drivers, and the case backlog that we exit 2021 with. And then for Epicel, having such strong growth in 2021, we'd expect that it would -- growth would normalize in 2022 back into the sort of low double-digit range. So we expect, as we look over the next several years, to be able to deliver and maintain a growth trajectory that's in line with the CAGR that we've had over the prior several years based on the fact that these are large, under penetrated markets for both MACI and Epicel. We have great competitive barriers to entry, as I mentioned earlier and limited competition. We also expect that we'll be able to continue generating strong, long-term margin expansion and growth based on the revenue growth. So we'd expect gross margins in the 70-plus percent range and adjusted EBITDA margins of over 30%. And again, that's based on the substantial operating leverage that we have in the business and the nature of the business in terms of how we've performed to date. So I'll start quickly with our cartilage repair franchise. So articular cartilage is a highly specialized tissue that is in all of the joints, and it functions to provide a lubricated surface for frictionless movement in the joints, transmit loads to the underlying bones and then protect against compressive sharing in other forces. And chondrocytes are the cells that are responsible for producing articular cartilage. Cartilage injuries in the knee are a significant cause of muscular skeletal morbidity, and cartilage defects are found in about 60% of knee arthroscopies. And the damage is caused by acute and repetitive traumas and other degenerative conditions. And the issue is that once you have a cartilage injury, there's very little intrinsic healing capabilities with cartilage because there's no blood flow into the cartilage. There's no nerves. There's no lymphatics to remove damaged tissues and cells. And so essentially, if you have a cartilage defect, particularly the kinds of focal full thickness cartilage defects down to the bone that MACI is used to treat, obviously, it leads to debilitating joint pain, dysfunction and may lead to osteoarthritis and ultimately, partial and full knee replacements. So the treatment goals are clear, obviously, to reduce symptoms, improve function and prevent the standard -- potential degeneration to osteoarthritis. And there's very limited treatment options prior to MACI really focused on surgical options. So in the left-hand column on this -- in terms of palliative treatments, essentially when a surgeon will do an investigational arthroscopy, often they'll do what's called chondroplasty, and sort of clean up any of the frayed cartilage or floaters in the knee. And that provides pain relief, but doesn't address the underlying cartilage defect. In the middle column, the reparative techniques include things like microfracture called marrow stimulation techniques where basically the surgeons will drill into the subchondral bone. If you think of the cartilage defect as like a pothole in the road that goes all the way down to the bone. Drill into the bone, the theory being that the bone marrow mesenchymal stem cells will bleed into the defect and that those mesenchymal stem cells will differentiate into chondrocytes and produce cartilage. But we know that it actually just produces a fiber cartilage that doesn't have the native properties of normal articular cartilage and doesn't have the durability of repair, particularly in large defects. And so then in the restorative category where MACI is -- as I mentioned, MACI is the only FDA-approved product for the treatment of cartilage defects in the knee. The only other options for surgeons are cadaver-based, so they can use osteochondral allografts, which as the name implies, is basically a plug of bone and cartilage from a cadaver knee that is used to fill the defect or other kinds of like products. So really, MACI stands alone in terms of a restorative technique with clinically proven ability to repair these cartilage defects. And it's a very large market. So we did a very comprehensive market assessment project a few years ago, and it's well understood that there's about 3/4 of 1 million cartilage repair procedures that are done each year in our market assessment or market research with over 200 orthopedic surgeons and payers. Basically, because MACI has such a broad label, as I'll explain in a moment, about half of those patients fall within the MACI label. But we diverted from sort of the normal TAM and asked these surgeons, of the patients you see, how many would you deem to be clinically appropriate for MACI based on the age of the patient, the size and location of the defect, their ability to do the rehab that's required when you have cartilage repair, and basically cut the addressable market by about 2/3 down to 125,000 patients. And then because payers basically require a larger defect before they will cover it, we end up with about 60,000 patients a year that form the addressable patient market. At a $45,000 price point for MACI, it ends up being a very large market opportunity, greater than $2 billion annually. So the product itself is shown on the left side. Essentially, MACI, as I mentioned earlier, is a product where a patient's own cells are seeded on to a resorbable collagen membrane that's been surgically implanted to repair the cartilage defect. So we start by taking a -- the surgeon will take a small biopsy basically 2 Tic Tac-size biopsies of healthy cartilage from a nonweight bearing portion of the knee sent to our facility here in Cambridge where the biopsy is processed, the chondrocytes are isolated and expanded. And when a patient and surgeon are ready to move forward with surgery, those cells are ceded at about 0.5 million to 1 million cells per square centimeter. The product is then shipped to the surgical site, where the surgeon will debride the defect, template the membrane to fit within the defect, and glue it in commercially available glue. So a very simple procedure. And once the membrane is implanted, those cells migrate down to the subchondral bone and start to produce the cartilage that's naturally present in the knee, fill the defect and allow patients to resume an active lifestyle. So a really innovative product that has demonstrated great clinical benefit. And so since we've launched MACI, obviously, it's been one of the fastest-growing products in the industry, and there's a number of product attributes we -- that have led to that strong growth. Number one, as I mentioned earlier, MACI has a very broad label with unsurpassed clinical data. And what this means is that a greater number of patients are eligible to be treated with MACI than prior generations of this technology, and the clinical data demonstrate that it's a significant advancement versus other alternatives for these patients. Secondly, from a surgeon perspective, it's a much less invasive, shorter, faster and simpler procedure than prior generations, which were highly invasive, technically demanding and very time consuming. And so that has really broadened the number of orthopedic surgeons that use MACI and this technology. From a patient perspective, importantly, because this is a less invasive procedure, published rehab protocols are shorter than prior generations of ACI technology and in line with other restorative procedures. So that's very important from a patient perspective. And then finally, MACI has a very strong reimbursement profile. So all the major plans in the U.S. cover MACI under their medical policies. Over 90% of cases are approved. And there's a separate CPT code for surgeon reimbursement and then a separate J-Code for product reimbursement, which is very favorable from a physician perspective. So these are the -- among the attributes that have really driven strong growth for MACI since we launched, and we expect that based on these and other attributes, that we'll continue to see strong growth for MACI as we move out in the years ahead. In addition to that, though, we've continued to try to advance and simplify and make it even less invasive, this MACI procedure. So as I mentioned earlier, MACI was a major technology advancement versus prior generations of ACI for the reasons I mentioned, from a surgical perspective. Even since the introduction of MACI, we've continued to try to simplify this process. We've developed a custom instrument tray with custom cutters that further simplify the procedure where you can now get an exact match of the MACI membrane to the cartilage defect, which again simplifies and makes the procedure even shorter and reduces handling of the membrane. And this has been extremely popular instrumentation for the surgeons, and a majority of the cases are now using the MACI implementation tray for this surgery. And we believe, as we mentioned on our third quarter earnings call, that an arthroscopic delivery system will be the next major advancement in terms of procedural development for -- or advancement for MACI. So this is a project that we've talked about previously. We demonstrated the feasibility of administering MACI arthroscopically. Again, these are live cells on a membrane, so you have to make sure that you can actually deliver the product without impacting cell viability. We've demonstrated that we are able to do that. We spent last year developing a set of instruments with one of our vendors and we have finalized design of those instruments, and we plan to meet with the FDA later this year to determine the clinical requirements to be able to deliver MACI arthroscopically and have that reflected on the label. And we think that this will actually increase the number of surgeons that are interested in using MACI from those who do -- for those who do only arthroscopic procedures. And then certainly, from a patient perspective, we expect that this would be a significant advancement in that it would be a much less invasive surgery still. So really excited about this arthroscopic opportunity and look forward to providing more updates on this as the year progresses. In addition to procedural advancements, we've also been evaluating other joints where MACI may be used, and ankle is clearly the next largest opportunity apart from the knee. So we completed a commercial assessment at the end of last year. And there's about 165,000 ankle resurfacing procedures that are done for cartilage defects in the U.S. each year. The surgeons that were part of this market assessment -- basically about 40% of the patients that they treat would be eligible for MACI again, based on the age of the patient, the size and location of the defect, BMI considerations, rehab compliancy issues, et cetera. So about 40% of those patients would be eligible or deemed clinically appropriate for MACI. And then based on the size of the lesions, we think about 18,000 patients per year would form the addressable patient market for MACI. And again, a $40,000 price point, it makes for a large market opportunity north of $700 million. And combined with the addressable market for MACI in the knee, represents approximately a $3 billion opportunity in the U.S. So again, we plan to meet with the FDA later this year to discuss clinical requirements for MACI in the ankle, but again, very excited to have an opportunity for this life cycle management opportunity as well. And we believe that arthroscopic is more of a midterm growth driver for MACI and that the ankle opportunity would be more of a long-term growth driver for MACI on top of our core business. So turning quickly to our burn care franchise. The treatment pathway for severe hospitalized burn patients, which are the patients that we treat, really is determined by both the size and the depth of the injury. So if a patient has a full thickness burn, which means that the burn goes all the way through the epidermal layer of the skin through the dermal component, down to the muscle or bone, a full thickness burn of any size, that patient is going to be hospitalized for treatment. And similarly, in patients with greater than a 10% total body surface area burn are likely to be hospitalized and treated at specialized burn centers around the country. And again, these are the patients that we focus on. And for these severe burn patients, there's really 2 major aspects to the treatment, apart from addressing any ancillary comorbidities. Number one is that you need to remove the burn tissue or eschar, and then number two, determine how you're going to cover the wound so that you achieve wound closure. So when we look at the burn market opportunity, there's about 0.5 million burns in the U.S. each year. About 40,000 patients are hospitalized. When we think about Epicel, because this is for sort of the most severe burns, greater than 30% total body surface area, full thickness burns, there's about 1,500 patients a year that fall into that category, but Epicel is typically using 40% or greater body surface area burns. And there's about 600 or 800 of those patients per year. Given the premium nature of this product and the price per graft, each order is about a couple of hundred thousand dollars. So you get to a couple of hundred million dollar market opportunity, which is quite substantial. When you think about NexoBrid and those 40,000 patients that are hospitalized, virtually, all of those are going to need some sort of eschar removal. And when we look at sort of the market opportunity there, that likewise is a $200 million plus opportunity. So very significant opportunity for our burn care franchise. So starting with NexoBrid and sort of the first step in the treatment, again, you want to and need to remove the burn tissue or eschar as quickly as possible. It's a source of infection where you have bacteria in that burn tissue or dead skin. There's continued burn progression because the body has an inflammatory response to the damaged tissue. And so it's very important to remove that tissue as quickly as possible. And right now, the standard of care is surgical excision. So basically, these patients are taken into the OR, the -- basically, the burned tissue is excised with a knife. So it's very traumatic for the patients because you have these 3-dimensional burns of various depths. You have a 2-dimensional knife that you're trying just to remove the dead skin. So there's a lot of blood loss, a lot of healthy tissue loss. So clearly, an unmet need for a selective and effective way to remove this eschar. And we think NexoBrid is the answer for that. So NexoBrid is basically a mixture of proteolytic enzymes that are topically applied to a burn. The enzymes are able to recognize proteins that are denatured through thermal burns. And it basically dissolves a way that eschar and leaves the healthy tissue. And you can see in these images here that when this patient presented, very hard to see the depths or the margins around the burn. When NexoBrid was used, you can see that, obviously, the dead tissue was removed and the healthy tissue remained where the patient was wearing a watch. So we think this is a product that can change the standard of care. NexoBrid is approved in the European Union and other countries, completed a Phase III study in the U.S. that met its primary and all secondary endpoints. Currently in the process of resubmitting the BLA, which we expect to do by the middle of this year. Upon approval, as I mentioned earlier, NexoBrid would have both orphan and biologic exclusivities. And importantly, the U.S. BARDA is Biomedical Advanced Research and Development Authority, is funding the program. They're very concerned about mass casualty events in the U.S., mass burn events. And obviously, if you have -- if standard of care is surgical removal and you have some sort of mass casualty event with hundreds or thousands of burn victims, there's not enough OR teams OR space to be able to treat those patients. And so BARDA has a very strong interest in making sure that this product is available in cases of those kinds of events. So turning to Epicel. As I mentioned earlier, Epicel is the only FDA-approved product for permanent skin replacement for adult and pediatric patients with large total body surface area burns. And this is a very important product for patients. Skin is highly immunogenic, its function is a barrier function, obviously, and so you can't transplant another person's skin to a patient, it will simply slough. So the only options for these patients are autografts, where you basically take skin, typically run it through a mesher and try to cover the wound that way. Or to use a product like Epicel when you have these large full thickness burns. Epicel is made much like MACI where we take a small, postage stamp biopsy of healthy tissue. It Is sent to our facility here in Cambridge. We isolate, in this case, the keratinocytes, which are the predominant cell in the epidermal layer of the skin. When we culture these keratinocytes in our proprietary media, basically, they form a cell sheet that's 2 to 8 cells thick. We apply a petroleum gauze. Product is shipped to the burn centers where the graphs are applied to the burn wound. 7 to 10 days later, the petroleum gauze is removed and the healthy skin is exposed. So it's really a remarkable concept to think you can take these small biopsies and within a few weeks, you're able to treat these patients who are critically ill and really don't have other options. So we believe that Epicel certainly is a potentially life-saving product for these patients. Recently, data was presented or published in the Journal of Burn Care & Research, demonstrating that by decile, which is how these patients are managed, there was a profound survival rate increase for patients treated with Epicel versus standard of care. It's a very important product, and we're really proud of the growth we've seen with this product over the last several years. So when we take a step back and sort of look at our overall business. Obviously, our current commercial products are doing extremely well in terms of continued strong growth. As we look out over the years ahead, look forward to a potential NexoBrid approval and commercial revenue potentially in 2023. When we think about the life cycle management opportunities for MACI, we believe that we're going to continue to see very strong revenue and profit growth over the coming years, and obviously, we're focused on supplementing that through business development activities. So we basically focus on -- our activity on additional products that we can add to our sports medicine and our severe burn care franchise. We obviously have products that are high on the innovation scale, and that's the starting point for us. Products that we look at need to have a similar financial profile, given the strength of our profit profile. And so we spend a lot of time on these opportunities. We believe it will help us maintain our high growth position in the market over the next decade or more. And so we're very focused on that. But we're also one of the only companies in the world that have 2 cell therapy products approved in the U.S. We obviously have tremendous capabilities in terms of cell therapy development, manufacturing, and importantly, commercialization. And so we do look at other potential verticals with cell therapies to anchor around. So James, I'm going to stop there and open up the floor for any questions you have.

Great. Thanks so much, Nick. So I think we can go ahead and start off. We got one here about how COVID impacted your results in Q4 and how you kind of see that playing out through the year in 2022?

Well, yes. So obviously, this is an issue that affects a lot of companies in the industry. And I'd just take a step back and first just repeat that. Obviously, we had very strong growth for the year in the 25% to 26%. Epicel growing just over 50% for the year, which is remarkable for a product that's 25 years old. MACI, as an elective surgery, obviously, is impacted by the COVID-19. If you think back over 2021, there was disruption almost throughout the whole year, right? We entered January with sort of a carryover of the winter wave. Last year, the second wave. You got into reopening dynamic shortly thereafter to start the spring and summer. Then you had the Delta variant in the third quarter that sort of bled into the fourth quarter. And then, of course, starting late November, you had the Omicron variant. So it's been a pretty disrupted year, but MACI still, as I mentioned, performed pretty well, particularly as you look at the underlying growth drivers in terms of physician engagement and patient flow. So again, we grew our biopsying surgeon base by more than 20% for the year. Biopsies were up over 30% for the year. But as I mentioned earlier, what we saw is that really, patient-driven dynamics where in December, in particular, you just had deferral of cases that normally would have converted in the fourth quarter. We had a higher number of cases being scheduled. So we didn't see a drop-off in cases being scheduled like you saw sort of in December last year. But they were just skewing more towards the first quarter, which is really just a patient decision when they want to have the surgery. And then, of course, when you've got these high positivity test rates prior to a surgical procedure, that has an impact as well, right? So we saw much higher numbers of sort of case canceled and rescheduling when patients went in and had positive COVID tests. So we think those are dynamics that, obviously, a lot of companies experienced. But given the underlying growth drivers for MACI and the strong performance, as I mentioned, we expect accelerating growth for MACI in 2022. And for Epicel, obviously, strong growth, as I mentioned earlier. That's obviously a critical care product, and so less impacted from a patient perspective in terms of any COVID-19 factors.

Absolutely. And I know you touched on that very impressive growth in Epicel through 2021. Is there any framework you can provide about how to think about that going forward?

Yes. We've -- just like with MACI, we certainly look at growth drivers for Epicel. And we did, a couple of years ago, sort of start to expand modestly. We probably have 14 or 15 people as part of -- in the field as part of the commercial organization for Epicel. And we restructured that, brought in new leadership, bifurcated the sales force into clinical support specialists. There's a very sort of heavy lift from a clinical support perspective for Epicel is these are patients who are in the hospital for months and multiple treatments and so on. So there's a pretty heavy clinical support role there. So we bifurcated the sales force into sales reps who are focused on demand generation and then clinical support folks. And that really free people up to kind of get into the right roles to support patients. And one of the things we've seen since then is that really getting the reps and the support specialists are engaged much earlier in the treatment planning process. So we've seen -- and we've had an opportunity to expand sort of the number of centers that are biopsying and treating patients, the number of patients being treated. We talked about record biopsies throughout the year in 2021. And then we saw a big step-up in the number of graphs per patient. And again, that has a lot to do with getting involved and making -- early, and making sure the patient has the right number of grafts to properly close the wound. And so it's really those 3 factors. More centers using the product, more patients being treated by those centers and then more grafts for -- per patient, that have really driven such strong growth for Epicel, which, as I mentioned earlier, for a product that's been on the market for 25 years, it's almost -- it's just unbelievable how well the commercial team has executed. And we're really happy, obviously, because these are critically ill patients, and this is a potentially life-saving product for those patients.

Absolutely. That's -- it's really helpful color. We got one follow-up kind of coming off of the question on COVID impact to Q4. How should we think about the MACI backlog carrying into 2022?

Yes. Well, we talked a lot about this on our third quarter earnings call where we said we really -- given sort of the dynamics, and this was even before Omicron emerged, we just said there's a lot of disruption in the system. We exited the third quarter with about $7 million in backlog. And we said we expected that, that would actually work -- be worked off in 2022. Obviously, the backlog increased in the fourth quarter further. And so we just expect that -- it's hard to predict exactly how it's going to be worked down, but we certainly expect that it will be over the course of the year. These are patients that have debilitating knee injuries. They don't heal on their own. So the patients, we expect, will come back as we've seen in other waves of COVID, where we've recovered a pretty significant -- the majority of the patients ultimately end up being treated. It's really just a timing issue from our perspective.

Thanks. That makes a lot of sense. I know historically, you've expanded that MACI sales force. It would be good, I think, to get an update on how it's going with the new reps. And when would you think about expanding it further?

Yes. So we had -- in the early launch years, we essentially expanded the MACI sales force in 2017, '18, '19. And then 2020 was sort of the more significant sales force expansion where we did a very large sales force sizing project with [ ZS ] associates, increased the number of target surgeons that we were focused from 3,000 to 5,000 surgeons. And as we've talked about since we've added -- interesting, right, where these sales reps joined in April of 2020, so right in the heat of -- or the heart of sort of the initial COVID shutdowns. But they're really experienced reps most coming from large cap med tech with a decade of experience. And so they actually had a lot of time to get prepped and hit the ground running pretty fast. We saw new surgeon growth rates that were the highest among these new territories and so on. So they've done really well. And I think that's reflected in the fact that we've continued to increase even during all of this disruption, the number of biopsying surgeons pretty dramatically, right? So they play -- those reps play a big role in that. And this was one that we looked out a few years and said we're going to go from 49 to 76 territories. It 50-plus percent increase. We think that will carry us for a couple of years, at least through 2022. But we'll look at it again, refresh sort of the targeting. Determine, based on our strong growth, whether we'll need to add any territories or not. I certainly wouldn't expect it would be a dramatic increase, but we want to make sure we support the business appropriately and continue to maintain our strong growth rate.

Fantastic. That's helpful color on those MACI sales reps. And one more that's come in. I think we've got time just for this last one, and then I want to make sure you've got time for some closing remarks. On the MACI kind of clinical profile, are there cases where MACI can prevent or delay knee replacements?

Well, that is sort of the theoretical -- we don't have long-ish term data. The progression, as I mentioned earlier, right, which is you have these cartilage defects, they go all the way down to the bone. They don't heal themselves. Over time, osteoarthritis develops and osteoarthritis ultimately leads to partial or full knee replacement. So we don't -- we expect that fixing that cartilage repair would sort of stop that cascade. We don't have that -- that's a decade or more long process, and we don't have the long-term data. But obviously, that's the belief that by fixing these repairs, you do prevent osteoarthritis.

Got it. That's also really helpful color. Well, appreciate so much the time today, Nick. I want to hand it back to you to make any closing remarks you might have.

Well, yes, and we obviously appreciate, James, being invited to present. Obviously, as I mentioned, really excited that we continued with strong growth in 2021. I think we're really well positioned for 2022 and beyond and just excited to continue to build the company. So thanks so much.