Aurinia Pharmaceuticals Inc (AUPH) 2022 Q2 法說會逐字稿

Greetings, and welcome to Aurinia Pharmaceuticals' Second Quarter 2022 Financial and Operational Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, DeDe Sheel, Aurinia's Vice President of Investor Relations. Thank you. You may begin.

Thank you, Doug, and thank you all for joining today's call and webcast to discuss Aurinia's second quarter 2022 financial results. Joining me this morning to lead the call are Peter Greenleaf, President and CEO; and Joe Miller, Chief Financial Officer; Dr. Neil Solomons, Chief Medical Officer, will also be available at the conclusion of our prepared remarks for the Q&A portion of the call.

This morning, we issued a press release announcing our financial results and recent operational highlights and filed our quarterly report on Form 10-Q. For more information, please refer to our filings with the U.S. SEC, which are available on our website at auriniapharma.com.

During this call, we may make forward-looking statements based on our current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties, and our actual results may differ materially. For a discussion of factors that could affect our future financial results and business, please refer to the disclosures in our press release and our quarterly report on Form 10-Q, along with our 10-K and all of our recent filings with the SEC and Canadian securities authorities. Please note that all statements made during today's call are current as of today, August 4, 2022, unless otherwise noted, and are based upon information currently available to us at this time. Except as required by law, we assume no obligation to update any such statements.

Let me now turn the call over to Aurinia's President and CEO, Peter Greenleaf. Peter?

Thanks, DeDe, and thanks to everyone for joining us today. On the call today, I'll start with a review of our commercial business, including LUPKYNIS' performance in the second quarter and the trends we're seeing for the product entering the second half of the year. After that, I'll discuss the recent positive opinion by the CHMP of the EMA, putting us on the verge of gaining approval for LUPKYNIS in Europe. I'll also cover the additional ongoing clinical work to reinforce LUPKYNIS' benefits for patients and briefly discuss recent events related to our intellectual property. Finally, I'll provide a quick update on our R&D pipeline, and then turn the call over to Joe to provide more details on the second quarter financial results and our overall financial position.

So, let's get started with our second quarter business performance. Total net sales were $28.2 million for the quarter, with LUPKYNIS product revenues contributing $28.1 million. During the first quarter of this year, we saw many encouraging trends supporting the commercial performance of LUPKYNIS, the majority of which persisted into the second quarter, with a number of them actually improving quarter over quarter.

Here are some positive trends we saw in Q2. Total patients on therapy grew to 1,274, up 19% from 1,071 at the end of Q1. We saw notable improvements in refill rates and shipped the highest number of wallets in a quarter since the launch of the product. Persistency trends in our business also remain encouraging. Consistent with the last quarter, approximately 70% of commercial patients remain on treatment at 6 months, and at 9 months, approximately 60% of patients remain on treatment. As previously discussed, we will continue to update these figures as we progress further into the launch.

Conversion rates and patient access remain robust; whether it's 30-, 60-, or 90-day conversion rates all continue to improve and are currently at peak levels since launch. Efforts to increase health care provider adoption of LUPKYNIS in regular practice remain consistent and positive. Each month, we're adding new prescribers, with 190 new prescribers in quarter 2 alone. Prescribing rates remain balanced between both rheumatologists and nephrologists. Net realizable revenue per patient for the quarter is higher than our initial guidance of $65,000 per year. But as we've discussed previously, we continue to expect to approach this figure on an annualized basis, as more patients go on and stay on therapy over time and its persistency in dosing and payer mix evolve.

So, while we're pleased with those positive trends, we're less pleased with our performance on PSFs for the quarter. In Q2, we added a total of 409 PSFs, bringing our year-to-date total to 867 PSFs as of June 30. The updated number of prescription start forms year to date, through Friday, July 29, is 981. We have been analyzing the data to further understand the trends in the market, the overall patient journey, physician prescribing habits, and the potential for any seasonality in the lupus nephritis community.

Over time, we want to assess and separate any annual seasonality that might exist from historic COVID treatments and trends that we've seen in the marketplace. As we know, 2021 was a year of COVID variant changes that drove impact on the market and our business. In 2022, we now need to evaluate any seasonality trend differences throughout the calendar year impacting lupus and lupus treatments. But regardless of seasonality, we are attacking points that have historically been opportunities that have been closed to us and opportunities where we know deeper investment will have impact, with the overall goal of getting back to positive prescription start form trends and improving retention for our patients.

We are excited with the addition of Scott Habig as our Chief Commercial Officer to lead the commercial group following the transition from Max Colao. Scott is a seasoned industry veteran with the intimate knowledge of both lupus and the lupus nephritis markets and patient population. Under Scott's leadership, we are intensifying our focus both -- with both our prescriber base and patients. We know in the first year of the launch, major medical centers that contain specialized lupus treatment programs were closed to both patients and pharmaceutical industry representatives. During Q2, we increased our focus and our thinking around how best to partner with major medical centers around the country that offer these specialized lupus programs. We believe that these centers hold access to a great number of lupus patients, and with the proper screening, have the ability to diagnose early lupus nephritis treatment candidates, so we look forward to reporting on our impact in these centers over the upcoming months.

In addition to those efforts, we're putting an increased emphasis on patient retention strategies, both in terms of support and education, both nationally and locally, and in terms of broad-based diagnosis and patient awareness driving initiatives. With these initiatives and more, we are moving forward to a goal of improved growth in PSFs, both in Q3 and Q4. And with an intense focus on commercial execution and our new commercial leadership in place, we remain confident and reaffirm our guidance for LUPKYNIS net sales of $115 million to $135 million for the full calendar year 2022.

Turning to lupus outside -- to LUPKYNIS outside the U.S., last month, we again achieved a major milestone for our company. The CHMP recommended LUPKYNIS for marketing authorization to treat adults with lupus nephritis. Based on the CHMP recommendation, a decision to formally approve LUPKYNIS by the European Commission is expected by the end of the third quarter. Once voclosporin is approved by the EMA, depending on the favorability of the approved label, we have the potential to receive a milestone payment from Otsuka of up to $30 million. In addition, we also have the potential to receive low double-digit royalties on sales and supply cost recovery through a cost-plus arrangement going forward. As a reminder, our revenue guidance does not include this milestone payment, royalty payments, or manufacturing revenue anticipated from ex-U.S. sales related to our licensing agreement with Otsuka to market voclosporin in the European Union and Japan, so we look forward to continuing to report our progress outside the U.S. to you soon.

Shifting gears to our broader R&D efforts, with regard to our development work related to LUPKYNIS, we had significant visibility with health care providers as we had a presence in 2 major medical conferences in the quarter. During Q2, we presented for the first time more complete results from the voclosporin AURORA 2 continuation study at the 59th European Renal Association Congress. This was quickly followed by a presentation at the 2022 European Congress of Rheumatology, and data from this study, which we reported in December, looked at patients continuing from the pivotal 12-month AURORA study for an additional 24 months of treatment. This data reinforces the favorable risk-benefit profile of LUPKYNIS over a 3-year period, with safety and efficacy comparable to that seen in the original AURORA trial. We still plan to submit the manuscript for peer-reviewed publication in the second half of 2022, as well as abstracts for data presentations at additional major medical meetings throughout both '22 and into 2023.

On the topic of additional development work with LUPKYNIS, recruitment of patients and the initiation of new sites into both the VOCAL pediatric study and the ENLIGHT-LN registry is continuing. And as a reminder, we committed to the VOCAL study as part of our FDA approval, while we initiated the registry study to gain further knowledge about patients being treated with LUPKYNIS, and to help physicians and payers to improve patient treatment and care, and to ensure access to therapy.

Moving on to our research pipeline, we continue to advance IND-enabling work on both AUR200 and AUR300, and we remain on track to submit INDs for both compounds in 2023. These are important next steps in the build-out of our pipeline to build long-term, sustainable growth for the company.

As announced last week, the U.S. Patent and Trade Office's Patent Trial and Appeal Board notified us of its decision to institute trial on the inter partes review, or IPR, filed by Sun Pharmaceuticals. The patent is subject to the IPRs related to LUPKYNIS dosing protocol and extends patent protection to 2037. The determination on patentability and relative to this IPR is expected on or prior to July 26, 2023.

Regardless of the final outcomes of the IPR, we have filed a standard patent term extension for our existing composition of matter, which, if granted, when -- could extend the terms for that patent by 5 years to October of 2027. We also have other patent applications underway, which, if granted, could offer additional intellectual property protection for LUPKYNIS. In addition, our lawsuit against Sun Pharmaceuticals, where we allege their infringement on our patent on voclosporin in an ophthalmic solution remains ongoing. In all cases, we have and are intending to continue to take action to protect our intellectual property rights for LUPKYNIS.

So, before I turn the call over to Joe, I want to highlight that we remain well positioned relative to many of our biopharma peer companies out there, with a healthy balance sheet, including almost $400 million of cash on hand and no significant debtor obligations. While the capital markets remain difficult and volatile, we can fund our business operations for at least the next few years and remain flexible to adapt to the current market environment.

I'll now turn the call over to Joe Miller for a more detailed review of our financial results, and then I'll return at the end of the call for a quick recap and to answer any questions you might have. Joe?

Thank you, Peter, and good morning, everyone. As of June 30, 2022, we had cash, cash equivalents, and restricted cash in investments of $391.7 million, compared to $466.1 million at December 31, 2021. The decrease is primarily related to the continued investment in commercialization activities, advancement of our pipeline, and a payment for the achievement of a onetime milestone, partially offset by an increase in cash receipts from LUPKYNIS sales. We believe that we have sufficient financial resources to fund our current operations, include funding commercial activities, FDA-related post-approval commitments, manufacturing and packaging of commercial drug supply, funding our infrastructure, conducting planned research and development programs, investing in our pipeline, and operating activities for at least the next few years.

Total net revenue was $28.2 million and $6.6 million for the quarters ended June 30, 2022 and June 30, 2021, respectively. Total revenue was $49.8 million and $7.5 million for the 6 months ended June 30, 2022 and June 30, 2021. Our revenues primarily consist of product revenue, net of adjustments for LUPKYNIS. Revenue growth for both periods is attributed to further penetration in the lupus nephritis market, coupled with improvements in a number of our key revenue-driving metrics.

Total cost of sales and operating expenses for the quarter ended June 30, 2022 were $64.2 million, in comparison to $53.8 million for the quarter ended June 30, 2021. Total cost of sales and operating expenses for the 6 months ended June 30, 2022, were $123.7 million, in comparison to $105.2 million for the 6 months ended June 30, 2021. Further breakdown of operating expense drivers and fluctuations will be explained in a moment.

Cost of sales were $1.6 million and $308,000 for the quarter ended June 30, 2022 and June 30, 2021, respectively. Cost of sales were $1.9 million and $356,000 for the 6 months ended June 30, 2022, and June 30, 2021. The increase for both periods was primarily due to an increase in product revenue, coupled with an increase in our safety stock reserve.

Gross margin for the 3 months ended June 30, 2022 and June 30, 2021, was approximately 94% and 95%. Gross margin for the 6 months ended June 30, 2022 and June 30, 2021 was approximately 96% and 95%, respectively. We believe that gross margin will remain fairly consistent going forward.

Selling, general, and administrative, or SG&A expenses, inclusive of our share-based compensation, were $51.5 million and $44.3 million for the quarters ended June 30, 2022 and June 30, 2021, respectively. SG&A expenses inclusive of share-based compensation expense were $96.7 million and $84.1 million for the 6 months ended June 30, 2022 and June 30, 2021. The increase was primarily due to an increase in share-based compensation, as well as expenses related to corporate legal matters and investment in our infrastructure to support the commercialization of LUPKYNIS. Noncash SG&A share-based compensation expense for the quarters ended June 30, 2020 and June 30, 2021 were $8.9 million and $6.5 million, respectively. Noncash SG&A share-based compensation expense for the 6 months ended June 30, 2022 and June 30, 2021 was $14.9 million and $13.2 million, respectively.

R&D expenses, inclusive of share-based compensation expense, were $11.5 million and $10.1 million for the 3 months ended June 30, 2022 and 2021. The 6 months ended June 30, 2022 and June 30, 2021, R&D expenses, inclusive of share-based compensation expense, was $24.1 million and $19.9 million. The primary driver for the increase for both periods was due to an increase in expenses related to our AUR200 and AUR300 development programs. Noncash R&D share-based compensation expense for the quarters ended June 30, '22 and June 30, 2021 was $1.1 million for both periods. Noncash R&D share-based compensation expense for the 6 months ended June 30, 2022 and June 30, 2021 was $2 million and $2.2 million, respectively.

For the quarters ended June 30, 2022, Aurinia recorded a net loss of $35.5 million, or $0.25 net loss per common share, as compared to a net loss of $47 million, or $0.37 net loss per common share, for the quarter ended June 30, 2021. For the 6 months ended June 30, 2022, Aurinia reported a net loss of $73.1 million, or $0.52 net loss per common share, as compared to a net loss of $97.4 million, or $0.76 net loss per common share, for the 6 months ended June 30, 2021.

With that, I'd like to hand the call back over to Peter for closing remarks. Peter?

Thanks, Joe. As you heard throughout the call, we remain focused on driving LUPKYNIS and capitalizing on the work we've done throughout the first half of the year. Beyond the U.S. commercial results, we are currently moving towards (inaudible) approval in Europe, triggering the potential for additional milestones, as well as moving closer to IND submission for 2 novel assets in the pipeline, AUR200 and 300. We continue to operate with a healthy the balance sheet, which will enable us to execute on our long-term strategy. We look forward to updating you on these items as the year progresses, and I want to thank everybody for joining us on the call today.

So, with that, we'll now open the call for questions. Operator?

(Operator Instructions) Our first question comes from the line of Maury Raycroft with Jefferies.

This is Farzin, on for Maury. So, what are some of the strategic changes expected heading into the second half with Scott in place now? For example, like one of the major issues, of course, is the use of generic CNIs, like how to tackle that.

Yes. So just to clarify and to repeat the question, the question was, what additional strategies are we looking at under new leadership in the commercial organization in the back half of the year? My answer to that would be, listen, outside of taking a refreshed look at the basic blocking and tackling, everything from rep-level impact to deployment against our top targets to our penetration in both high-potential targets and then sort of the more dispersed, lower-potential targets, there really are the 2 larger initiatives that I mentioned on the call. One, we know for the last couple of years because of COVID, the major tertiary care centers or major medical centers have been fairly closed to us. Not only have they been closed to us, they've been closed to our lupus patients. We know that during 2021, the majority, if not all, of these major medical centers were not having regular lupus clinics.

So we put renewed energy and interest around these major medical centers, not only because access has become more open there, but also because I think it takes a different approach, everything from formulary adoption to purchasing patterns and how these major medical centers purchased product to how our reps and medical affairs and everyone interact within these centers. So, we remain really optimistic about the potential to generate new patient flow out of these major medical centers.

The second is that our business is driven in 2 ways. It's acquiring new patients, and then keeping those patients over time. And we've put a renewed effort down on patient retention, patient education to ensure that, whether it be 90-day, 6-month, 1-year retention continues to improve over time and the patients receive their prescriptions. And by working on these areas, we feel confident that we'll continue to get back on a growth trajectory here and achieve our guidance for the year.

Got it. And then one follow-up. Like, are you seeing more discontinuations in community or academic settings?

I'm sorry, can you repeat the question?

So the patient discontinuation rate is dropping from 6 to 9 months, so are you seeing more discontinuations in community or academic settings, and you have any unique insights from the prescribers?

Yes. Since the majority of our patients right now are coming from the community setting, those patients are coming out of the community, not the academic center. I think when we think about persistency across the board, that's -- we've got to look at that, whether it be in the academic center or the community.

Our next question comes from the line of Joseph Schwartz with SVB Securities.

This is Will on for Joe. So one for us on patient start forms. Could you provide any other insight into the dynamics at play here, other than the seasonality impact, given this was a factor last year, but the quarter numbers are still a bit lower than what we saw last year? So, other than seasonality, kind of can you help us contextualize this a bit? And how should we be thinking about these numbers as we progress into the back half of the year?

Yes. So, the broad seasonality definition is one that we're looking at. And to go a little bit deeper into that, as we look at both the summertime and then the Christmas and Thanksgiving holidays, those are 2 areas that we're starting to look at not just lupus nephritis trends, but more generally, lupus trends. And I mean, even if you look at the numbers just reported by GSK on Benlysta, their NRx growth -- and this is lupus and lupus nephritis combined, obviously -- was very low single digit, which was lower than where they were in terms of NRx growth in the first quarter.

So we know that there's less engagement from patients into offices, and potentially offices and physicians connecting with those patients themselves, so we're watching it. Because last year, in both of those time periods, we had the Delta variant last year in this time period, and then we had the Omicron variant at the end of the year. Well, we don't have those this year, and we're seeing a similar trend as we enter this quarter and into third quarter. So, we're watching it. And all I can tell you is it would appear that there's less engagement in the office, and it's reflected in other lupus products outside of just ours as well.

The initiatives we're putting behind it, what I can tell you is everything from driving focus, messaging, and incentives in our sales force programs during this period to, as I mentioned, the renewed tactics in certain areas, which would include on the patient side, even calling patients, trying to ensure that ones that have opted into our Aurinia Alliance program are getting proactive calls from Aurinia Alliance to ensure that they're seeing their physicians and that they were filling their prescriptions. So, I think we're doing everything that we have in our control to try to sort of bend the trend on where the PSF numbers came in for the quarter.

I guess the last point, as we look at Q3 and Q4, we got to get the trend growth back. And it will be a mix between growing PSFs and retention, and ensuring that we get maximized prescriptions on every week and every month. And as you saw in this quarter, with the combination of both retention and new patients, we were able to achieve the quarter. And that's why we're confident we can achieve Q3 and Q4 and come into our guidance range of $115 million to $135 million.

Our next question comes from the line of Ed Arce with H.C. Wainwright.

Congrats on the solid quarter, despite the headwinds. Just one question for me. Peter, if you could, I know the IPR process is top of mind with a lot of investors now. Just wondering if you could give us some sense of your confidence in the strength of the 036 patent and just general thoughts there as this process unfolds over the next year or so.

Thanks, Ed. And obviously, we have a high degree of confidence in our patents, and we have every intention to fully prosecute on the patents we've been issued. I can't talk a lot about sort of legal strategy as it pertains to IPR, but I can tell you we will utilize all tools we have in our control to ensure the longevity of our business and the longevity of the patents. I don't mean to be fairly open-ended with the answer, but obviously, since we are an active litigation, there's not a ton I can say about our defense outside of, we will and have previously made sure to enforce the patents we've been given.

Okay. Fair enough. And then one follow-up for Joe. Just on the COGS or the gross margins, I noticed that it -- the gross margin went down this quarter to 94% from about 99% in the first quarter. Just wondering if there are some dynamics we should think about going forward? Or I think you said earlier, it looks to be stable, so around what level should we expect going forward?

Yes, I think it should remain fairly consistent with what you saw kind of year to date, Joe, and -- or Ed, I'm sorry. And yes, I highlighted within the quarter, we had kind of a onetime reserve for our safety stock levels that kind of dated back to some of the validation batches and quick-launch inventory that we had on hand from 2019 and beyond. So, if we kind of strip that out, we'll see that the numbers remain fairly consistent.

Our next question comes from the line of Justin Kim with Oppenheimer.

Maybe just want to switch gears a little bit; as you think about sort of long-term retention with patients and sort of those numbers out to 9, 12, and beyond, one of the things we've been hearing has been an interest in biopsy data, presumably from AURORA 2. Just wondering if you had any updates there in terms of what might become available the coming 6 to 12 months?

Yes, 2 things. First off, and I know you all do this, Justin, but if you benchmark our retention numbers at 6 and 9 months versus others that report what their persistency looks like, whether biologic or small-molecule products in different diseases, actually, I think we benchmark really well in terms of those percentage numbers. But we aspire to retain even higher percentages. To your -- and we have strategies in place to try to enact that, both with the individual patient, broad-based patient education, and everything down to our Aurinia Alliance work.

In terms of biopsy data, as I've said previously, there was a subset of patients that we looked at in the AURORA study -- and Neil, you should jump in here, too, if I miss anything -- but that biopsy data continues to be something that, because of the way it has to be scrutinized, continues to be reviewed. And as I think both Neil and I have always said, there's a small N here to look at, so we should all -- when and if we have this data ready for prime time, just reflect that it's probably going to be of a small N of patients. Neil, what would you add to that?

Yes. No, that's exactly right, Peter. There's a small, fewer than 10% of the patients had repeat biopsies. Not only histology is being looked at, but there's also some samples being sent away for some proteomics work as well, which will be interesting. And we'll report back as we get more data on that.

Okay. Great. And maybe just a follow-up to a prior question. In terms of the pace of scripts and thinking about guidance, is the right way to think about the low end of guidance assuming what 1Q was and kind of like that stable level of scripts? Is that the going assumption there? What makes you comfortable with maybe no change in guidance that you would sort of revert back to that? Like kind of could you qualitatively sort of talk about how -- what it takes to sort of reach maybe that low end?

Yes. So, the first, I would say, we wouldn't have reaffirmed guidance if we felt we couldn't hit in the range. And how we get there is, one, prescription start forms need to get back to a growth trajectory, and that's not important for just Q3 and Q4, but for 2023 and beyond. And second, that we continue to see the types of retention that we've seen up to this stage and see potentially slight improvements in that, alongside of what our net price has been and what we assume it will adjust to for a fully annualized basis. So, it's all of those components, Justin.

Our next question comes from the line of Olivia Brayer with Cantor Fitzgerald.

I wanted to ask a follow-up on patient start forms. It looks like you had about 111 in July, which is obviously trending lower than second quarter. I know you guys mentioned earlier that you think you can get growth back in third quarter and fourth quarter, so can you just help us with when you're expecting to see that growth back? And then, I've got a follow-up on IP.

Yes, listen, the growth we're expecting to see throughout the quarter, it's the initiatives we're driving with our sales organization, the intensity we're putting down on this as we sort of clear through August, and in December -- in September and October, we need to see these numbers get back to an increased trend, so I would say now all the way through to Q3 and to the end of the year. So, I mean, that's the short answer.

And I want to reinforce that it's a combination of not just PSF growth trend, because you have to have that, but on top of that, you have to have a very solid net price, and you have to have solid patient retention. So that's -- they all have to be working together, and that should be evidenced through the quarter we just reported.

Okay. Got it. And then on IP, can you remind us what other levers do you guys have to pull and additional patents that could extend your IP beyond that 2027 composition of matter, and also, when we could get updates on those?

Well, the first that's already been issued is the one that's in question relative to the IPR challenge, which is our 036 patent that, as you all know, was the patent that was issued a couple of years ago by the USPTO, based upon the observation we saw in both AURA and AURORA, where when dose adjusting downwards based on eGFR response, we actually saw improvement in terms of patient response in terms of their lowering of proteinuria. So, that patent goes all the way to 2037. In addition to that patent, we have additional filings on file with the USPTO that we'll talk more about as we get closer in or as these patents issue.

But I would think of these more as ring-fencing strategies around the patents that we current currently have. And we're constantly looking at where we might be able to, either through the data we've generated or the generation of new data, both on different unique patents we're able to file, and of course, looking and exploring different formulations, et cetera, that could help bolster that. But we can only talk about it when it becomes real. I know that those conversations, as well as active patent filings, are either filed, in motion, or in conversation at this stage. So, we intend to continue to see the IPR through, and we'll keep all options open as we execute on our strategy and defend our IP.

Our next question comes from the line of Sahil Dhingra with RBC.

This is Sahil Dhingra for Doug Miehm. Could you please comment on the refill rates? I understand it was low in Q1 because of Omicron, and Q2 might have -- the refill rates might have improved. And also, quarter-to-date, is there any improvement in the refill rates versus Q2?

Improvement -- I'm sorry, I didn't get the -- improvement in what? I'm sorry.

Refill rates.

Oh, refill rates. Yes, I mean, listen, Joe, you can -- I don't know if there's anything trend-wise, we can comment on. Our refill rates were better, and I think that's an example of where growing this business has multiple parameters, right? It's bringing in new patients, yes, and then it's retaining the patients that we have and ensuring that they stay on the right dose of the product. So, I think that's a good education of our patients. We have to continue to do that. I think we need to follow up with these patients through both Aurinia Alliance and through the physician office and, in the Six Sigma sort of way, ensuring that we attack all points of driving new prescriptions and trying to ensure retention of the patients that we've got. Joe, can you add any more color on refill rates and...

Yes. As we mentioned, we shipped the highest number of wallets to date this past quarter, so I think from a number of wallets per patient on average, we're seeing those rates are still pretty good. We haven't seen kind of dose adjustments coming into play too often, so our refill rates are strong per patient, and you're seeing that kind of bleed through in the average number of wallets we are shipping per patient per month.

There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.

I want to thank everyone for joining us today. We look forward to updating you in the upcoming months and next quarter. Thank you very much.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.