Edap Tms SA (EDAP) 2023 Q4 法說會逐字稿

Greetings and welcome to the EDAP TMS fourth-quarter 2023 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. John Fraunces of LifeSci Advisors. Thank you, you may begin.

Good morning. Thank you for joining us for the EDAP TMS fourth-quarter and full-year 2023 financial and operating results conference call. Joining me on today's call are Ryan Rhodes, Chief Executive Officer; Ken Mobeck, Chief Financial Officer; and François Dietsch, Chief Accounting Officer.

Before we begin, I'd like to remind everyone that management's remarks today may contain forward-looking statements, which include statements regarding the company's growth and expansion plans. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in such forward-looking statements. Factors that may cause such a difference include but are not limited to those described in the company's filings with the Securities and Exchange Commission.

I'd now like to turn the call over to EDAP's Chief Executive Officer, Ryan Rhodes. Ryan?

Thank you, John, and good morning, everyone. We are pleased to report strong operating results for the fourth quarter, capping a highly successful year in which we established Focal One robotic HIFU as one of the fastest-growing treatment options in the management of prostate cancer.

EDAP reported record fourth quarter 2023 total revenue in US dollars of $21.3 million, an increase of 31.4% over the fourth quarter of 2022. Many of the potential deals that had reached an advanced stage and discussion in the third quarter eventually closed in the fourth quarter, which reflects the seasonality of the capital equipment purchasing cycle.

More importantly, we believe that the final decision in selecting Focal one was based on a growing recognition amongst hospitals that the Focal One robotic technology platform represents a strategic capital investment to help maintain and attract prostate cancer patients to their facilities.

For the full year 2023, EDAP reported record revenues in US dollars of $65.4 million, an increase of 12.9% over 2022. Full year HIFU revenue came in at $22.3 million, an increase of 35.6% over full year 2022, which again reflects an increased number of Focal One system placements and continued strong procedure volumes year over year.

In the fourth quarter of 2023, we placed quarterly record of 12 Focal One systems. Demand for Focal One continues to grow and in a very balanced manner with placements made in the US and outside the US, and across both academic and community urologists. We also experienced some notable wins during the quarter, which included a Focal One sale to New York University Langone Hospital, which is ranked Number 3 in urology hospitals in the US News & World Report.

According to the same report, Focal One is now in 7 of the 10 best hospitals for urology and 6 of the 10 best hospitals for cancer. We also sold a Focal One system to Roswell Park Comprehensive Cancer Center in Buffalo, New York. Roswell Park is included amongst the select group of prestigious National Cancer Institute-designated hospitals in the United States and also offers one of the few select uro-oncology fellowship programs approved by the Society of Urologic Oncology.

Additional capital sales included Hartford Healthcare Hospital in Connecticut, which is the first system placement in the state of Connecticut. And Baptist Health Regional Hospital, a leading hospital located in Boca Raton, Florida.

I would now like to briefly touch on the positive trends we are seeing with respect to Focal One HIFU procedure growth in the US, which represents one of the most important metrics for the growth of our business. The fourth quarter of 2023 marked the fifth consecutive quarter of sequential procedure growth, and on a year-over-year basis the number of US Focal One HIFU procedures grew an impressive 136%. We believe procedure growth is being driven by the investments that we continue to make in expanding our commercial and clinical teams, along with positive reimbursement for HIFU and more patients seeking out effective non-invasive treatment options for the management of prostate cancer.

Focal One is enabling urologists to offer select patients in non-invasive, non-surgical, and radiation-free treatment solution with excellent oncologic control. Along with physician demand, we also believe that more men who are diagnosed with prostate cancer continue to seek out treatment options that target the cancer with the potential for fewer patient side effects that negatively impact quality of life.

As the number of Focal One procedures continues to grow, we believe that more men are becoming aware of this new treatment option, and this is likely to accelerate ongoing patient driven demand. We also believe that recent and ongoing investments in both cancer diagnostics and imaging technology should lead to improved patient risk stratification, which in turn will help identify more patients who could benefit from Focal One robotic HIFU.

Demand is also being driven by reimbursement. At the APC 6 Level reimbursement, it is economically attractive for hospitals to making investment into a Focal One program. And we think this is providing another meaningful driver for overall demand. In a moment, a more detailed update on our progress with respect to reimbursement.

Finally, the strategic investments we made in our regional clinical teams are also helping to drive demand for hospital based Focal One programs. Over time, we have carefully selected outstanding and accomplished professionals who possess the experience in both building significant relationships as well as launching successful Focal One programs. These investments are a key component to our continued growth and success.

I would also like to mention the appointment of Dr. Lance Willsey to our Board of Directors in December. Dr. Willsey is a trained urologists and researcher who has over 30 years of private and public board experience focused in the areas of cancer diagnostics and therapeutics. He completed his surgical and urology training at the Massachusetts General Hospital and additional post-graduate training in the Harvard University Steele Lab in the Dana-Farber Cancer Institute. Dr. Willsey has already made significant contributions to our company and we are very excited to have him as both an EDAP Board member and a trusted adviser as we move forward.

Now I would like to spend some time discussing the progress we have made with respect to reimbursement. As a reminder, the CMS final rule for the hospital outpatient prospective payment system and physician fee schedule for 2024 was released in November of 2023. The hospital payment for a Focal One procedure was maintained as a urology ambulatory payment classification, or APC Level 6 procedure. This results in a national average Medicare payment of $8,777, a 2.6% increase over 2023. This new rate became effective on January 1, 2024.

I would also like to note that as hospitals look to adopt focal therapy, it is clear that Focal One is a desirable option for them to invest in as the Focal One robotic HIFU platform provides a precise and efficient treatment option as compared to older or MRI based technologies that typically require higher staffing levels and that absorb more hospital resources. I would like to also note that we are already seeing the effects from improved reimbursement in Switzerland. In July of 2023, we announced reimbursement approval in Switzerland for the use of high intensity focused ultrasound for the treatment of prostate cancer.

With this higher reimbursement now in place, I am pleased to report that we sold a Focal One system to Hohmad Klinik located in the city of Thun in the fourth quarter, which was a direct result of securing reimbursement approval. Finally, in December, we announced that the French National Authority for Health, or HAS released a favorable recommendation for the reimbursement of HIFU therapy for the treatment of prostate cancer.

More specifically, the favorable opinion relates to HIFU as a primary treatment for intermediate risk localized prostate cancer as well as a salvage option after failed radiation therapy. The positive opinion from HAS is an important milestone along the pathway for securing final reimbursement in France. Based on this positive opinion, the French social security authorities, can now use this recommendation for including HIFU procedures in its next review cycle to determine the procedures reimbursement rate and the timing for when such reimbursement would go into effect.

I will now provide an update on recent regulatory actions. In December, the Taiwan health authorities approved Focal One for the treatment of prostate cancer. With this positive news, the EDAP Southeast Asia local team secure the first sale of Focal One through its Taiwanese distribution partner. Taiwan represents an attractive market for Focal One, and we expect this region to contribute to the ongoing growth of our international business over time.

On March 4, we announced that the FDA granted our Focal One robotic HIFU system breakthrough device designation for the treatment of deep infiltrating endometriosis. Receiving breakthrough device designation from the FDA is not only a significant milestone for our company, but also reflects the FDA's recognition that deep infiltrating endometriosis remains a significant unmet medical need in women's health care today with fewer treatment alternatives.

The designation also reflects our continued commitment to expand the use of Focal One robotic HIFU technology to treat other medical conditions beyond prostate disease. By expanding our company's proprietary robotic HIFU technology, we aim to provide women with a safe and effective treatment option that is significantly less invasive and less morbid in conventional surgical approaches.

As a reminder, our ongoing Phase 3 study is a comparative randomized double-blind clinical trial with the primary objective of evaluating acute pelvic pain levels in 60 patients. On February 1, we announced the completion of enrollment of the Phase 3 study. Considering the fact that the Phase 3 study included a sham-controlled arm, we are highly encouraged by the robust pace of enrollment, which we believe reflects a growing interest among patients and physicians to explore alternative treatment modalities beyond surgery. We expect to announce results from the Phase 3 study in the second half of 2024.

In November, we announced that EDAP entered into a clinical research collaboration with the prestigious Icahn School of Medicine at Mount Sinai Department of Urology in New York. The purpose of this collaboration is to accelerate the understanding of the role of immunotherapy treatment in conjunction with high intensity focused ultrasound in patients with prostate cancer.

Focal therapy using HIFU deliveries precise ablative energy to a targeted prostate lesion. Existing research shows HIFU treatment increases the body's immune response. More specifically, EDAP and Mount Sinai will study, whether HIFU in combination with immunotherapy can generate measurable oncologic results in patients with prostate cancer. The research has being supervised by an internationally recognized leader in the field, Professor Ashutosh Tewari, Chairman of the Department of Urology at the Icahn School of Medicine at Mount Sinai Health System.

I'll now briefly touch on the performance of our distribution business. In the fourth quarter, we sold 20 ExactVu systems, which is a quarterly record for system sales. The ExactVu micro-ultrasound platform enables urologists to perform precise targeted biopsies of the prostate within a standard urological workflow.

We believe US sales force realignment that went into effect several months ago, the supportive ExactVu is now having a positive effect on demand and the results in the fourth quarter reflect this progress. We also believe that the success of ExactVu offering will strengthen our position in the prostate cancer market and translate into greater visibility for the Focal One platform and help drive additional placements.

EDAP was very active through the quarter in attending several important scientific meeting. Focal One was a featured leading technology at the Focal 2023 meeting in Chicago. This meeting was attended by several hundred leading urologists from across the United States, who have a keen and active growing interest in advancing focal therapy for the treatment and management of prostate cancer.

Of note, Dr. Ruben Olivares from the Cleveland Clinic, who has performed approximately 500 Focal One HIFU procedures, presented a one-hour presentation titled, Initiating a Focal HIFU Program, based on Cleveland Clinic's successful experience in building a focal therapy program centered around the Focal One technology. Cleveland Clinic is recognized as one of the very top leading academic centers amongst leading urology hospitals in the United States.

Additionally, Focal One had a strong presence at the 24th Annual Meeting of the Society of Urologic Oncology, which was held from November 28 to December 1 in Washington, DC. The SUO is one of the largest gatherings of urologists who focus exclusively on the treatment of urologic cancers. EDAP's presence at the meeting was noteworthy as we were busy conducting numerous physician hands on test drives, highlighting the Focal One robotic technology.

The growing interest in our Focal One HIFU technology is clearly evident at these very important meetings. We are looking forward to attending the upcoming European Association of Urology meeting taking place next week in Paris, France and the American Urology Association meeting taking place in May in San Antonio, Texas. These are the two largest urology focused conferences in the world, and we expect to have our largest presence ever at both of these highly influential global medical meetings.

With respect to advancing the development of our Focal One technology for the management and treatment of endometriosis, Professor Gil Dubernard presented results from the Phase 2 multi-center study of robotic HIFU treatment of rectal endometriosis using Focal One on October 2, in a plenary session at the European Society for Gynecological Endoscopy Annual Congress.

The data was also selected as an oral presentation at the American Association of Gynecological Laparoscopists meeting in November, which is one of the largest global meetings focused on gynecological surgery with over 3,000 attendees. As I mentioned earlier, we are very excited about the progress we're making in this areas of women's healthcare, which provides EDAP with the opportunity and substantial unmet need. And we expect results from our ongoing endometriosis Phase 3 study in the second half of 2024.

I will now turn the call over to Ken to review our financial results for the fourth quarter.

Thanks, Ryan, and good morning, everyone. I will briefly review full year 2023 performance before getting into greater detail on our fourth quarter results. Please note that all figures, except for percentages are in euros. For conversion purposes, our average euro-dollar exchange rate was $1.0846 for the fourth quarter of 2023.

EDAP set a record for calendar year revenue in 2023. Total revenue for the full year was EUR60.4 million, an increase of 9.6% as compared to total revenue of EUR55.1 million for the full year 2022. The increase in revenue was due to higher sales of Focal One and ExactVu units versus the prior year. Notably, the HIFU division revenue grew 37.1% year over year, reflecting both an increased number of Focal One sales and procedure volumes. With respect to US Focal One procedures, the number of procedures increased 118% year over year.

Now I will review our fourth-quarter results. Total revenue for the fourth quarter of 2023 was also a quarterly record, coming in at EUR19.6 million, an increase of 24.8% as compared to total revenue of EUR15.7 million for the same period of 2022. The increase in revenue was due to higher sales of Focal One and ExactVu units versus the prior year period.

Looking at revenue by division, total revenue in the HIFU business for the fourth quarter of 2023 was EUR7.5 million as compared to EUR5.4 million for the fourth quarter of 2022. The increase was driven by 10 Focal One systems sold in the fourth quarter versus 7 systems sold in the fourth quarter of 2022. We also experienced 88.6% year-over-year growth in worldwide disposable-based revenues, reflecting strong procedure growth during the quarter.

Total revenue in the LITHO business for the fourth quarter of 2023 was EUR2.3 million, as compared to EUR3.6 million for the fourth quarter of 2022. The decrease in LITHO revenue was driven by three lithotripsy units sold in the fourth quarter as compared to 11 units sold in the fourth quarter of 2022.

Total revenue in the distribution business from the fourth quarter was EUR9.9 million as compared to EUR6.7 million for the fourth quarter of 2022. The increase in distribution revenue was driven primarily by 20 ExactVu units sold during the fourth quarter, as compared to 11 units sold during the fourth quarter of 2022.

Gross profit for the fourth quarter of 2023 was EUR8.6 million compared to EUR7.2 million for the year ago period. Gross profit margin on net sales was 43.7% in the fourth quarter of 2023 compared to 45.9% in the year-ago period. The decrease in gross profit margin year-over-year was primarily due to two main factors, higher level of distribution product revenues, which have a lower gross margin and our continued investments in our US field service and clinical application organizations to further support HIFU adoption and long-term revenue growth.

Operating expenses were EUR12 million for the fourth quarter compared to EUR8.8 million for the same period in 2022. The increase in operating expenses was primarily due to the continual build-out of the US team and commercial infrastructure, variable compensation and increased marking activities.

Operating loss in the fourth quarter was EUR3.5 million compared to an operating loss of EUR1.6 million in the fourth quarter of 2022. Excluding the impact on non-cash share-based compensation, operating loss for the fourth quarter would have been EUR1.8 million compared to an operating loss of EUR0.8 million in Q4 2022.

Net loss for the fourth quarter of 2023 was EUR5 million or EUR0.14 per diluted share, as compared to net loss of EUR5.1 million or EUR0.14 per diluted share in the year-ago period. Our ending inventory was EUR15.1 million in the fourth quarter as compared to EUR11.8 million at the end of the fourth quarter of 2022. Most of the growth in inventory was due to Focal One and ExactVu systems that we plan to revenue from the first half of 2024.

Total cash and cash equivalents at the end of the fourth quarter was EUR43.5 million as compared to EUR47.7 million at the end of the third quarter in 2023. This EUR4.2 million cash decrease was driven primarily by the cash used in operating activities in capital expenditures. We continue to monitor our cash flow closely, prudently balancing the need to invest and grow our business.

Those are our key financial highlights for the fourth quarter of 2023. And with that, I would like to turn the call back to Ryan.

Thanks, Ken. In summary, we are pleased with our fourth-quarter and full-year 2023 performance, and we are excited about the progress we expect to make throughout 2024. It is clear that the ongoing advances in both testing and diagnosis of prostate cancer has led to improvements in the ability to better risk stratify patients with their disease. With these advances, we believe the benefits of focal therapy along with the therapeutic utility afforded by Focal One robotic HIFU allows patients another treatment option for management of their cancer without the side effects of radical therapy.

Our technology is enabling patients to access a non-invasive, non-surgical procedure that provides excellent oncologic control, coupled with the potential for improved outcomes with respect to maintaining sexual function and urinary continence. Looking ahead, we expect our momentum to continue as the number of Focal One HIFU placements and procedures continue to grow.

With that, I will now turn the call back over to the operator for questions. Operator?

Thank you. (Operator Instructions)

Michael Sarcone, Jefferies.

Hey, good morning, and thanks for taking my questions. Just to start, do you think you can -- we're basically through first quarter this year. Can you talk about or give us any color on how activity has trended so far through this year, and what the sales funnel looks like?

Yeah. Hi, Michael. Well, again, coming off of 2023, we've rolled into 2024, and as noted, we continue to build our pipeline and continuing to see growth in adoption, both obviously in the US and outside the US. We can't really comment on anything too much beyond that, but I'd say we have good market momentum, a lot of great activity in play, and again, we're looking to continue to drive top-line growth, top line sales, and procedure adoption as referenced.

So again, we're excited. I know we're almost through first quarter, but we continue to make notable progress, and I think we're excited for the rest of the year.

All right. Thanks, Ryan. And then just on the capital equipment environment, you're pretty clear talking about -- the last time we got an update, no real change but a lot of the 4Q systems were just a result of the normal sales process running course. Could you just give us an update on what you're seeing in terms of hospitals' appetite for capital equipment?

Yeah. So I would say there's certainly an appetite and interest for disruptive capital equipment that is strategic in nature for the hospital. And as we've stated before, we sell a clinically necessary, strategic revenue enhancing service line in a very notable cancer space, prostate cancer. So again, some hospitals will see that opportunity and seize on it quickly in the beginning, others will take more time to go through their process, looking at economics and looking at the timing of making the investment.

We think we've got a very strong story and we know focal therapy has never been more prominent in the treatment of prostate cancer. And as noted, we have a technology with Focal One to lead in the category. However, we do see hospitals, obviously taking time to work through their processes, and we lead with a cash sale notably. And again, we work closely with them and alongside of them as they do pro forma analysis and other, and we believe we've got a really great story for them and focal therapies in play today.

So other than that, the cycle times will vary by hospital, by region, type of hospital sometimes, looking academic versus community. But yeah, I would just say hospitals are definitely spending more time to look and differentiate between operational capital expenses versus strategic capital investments. And we stay close with them in terms of interpreting our story back to them and we see that as part of our strategy as we look out through the rest of 2024 and beyond.

Okay, great. Thanks, Ryan. I'll just squeeze one more in. When you and Ken think about the business and the outlook, you're not providing guidance today. Where do you want to be in terms of the position of the business before you get more comfortable providing full-year guidance?

Yeah, Michael, I think again, we're early in the adoption curve for an exciting category. And again, I think when we see more kind of predictability and some of the key metrics, I think we'll be a lot more comfortable of being able to provide some type of outward guidance.

I think today, again, we're early in the market here and that's a time where there is some seasonality, call it, and some lumpiness in terms of when they buy capital, yes, no, what quarter. Our pipeline remains strong, we continue to grow procedures, and I think we'll just have to wait a little longer until we're comfortable.

Yeah. Michael, just to follow up, because we talk about this all the time, and we look back on last year's performance and the challenging environment we had in Q3, which we made up in Q4. That's just a good example of why we just need more time to really learn this business, to continue to invest and move up the adoption curve, as Ryan described. Because that's going to give us what we need to provide you guys better visibility in the business going forward.

Got it. Thank you both.

Thank you, Michael.

Frank Takkinen, Lake Street Capital Markets.

Great, thanks for taking the questions. Congrats on all the progress. And I'm going to also start with one, hopefully on expectations, at the risk of asking too much. But around placements, I think we're coming off a year where we did about 25 systems, if I'm looking at it correctly. 2022, I think, was high teens, so obviously, that's a good growth figure. One piece of commentary you did provide was definitely your anticipation to continue to grow. So maybe not thinking about it from a quarter-to-quarter basis but thinking on it from a year-to-year basis, my assumption is relatively robust growth in the system placement numbers.

Obviously, there's moving pieces between a sale and a placement, but is that a fair assumption, that we should see a fair growth number in the system placement expectation for 2024?

Yeah, Frank. Yes, absolutely. Clearly, our focus is selling systems. We do place systems, as notably and most of the time those are driven by the fact that hospitals are working toward their budget cycle and they want to start the program and they don't want to delay it. But they're using it as an opportunity for a bridge to purchase, or at operational lease with the goal of bridge to purchase. So again, we would expect growth as reference.

We continue to activate more hospitals in our pipeline and we continue to look at the procedure adoption which I think, is also fueling some of the growth as noted. And again, we're early in the market but certainly excited for a good performance here in 2024.

Okay, that's helpful. And then maybe shifting over to some general commentary around the onboarding process and utilization expectations. My assumption is some of these systems go in and then there's probably a process of weeks, months, or maybe quarters till that you're treating urologist is comfortable with the system. Maybe walk through the onboarding process, how long that typically takes and what kind of utilization metrics we can get to in -- at different goal posts, maybe 3 months, 6 months, 12 months?

Yeah. So the onboarding process, I'd say, first of all, we get better and better at this process, and I think part of that is we understand better how to launch the programs, and we sell programs. We also see hospitals starting to book patients sooner for treatment, even in advance of them actually purchasing or finalizing the purchase of the system. So that, that helps us ramp quicker.

We've got a training team and apps team that helps on the onboarding. And of course, our direct clinical sales team, they take an active role in that process. I think how we do it, how we deliver it has become more efficient. We'll continue to work on that, we do track metrics around this.

I think it's hard to give you a number of procedures in a period of time, but clearly the first few months tend to ramp at a different pace than the latter months. Because as they're looking for patients and patients can come into that favorable intermediate risk category, they may be starting their program with patients that have failed radiotherapy, so they may be looking at a different type of patient. But all in all, I think we've gotten better at the process. There is an onboarding metrics that we can kind of share internally.

We don't share procedure numbers today outside the company. But I think we're excited with the momentum in getting better at the onboarding process and in shortening the cycle times from the period when they get the technology into their facility and they start doing cases. And again, I think as we get better as a company, those onboarding processes improved in again, over and over. So yeah, that's what we can share with you. We're excited about how we do it today, but we're always looking for improvement to make that process better and better.

Okay, makes sense. I'll stop there. Thanks for taking the questions.

Thank you, Frank.

(Operator Instructions)

Ramakanth Swayampakula, H.C. Wainwright.

Thank you. Good morning, folks. So Ryan, I know you don't give the number of procedures, but just want to get a qualitative commentary from you in terms of how do you see the flow in terms of procedures once you have the new reimbursement in place starting from January 1, over the last three months? And also in terms of placements, do you see that the number of leads increasing post January 1 with the new reimbursement in place?

Yeah. So I think we had shared on the call in RK -- one of the things that we looked at, obviously, is the reimbursement continued on in January. We maintained an APC Level 6 status within CMS. There was a little increase too, a couple hundred dollars at the facility level. That's always good. I mean, I think for the hospitals, again, this is all about providing patient access.

So when we work with those hospitals, which is common, we look at the pro forma analysis, look at reimbursement, which may be very specific to their area. As you know, there's a calculation, as I referenced in my comments, that there's an average number, but it may be higher, it's based on a facility point of care because that takes into consideration the wage labor index for that facility. That's an average number I shared.

So the reimbursement has been very favorable. That really helps when hospitals are looking to make the investment. They obviously want to look at the economics because we are a new service line, and we fare well in that process. I think, again, maintaining our APC Level 6, effective January 1, helps us to continue on the pathway we're on, hospitals make continued to investments, they look at the technology, they look at the opportunity to move first in the market as it relates to focal therapy, in many hospitals want to take advantage and do first mover in their markets. So not unlike other technologies or other service lines when they're early in their adoption.

In terms of procedure impact, again, I think it certainly helps on the procedure side, but I think more importantly as we place more and more systems, we create a higher level of patient awareness, which should lead to more or increased patient demand. And if we can continue on that pathway, our plan obviously, is to do more procedures per system, so each facility performing more procedures as we ramp these programs. And that's over time creating more demand in the market for other hospitals to make the necessary investment in starting a Focal One program.

Thank you for that. You talked about how the Swiss reimbursement has helped get a sale in Switzerland, and you're expecting similar things to happen in France. Are there any other geographies that could also help increase placement throughout '24? And then a question on endometriosis. I understand the data is going to be coming out in '24, in the second half. In terms of filing, what else needs to be done? And potentially when could you file on this?

Yeah. So RK, a couple of -- let me try to answer those questions. So when you first talked about markets, we received reimbursement, in Switzerland, July of last year. So the Thun placement, Hohmad Klinik was a notable win coming off reimbursement. We see more opportunity in Switzerland, we have placements in other hospitals in Switzerland. So we want to take advantage of that.

As far as France, and I would say, another market as noted, is the HAS recommendation from the French authorities, they are going through their review process to come back in reference to reimbursement. We hope to hear something sometime later this year. We're not sure yet. We're standing by, as noted. And so it's going to be important for us to recognize what that reimbursement is and activate on that.

Changing over to endometriosis, again, the study data, as noted from the Phase 3 study, we completed patient enrollment at the end of January. We made a notable press release regarding that. We expect to have data to share in the second half of this year, as we discussed. But more importantly, I think as you were talking toward the end, about our breakthrough designation with the FDA, that allows us the ability to move faster in the conversations back and forth with the FDA.

So our goal there is looking at a data plan that's acceptable for the standards of the FDA and be able to work as quickly as we can through that process. I cannot give a timeline right now because we're so early in the process, but the good news is we have a fast-track process in place to be able to interact with the FDA through getting a clearance at some near future date. So again, we'll continue to provide updates on an ongoing basis as we get closer to some milestones in receiving that clearance. And that's kind of where we are.

Thanks for taking the questions.

Thank you, RK.

Thank you. At this time, I'm showing no other questions. I'll turn the floor back to, Mr. Rhodes for final comments.

I want to again thank everyone for joining us on today's call. We look forward to providing another update for everyone on our first quarter 2024 results in May. Again, thank you.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.