MiMedx Group Inc (MDXG) 2020 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the MiMedx Third Quarter 2020 Financial Results Conference Call.

(Operator Instructions)

I would now like to hand the conference over to your speaker today, Hilary Dixon of MiMedx.

Thank you.

Please go ahead, madam.

Thank you, operator. And welcome to today's conference call to discuss our third quarter 2020 financial results. With me today are Tim Wright, Chief Executive Officer and Pete Carlson, Chief Financial Officer.

Additional members of senior management will also be available to answer your question.

Before we begin, as a reminder, the company's common stock commenced trading on the NASDAQ stock market, at the start of trading yesterday, November 4th, 2020, under the ticker symbol MDXG.

Also, on October 15th, we filed our definitive proxy statement and announced that we will hold our 2020 Annual Meeting of shareholders on November 20th, 2020 at 10AM Eastern time in a virtual only format.

The press release reviewing our third quarter 2020 financial results was issued yesterday, November 4th and is available on our website.

I'd like to remind you that remarks made during today's call include forward looking statements that are subject to risks and uncertainty. Actual results may differ materially. We describe some of those factors in our risk factors section of our 2019 annual report on form 10-K and the second quarter 2020 quarterly report on form 10-Q.

This call will also include references to certain non-GAAP financial measures. We provide reconciliations of those measures to the most comparable GAAP measures in the earnings press release on the Investor Relations portion of our website at www.mimedx.com.

With that, I'm pleased to turn the call over to MiMedx Chief Executive Officer, Tim Wright.

Thank you, Hilary. Good morning, everyone, thank you for joining us this morning. The third quarter was a period of significant progress for MiMedx as we continue to execute on our strategy.

I'm pleased with the many accomplishments in all areas of our business, including R&D, supply chain and operations and commercial operations.

Moreover, we continue to make meaningful difference in the lives of patients and families suffering from chronic unhealed wounds. We've remained at the forefront of patient care and treatment, and now, with an established, seasoned executive team in place we will -- we are well positioned to make deeper advancements in the large and expanding wound care market.

On today's call, I plan to recap key recent milestones, share highlights of our third quarter results, and reiterate areas where we are investing in the business to drive near term and long term results.

I do want to express my deep appreciation to our 700 plus employees and their families for their incredible ongoing commitment and dedication to MiMedx.

I'm exceptionally proud of our team's performance in Q3 and for their perseverance over the last eight months, as we weathered the unprecedented COVID pandemic together and with our customers.

It must be noted, we're still in the pandemic, so we must remain vigilant.

Some of our (inaudible) efforts have been complicated by COVID, but that has not deterred our focus on the fundamental business objectives to restore our financial integrity and our reputation, build out our -- a cohesive and capable management team, [back to my -- the core business] and to continue to advance our muscular skeletal pipeline and strategically address any headwinds we may encounter.

Our performance this quarter resulted in a strong rebround -- rebound in sequential sales growth, with a 22% increase over prior quarter.

Since the onset of COVID in March, we mobilized to ensure continued access to our product -- products for patients and their families, protect the health and safety of our own people, our most precious resource, maintain a product safety profile that we must continue to remain vigilant on. This is an area that I'm very proud of.

Since the inception, the company has distributed more than 2 million allografts. We've recovered more than 75,000 placentas. [And] we've done all this and maintained a reported events average of .01%. These are impressive statistics, and again, I'd like to thank the team for their commitment to quality and product integrity.

Seeing access to accounts improve has been a major hallmark of the business, and yes, we are looking at this as a potential rebound to begin to normalize our field personnel in their accounts.

Overall, the business is operating efficiently.

Over the past year, we built a capability and cohesive leadership team with industry [donating] expertise. We [made] two critical hires in the third quarter, Dr. Rohit Kashyap, who's our Chief Commercial Officer and Dr. Bob Stein, who leads our Research and Development efforts.

Approximately 90% of our senior leadership team is new. Others, high performance individuals have been put in new leadership positions with increasing responsibility. We have a talented and dedicated employee base. I can say with confidence, that we're working to systematically transform the business.

I'd like to take a few minutes to recap some of the recent announcements that we've made.

First, I'm exceptionally excited to reiterate that our common stock commenced trading yesterday November 4th. This is a momentous occasion for us and represents a significant transformation for the business, not only for the business and our employees, but also our shareholders.

Obviously, this improves our trading liquidity, allows us to [have] more interaction with the financial community and strengthens our ability to execute on our strategic objectives. I again, want to congratulate the entire MiMedx organization and also thank our shareholders for their ongoing support.

Second, earlier this week, we announced the addition of coverage for EpiFix. Now, as many of you know, EpiFix is our flagship [amnion corion] brand. This product was placed on the formulary of the largest US commercial payer, as a proven and medically necessary option in the treatment of diabetic foot ulcers. Coverage will begin December 1st.

Recently, we outlined key growth drivers for our core business, and this additional coverage supports the tactics that we have outlined, including highlighting the clinical and economic value of our -- of our core portfolio and expanding patient and healthcare providers access to our products.

We believe that EpiFix is the only [amniotic membrane] product to receive coverage under this payer's updated commercial medical policy.

We expect the payer's decision will be an important competitive advantage over time from MiMedx, as it facilitates access to EpiFix [in a] growing market for diabetic foot ulcers. It's an important validation and demonstration of the strength of our clinical data in the [skin substitute] market. And it also recognizes the significant differentiated value of our portfolio.

We'll continue to inform decision makers and payers and providers and help elevate the standard of care for millions of patients.

Let me take a moment to just highlight the Agency for Healthcare Research and Quality data. As you know, this was published in February of 2020. As I [noticed] previously, this independent report was intended to help healthcare decision makers, whether it be patients or clinicians, healthcare system leaders, policy makers (inaudible) make well informed decisions and thereby improve the quality of healthcare services.

I believe the report accomplished this objective and served as a critical validation of our clinical evidence, and is one of the key factors leading to the attainment of the additional coverage by the US's largest payer.

The findings of the AHRQ report noted that MiMedx -- MiMedx's products (inaudible) [have] statistically significant results [in that we were conducted] in randomized controlled [trialed way] against many applications. Additionally, there was a head to head study that resulted in [superiority play] for us.

These studies also demonstrated a low risk of bias. As indicated, this report serves to inform payers and key decision makers. There is no other [amniotic] product that has received coverage by this payer.

It's important to note that [more clinical] evidence will be needed in the future, and we're very committed to this. This is clearly in line with our strategy to generate a body of evidence that can be peer reviewed.

[And] this September, we've launched the new EpiCord expandable product line. And it's the largest advancement in our portfolio of products. At the core of this technology is EpiCord, which has a demonstrated clinical efficacy in the treatment of diabetic foot ulcers.

This product has the ability to expand to two extra size and offers a cost effective way to treat larger wounds in differentiated wound services, including uneven wound surfaces and deeper wounds.

The result of our internal product development efforts have been impressive. We're going to continue to develop meaningful products to provide our sales force the ability to sell these products in the areas of unmet need. But also with this product, we're seeing utilization across a number of size [of types of] wounds.

Once the wound has closed or starting to heal, the physician or the podiatrist can transition to our basic EpiCord or EpiFix products. This is a nice continuity of care that we've been able to take advantage of.

This innovation importantly is open access to other customers. It gives our sales force the opportunity to target new accounts and new care settings. Feedback from the [launch] has been very positive. We plan to highlight this at the Symposium on Advanced Wound Care this week through November 6th.

As a pioneer in the development of placental tissue technology, MiMedx is constantly improving our knowledge of placenta science and we're committed to continuous innovation.

Now, earlier in this quarter, we outlined four key growth drivers, for our existing core business, we expect to enhance the portfolio value by continuing to highlight our clinical and economic value of our portfolio. By this, we can also expand our market into new applications.

From an expansion standpoint, we're targeting new business opportunities, and in a controlled fashion, pursuing international expansion.

The accomplishments I've noted above contribute to these growth factors, and I'd like to highlight some specific -- some specifics across three domains of value creation for our company, number one commercial, number two R&D, number three [is] supply chain and operations.

In our commercial organization led by [Dr. Kashay], we -- as we previously noted, we're starting to begin the [key account stabilize] -- we're very conscientious that the pandemic isn't over, so we remain vigilant around this.

I believe our recent accomplishments and our tactics to grow our business are working. We plan to leverage our commercial sales to operationalize the [pull through] of the recent contract wins we've had and payer wins [we've] had.

While we expect the impact of additional payer coverage to be modest as we first ramp up, our field reimbursement managers, our medical payers organization and our market access teams are well positioned to support our [field sales efforts in this effort].

Growth will come from key initiatives including exceptional execution by our sales organization, investments in medical application, for example [key opinion speaker programs] as well as science (inaudible) and (inaudible) by our health policy team.

Our sales force guys and productivity are key elements in this strategy as well, and a pronounced engagement at important meetings [will be] important.

Putting the right people in the right places will ensure that we have access to market demand. We will scale our efforts appropriately to address the clinical need across a variety of care settings in a wide range of applications.

Now, let me transition to R&D, this is led by Dr. Stein. We're investing in medical education to support our current sales force [global objectives]. We will highlight our clinical and economic evidence of our portfolio of products, which is substantial. We will drive disease state awareness across the care continuum, and we'll continue to support our publication strategy, whether that be on the safety and efficacy of our products or their economic value.

We will use these tactics to expand the leverage to market. Our increasing -- our research efforts are focused across our portfolio of currently marketed products today, as well as to support our [BLA] submissions in the future.

As you know, we've recently announced we completed enrollment of our [PF Phase 3] trial in our [knee ulcer arthritis] Phase 2 [B] trial. We'll continue to update you on the progress of these important [lifeline assets] that we have.

Now, in our manufacturing area, one thing where we do feel we have a competitive advantage is the vertical integration of our supply chain and our operations. We must use this to leverage our [breath to maintain our business] operations and our quality standards.

Our vertical integration was particularly helpful in the beginning of our pandemic with COVID. Our ability to scale our donation network and our recovery network was absolutely essential during the process as some hospitals began to shut down.

Our -- as you know, we have the largest placental network and recovery network in this industry. During the pandemic and ongoing, we still continue to have a very high (inaudible) rate.

I'm pleased to share [and] also [it's a] very important relative to our [BLAs] that we're on track for our -- for our [GMP] facility. This [positions us] to benefit, not only in the support of our [BLA] products, but also benefits us long term with a favorable cost profile, control over our manufacturing process and allows us to ensure (inaudible) [all these] controls.

In summary, we're gaining momentum, we're seeing our access to accounts begin to stabilize, [with more normal] looking financial and operational metrics and feel that we're in a position to run the business [for growth].

We continue to realize operating efficiencies as we streamline processes, align product strategies and focus on key [core] priorities. And we're investing in the business, and we believe the initiatives that we've outlined position us well to leverage our recent wins, specifically with [fairer] coverage and with our new product innovation -- mainly EpiCord expandable.

At this point, I'd like to turn the call over to Pete to review the specifics of our financial performance.

Thank you, Tim. And good morning, everyone.

Today, I will discuss our third quarter results, which demonstrate improvement in our business and recovery from the soft second quarter, our cash position and some upcoming activities.

We are pleased to have completed a strong day of trading on the NASDAQ stock market and are excited for the increased liquidity this brings to our shareholders.

Our third quarter results reflect positive momentum for revenues on a sequential basis, however as I have discussed before, I need to clarify the impact of the company's transition in revenue recognition methodology on our reported results.

Net sales for the third quarter of 2020 were $64.3 million, primarily recognized on an as shipped basis. Included in this amount is $1 million of cash collected related to sales made prior to the revenue recognition transition. We refer to these as the remaining contracts.

Net sales for the third quarter of 2019 were $88.9 million, primarily recognized on a cash receipt basis. Included in this amount is a benefit of $21.4 million, resulting from the transition in revenue recognition that occurred in that period.

Adjusted net sales, which excludes impacts of the company's transition in revenue recognition and cash collected on those remaining contracts were $63.3 million in the third quarter of 2020, a decrease of 6.2% from the third quarter of 2016.

Cash collections in the third quarter of 2019 were higher than shipments in that period.

On an as shipped basis, revenue between the two periods was relatively consistent.

Further, adjusted net sales in the third quarter of 2020 represented an increase of 22% over the second quarter of 2020, which was significantly impacted by restricted access and other limitations caused by the pandemic. While we are very optimistic, I would caution you that we are still in the midst of the pandemic and we are cautious in attributing these recent sales [trends].

We do know that chronic non-healing wounds are not getting better without treatment.

Sales in the latter part of the year are usually stronger simply due to how individuals manage their personal insurance reimbursement.

Also, COVID makes it difficult to predict future revenues because its impact has been varied at different times and in different places, and if we or our customers suffer from another COVID outbreak or access restrictions, then future sales and profitability could be impacted.

We're focused on growing our business, and Tim mentioned some of the strategies and tactics to do that. That being said, the sequential recovery seen in the third quarter is a reflection of hard work across the company, particularly throughout our commercial organization. I appreciate the support and dedication across the entire MiMedx team to support our physician customers to help us make a difference for patients and their families.

Gross margin in the third quarter of 2020 was 84.0%, compared to 85.1% in the third quarter of 2019. Excluding the impact of the transition in revenue recognition, gross margin in the current period was 84.0% compared to 84.8% for the year ago period.

This decrease is primarily a result of the higher quality standards of current good manufacturing practices and lower production yields.

Selling, general and administrative expenses for the third quarter of 2020 were 48.0 million, for a decrease of 6.3% compared to the third quarter of 2019. This decrease was driven, in part by lower expenses related to travel restrictions implemented by the company, reduced severance expenses and the result of fewer legal, consulting and accounting expenses [excluses] of those reported in investigation [restatements] and related expenses.

Investigations [restatements] and related expenses for the third quarter of 2020 were $12.0 million, consisting with costs incurred under indemnification agreements with the company's former management and directors and the resolution of certain legal matters involving the company.

In the year ago period, these totaled $7.2 million and consisted of legal and restatements expenses.

Going forward, these costs will be unpredictable as they will consist of expenses for legal matters involving the company, including resolution of matters and costs incurred under the indemnification agreements.

Management continues to make good progress in resolving open matters and the notes to the financial statements in this quarter's 10-Q provide the latest updates.

Research and development expenses were $3.4 million for the third quarter of 2020, compared to $2.7 million for the third quarter of 2019. Consulting fees related to the company's clinical research efforts drove this increase.

As Tim noted, we completed enrollment in our two key active trials during the quarter. The company expects these costs to increase over time as we invest in additional, clinical and scientific research, including clinical efficacy and economic data, internal product development and preclinical research supportive of future growth objectives.

Turning to the bottom line, net loss in the third quarter of 2020 was $19.4 million and reflected the investigation restatement and related expenses of $12 million, along with the $8.2 million loss on extinguishment of debt early in the quarter.

This compares to net income of $12.4 million in the third quarter of 2019 -- that included a net benefit of $18.6 million related to the transition and the company's revenue recognition methodology and $7.2 million of investigation restatements and related expenses.

Adjusted EBITDA was $6.9 million in the third quarter of 2020 [or 10/20%] of net sales, compared to $7.6 million in the third quarter of 2019 or 8.5% of net sales.

The current period amount is 11.0% of adjusted net sales, compared to 11.2% of adjusted net sales in the prior year period, as the benefit from cost management efforts offset a higher level of R&D spending.

By adapting to the current environment, we continue to manage our costs well and we'll remain prudent in our spending. The business is operating efficiently, and we continue to review and refine your efforts to ensure effective product support and service for our customers and access to our solutions for patients and families.

Now, let me review our cash position, as of September 30th, 2020, the company had approximately between $109.6 million of cash and cash equivalents, compared to $69.1 million as of December 31st, 2019.

Cash and cash equivalents net of debt were $62.0 million at September, 2020, compared to $3.4 million at December 31st, 2019. Our healthy cash position gives us the financial flexibility to invest in initiatives that strengthen our core business and to pursue new growth opportunities, including our late stage pipeline, targeted to address unmet patient needs, while also addressing remaining legal contingencies.

Finally, as you expect, we are continuing our [other] outreach efforts and dialog with investors and analysts. Another (inaudible) of our NASDAQ listing is the increased opportunity to participate in industry conferences and we will give you the customary advanced notification of specific events.

We are looking forward to the upcoming 2020 Annual Meeting of Shareholders on November 20th.

At this time, we will now take your question. Operator, you may open the line for questions.

Thank you.

(Operator Instructions)

And our first question comes from [Iad Ashari] from [Free Science Point]. Your line is now open.

Hey, guys, thanks for taking my question. As you know, current treatments for [knee OA] such as cortisone injections and [HA] injections, they're [of questionable] efficacy and in the case of cortisone, can cause accelerated degeneration of knee cartilage.

Our research indicates that AmnioFix is a superior and safer treatment for [knee OA] than both cortisone and [HA] injections, and as such, we think that AmnioFix will likely gain FDA approval and eventually become a widely used potentially front line treatment for [knee OA].

If we're correct, then this could mean that AmnioFix's potential revenue for the [knee OA] indication alone could amount to well north of $1 billion, do you believe that our assessment of the market potential for AmnioFix is realistic? And why or why not?

Yes, this is Tim, thank you for your comments and your questions. Certainly, the AmnioFix injectible for [knee OA] could be an important contribution to the treat -- to other treatment modalities. Certainly non-steroidals, [hyaluronic] acids, steroids, even the current modalities that are being studied in the clinic like [anti AGF] (inaudible) inhibitors, these -- all these therapies have their own limitations.

One of our main goals in our Phase 3 clinical trials is to demonstrate the -- obviously the clinical efficacy but also the safety of [amniotic] tissue. So, we do -- we do feel there is a promising value creator here for the business.

I'd like to have Bob Stein just provide his comments on this as well, and then we'll address your -- comment around the potential size of the market and so on.

Thank you, Tim. Thank you, [Iad]. I do believe that our AmnioFix injectible product is having very powerful impact [to] pain and function in [knee osteo arthritis]. Earlier studies by Dr. [Alden] have supported that and our ongoing study looks very promising at this stage.

We were able to enroll the entire intended patient population into that study a little bit early, and the reason for that, even in the face of COVID and slowed down enrollment for a while, is that our dropout rate is much lower than we had anticipated.

Our study was designed for a anticipated 10% dropout rate and our actual dropout rate's only been 3%. And that allowed us to accrue the number of patients we believe we need to see a statistically and clinically significant difference in a slightly smaller sample size.

It's a pretty good size study though, it's over 460 patients that have been enrolled, and the blinded endpoints will be available in the second quarter of next year, and the 12 month blinded observation period will be completed before the end of the year.

So, that's going to allow us to start to have dialog with the FDA under the regenerative medicine advanced therapy designation, and to begin to plan our phase 3 study, so we're quite enthusiastic about it as an intervention and there will be additional data that will -- you know, describe at the appropriate time, although not in the first part of the six month observation, but after we've had an appropriate opportunity to vet it internally and have discussions with the FDA.

Thank you, Bob, and [Iad], just going back to -- if you think about the size of the [knee osteo arthritis] market that [you're referring] to, [I believe] we've stated before, that the market is significant. I think everyone knows that.

There are over 242 million patients worldwide suffering with symptomatic OA of the knee and the hip. Even if you cut that tin half, it's a significant opportunity for us as we drill down on the -- if you will, the epidemiology.

We're not quite ready to fully characterize the total addressable market, but as we work through over the next [month], we've placed a lot of effort in, if you will, characterizing this market. I appreciate (inaudible) [points] deep, deep diligence in this particular area and look forward to speaking to you more about [this].

Thank you very much, Tim. And one more question, you mentioned -- and -- during your introductory comments, some contract wins, are you open to providing any details about those contact wins?

I would love to, but I don't [think] it's appropriate [at this time]. We have been very successful in contract wins. This is part of our -- really part of our growth strategy. I also would like to note that -- [and once] again, the largest US commercial payer is provide -- will be providing coverage for our product on December 1st for EpiFix.

This is an important accomplishment for the organization. There's no other amniotic based tissue on the market today that has the benefit of this coverage. I believe it benefits the payer, it benefits the patients and it benefits the company.

So, [Iad], we're executing against the [need] to grow our core business. We're also executing under the leadership of Bob Stein, our Phase 2 B, Phase 3 trials in the muscular skeletal area, which in the future, I would like to be able to be in a position to provide a very robust update.

Thank you very much.

Thank you, [Iad].

Thank you.

(Operator Instructions)

And our next question comes from [Ernie Enberg], [shareholder]. Your line is now open.

Thank you so much taking my question. In reference to the win with the large commercial carrier, you indicated that you intend to start to expand the sales force. While you've given us an idea of total employees, can you help us understand where you are in terms of [court appearing salesmen], [and then] (inaudible) sales reps and how -- what the expansion plans mean?

[Ernie], thank you for your question and having a large and growing sales force is an important part of our [tactics], so you have a -- are focused on a good topic there. We have not been updating externally, the count of our sales representatives during the year. We did in the -- the last number we talked about, just because it's out there was that there were 285 sales professionals as of the end of last year, December of 2019.

We do recognize the need to increase our field forces, and as Tim said we are focused on having the right people in the right places, as we put the resources out to distribute our product.

So, we -- while we don't have the quantification and are not sharing that at this time, rest assured that we are always focused on resources we have in the field distributing the product.

And I also would go back to another thing Tim said about the resources around those sales representatives, with our medical liaison, our market access, our reimbursement resources, all are helping get the word out and facilitate the transactions with our customers.

Thank you.

Thank you.

The investigation expenses, the character of the expenses in the last quarter, it looks like they've changed significant and Pete said that he couldn't specifically talk going forward [and they'll be] variable, do you have any limits on the contracted -- contractual reimbursement you [have for foreign management]? Or I that open ended?

[Ernie] -- [yes], [Ernie], you are correct in our -- in the characterization. We have [hit a] transition in [those overall activities] as you noted that at the end of the second quarter, with the filling of the 2019 10-K, we created -- we completed our restatement activities.

The investigation that's referenced in that line item was completed in 2019. And as you know, the indemnification payments are one of the large -- or a component of the current spending.

Those agreements are not limited, so we are not able to put a cap on that. I would just note that the agreements do provide the opportunity to seek reimbursement for expenses that have been advanced and fees paid for -- in case the individual covered has the final ruling of guilt against them.

Thank you. Just one other one, in terms of contract, when you -- you've talked about for [EFUs], how does that (inaudible) an additional wins that you talked about here on the call, how does that get you in terms of covered [lies] in the area? And are there still significant wins to be gotten there?

It's a great question. (inaudible) I'd like Rohit to take that question and certainly I agree with you. MiMedx has always enjoyed commercial payer coverage along with Medicare coverage. This coverage with one of the largest carriers is very significant for us, so Rohit?

Yes, good morning, and it's an excellent question, because it's [an -- I'm very] excited about the [opportunity] with the largest payer, expanding our reach further.

One of the areas that we focus on is -- you have [covered lies] and then you have covered indications, right, so as we develop clinical data, as we have discussions, as we prove our value to the payers, one of the things that we continue to do is not just expand into more [covered lies] but expand in to more indications, so if you have [DFU], can you add [VLU]? If you have [DFU] and [VLU], can you expand to wounds from head to toe?

So, that continues to be a priority but I would emphasize again, it validates the -- the coverage validates the strength of our clinical data as Tim and Pete have highlighted, we believe we are the only amniotic based tissue with this payer, that's [what] we have this coverage, so very excited to get started organizing in order to capture that opportunity.

We expect there will be some [money experience] for both us and them as we go through this [in the] initial phase but we are excited about a substantial opportunity for our business as we go forward. And we'll continue to leverage our clinical data to expand indications as well.

Thank you.

And, [Ernie], it's -- yes, [Ernie], it's Pete Carlson, thank you for your question. What I would [know], relative to covered [lives] is with this, we're well over 300 million in covered [lives] ...

[Thank you].

... (inaudible).

Thank you. Thank you.

Thank you.

And our next question comes from Brian Finn from Fin Capital. Your line is now open.

Hey, guys congrats on some of the recent wins here with some of [these insurers], I just had two questions. The first question was on kind of [quarter to date], if you guys can give any commentary on -- you know, Q4 sales?

And then on -- you know, on the commercial side, you guys are very dominant in some geographies and other geographies you have less of a presence, wanted to kind of understand sort of how Rohit is addressing that going forward here and kind of what the plans are to get more reps in certain areas?

Brian, thank you for the comment on the quarter and the -- I'll start with the first question and Rohit can add his thoughts about [that] -- about the quarter to date and then get -- as you say, get into the geographies and the right places that Tim talked about.

We haven't talked externally and don't plan to at this point talk about sales on an interim basis during the quarter.

You know, as Tim talked about and I mentioned, we are seeing -- beginning to see things stabilize, but we also know that we're in uncertain times, you know, we've seen shutdowns occur outside the US and we just -- we don't know where things are going to go here in the US, but again, I would -- I would go back to the beginning to see stabilization and accounts and access, and I'll let Rohit give his added thoughts on that.

Thanks, Peter, that's an excellent question, because we ask that question of ourselves also every day, in terms of business stabilization and progress. We continue to see some -- a substantial recovery, but there's still some -- (inaudible) it shifts around [and then during] the course of the quarter and we continue to expect [to start seeing] some of that as we go forward.

As to the (inaudible) operations and the -- and the [patient access] to therapies (inaudible) we are -- and then also our access to those facilities, whether it be a wound care (inaudible) private office [or a] hospital it is sometimes essential.

I'm very proud of -- that we have been nimble, especially over the last quarter to adjust our tactics and strategies to be able to provide the support that we need for our customer and also educate our customer with the virtual class [times] that [we've begin leverage to do that].

As far as the geography distribution of sales people is concerned, as Tim has mentioned, we want to put the right people at the right place, and that's kind of suggesting what you just call out.

The way we think about [how we would people] is based on our current sales -- the future potential or the untapped potential that we have, and also accessibility. So -- but if there's a stage or a -- or a place where there's a huge amount of potential to (inaudible) access to that [based] on the facilities that exist there, based on the payer contracts because some payers can be a significant player in a market based on local presence and things like that.

So, we take all of those factors into account (inaudible) [I start] doing that process right now and making sure that we have the people placed in the -- in the right markets to address the gross potential that exists for therapy and making sure that patients throughout the country have access to our therapy.

Cool. Thank you, guys.

Thank you, Brian.

And thank you.

I would now like to turn the call back over to Tim Wright for closing remarks.

Well, thank you for joining us on the call today. We've accomplished a tremendous amount over the past year, culminating into yesterday's relisting on NASDAQ. It's clearly an important milestone for our employees and your shareholders.

Additionally, we continue to increase our engagement with the financial community and we'll be participating in a number of healthcare investor conferences over the coming months.

With a leading platform and growing body of evidence in clinical research, we are definitely focused on operationalizing our strategy. We feel we're well positioned for the future.

In addition to the comments Rohit made on our sales organization, I wanted to just add to that to build on top of that, our strong market access team, they've been able to deliver on contracts and on payer coverage -- very important, our medical education team -- Rohit is very focused on building out our medical education support or our sales reps in all of our geographic territories.

So, on behalf of the entire MiMedx team, thank you for your continued support and commitment to MiMedx. As always, I welcome your questions and feedback and look forward to engaging you more in the future.

Operator, you may close the call.

Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.