Myomo Inc (MYO) 2021 Q2 法說會逐字稿

Good day, and welcome to the Myomo Second Quarter 2021 Financial Results Conference Call. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Kim Golodetz with LHA. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to the Myomo Second Quarter 2021 Financial Results Conference Call. Earlier today, Myomo issued a news release announcing financial results for the 3 months ended June 30, 2021. If you would like to be added to the company's e-mail distribution list to receive future announcements, please register on the company's website at myomo.com or call LHA in New York at (212) 838-3777 and speak with Carolyn Curran. With me on today's call from Myomo are Paul Gudonis, Chief Executive Officer; and Dave Henry, Chief Financial Officer.

Before we begin, I'd like to caution listeners that statements made during this conference call by management other than historical facts are forward-looking statements. The words anticipate, believe, estimate, expect, intend, guidance, outlook, confidence, target, project and other similar expressions are typically used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to certain risks and uncertainties and other factors that may affect Myomo's business, financial condition and operating results, including the impact of the ongoing COVID-19 pandemic.

These and additional risks, uncertainties and other factors are discussed in the risk factors and other qualifications contained in Myomo's filings with the Securities and Exchange Commission, including the Form 10-Q for the quarter ended June 30, 2021, which was filed earlier this afternoon. Actual outcomes and results may differ materially from what's expressed in or implied by these forward-looking statements. Except as required by law, Myomo undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call.

It is now my pleasure to turn the call over to Paul Gudonis, CEO of Myomo. Paul, please go ahead.

Thank you, Kim. Good afternoon, everyone, and thank you for joining us today. After I provide a business update, Dave will review our second quarter financial results and discuss our financial outlook. And following the financial update, I'll give some closing remarks, and then we'll take your questions.

As the second quarter began, it was heartening to see the large number of vaccinations and the significant drop in the number of COVID-19 cases in the U.S. And unlike a year ago, our operations have returned to a more normal pre-pandemic environment. Product deliveries are up significantly from this time a year ago, and our staff is able to gather in person once again to work in our new offices in Boston, while others continue to work remotely or in a hybrid mode. We're hopeful that the recent surge in cases will soon be under control, and we expect that our business will continue to operate without disruption.

Our overarching goal as a company is to improve the lives of people with upper limb paralysis. At the same time, our focus is on increasing MyoPro sales and benefiting from operating leverage as we scale the business towards cash flow breakeven. We recognized revenue on 80 units during the second quarter, up 233% from the pandemic-constrained period a year ago and up 23% sequentially from Q1. More importantly, the number of authorizations and orders were a record 138 MyoPros, which is more than double the number in Q1 and represents nearly $5 million in potential revenue, which will be recorded as these orders are delivered and the insurance payments are received.

As a result of the growth in these key metrics, we're reporting revenues for the quarter of $3.1 million, more than triple last year's Q2 and up 33% sequentially. The factors driving this growth include the following: a large number of patient candidates in our pipeline as we started the year with more than 700 patients in the insurance authorization process; increased direct-to-patient marketing, which led to a record number of interested candidates in Q1 and over 650 in total in the first 6 months of the year; greater success in obtaining insurance authorizations for patients with approvals from a growing number of payers; and revenue growth in our international operations, especially Germany, where more statutory health insurance payers are covering the cost of the MyoPro.

Our channel strategy is 3-pronged. First, it consists of our own direct billing operations where we bill insurers directly and provision the MyoPro with our own clinical staff. Second, we also support orthotics and prosthetics providers in the U.S. and international markets who source their own MyoPro candidates and are responsible for provisioning and billing. And third, we're focused on VA medical centers for veterans and their care.

During the second quarter, revenue from the direct billing channel represented 74% of total revenue compared with 49% a year ago. Our gross margin has also improved with this emphasis on the direct billing approach, as Dave Henry will describe in a moment.

Backlog is defined as MyoPros that have been authorized by payers but are either in the process of being delivered to users or are awaiting payment to us, and our backlog increased to 160 units at quarter end. This is up from 118 units at the end of Q1, reflecting the large number of insurance authorizations received during the quarter and representing patients who are in the queue to receive their MyoPros.

After the very strong growth in the patient pipeline in Q1, we added 277 new candidates in Q2 and had an ending pipeline of 898 patients as of June 30.

We use social media platforms and search engine marketing to inform paralyzed individuals and their families about the benefits of the MyoPro. At the beginning of the quarter, we did feel the impact of the Apple versus Facebook privacy war on our lead generation. As you may be aware, Apple implemented new software features in its iPhone operating system to reduce the amount of web tracking that is conducted by Facebook and other platforms. Facebook, for example, relies on data about where users are going on the Internet for medical information, et cetera, to enable advertisers like Myomo to better target their intended audience.

So we adjusted our marketing strategies to this change, working with our advertising agency to develop other means of reaching potential candidates and also increasing our ad spending to expand our reach. As a result of these changes, our weekly lead generation is back up to where it was in the first quarter when we had very strong growth in new candidates.

We work with patients in the pipeline to obtain a MyoPro prescription and supporting clinical documentation from their physician. It typically takes several months for these candidates to work their way through the insurance process through an authorization and eventual delivery and payment. Also expect that between 10% and 20% of pipeline patients drop out each quarter due to personal patient issues and/or a lack of insurance approval, and so we take this into account in our planning.

Since HCPCS codes for the MyoPro were issued in 2019, we've seen an increase in patient access to our devices with more payers covering the MyoPro on a case-by-case basis for their beneficiaries. And in particular, we've experienced strong growth among Medicare Advantage Plans covering the MyoPro. The huge increase in insurance authorizations in the quarter is also due to our Chief Medical Officer's outreach to physicians and payers, including online clinical education program about the MyoPro.

Since Dr. Kovelman joined us last fall, many more physicians are documenting the medical necessity for their patients. In the past few months, we've had over 20 insurance plans cover their first MyoPro, including state Medicaid plans in Arizona, Nevada, Utah, New Jersey; Blue Cross Blue Shield plans in Maryland, New York State and Rhode Island; multiple Medicare Advantage Plans such as CarePlus Florida and Stanford Health Care; and commercial plans, including Fallon Select.

For patients covered by Part B standard Medicare, we applied for benefit category change from DME rental to custom-fabricated orthosis or brace based on a new rule-making process that was underway at the Centers for Medicare & Medicaid Services at the beginning of the year. However, with the change in administration, the delay in appointing a new CMS head and a continued focus on COVID-19 inside the agency, nothing has happened with this proposed rule so far. So we withdrew our code change amendment, and we will follow up with CMS if and when new rules about correcting devices benefit category are implemented. In the meantime, we continue to engage with private and government insurance plans with increasing success as I described earlier.

In more recent weeks, we announced that we received word that the Healthcare Quality Association on Accreditation, or HQAA, is certifying that Myomo meets the accreditation requirements under the Social Security Act and federal regulations. This accredited provider status is an important step following on to our receiving the HCPCS codes and was required by the Centers for Medicare & Medicaid Services as a condition of our Medicare provider authorization. It's an important step to bringing the MyoPro to patients whose quality of life can benefit from its use.

Lately, we've been receiving some questions about our supply chain. So I'd like to mention that we are like many other companies that rely on technology components to manufacture our devices. While we have been able to source all the necessary items so far this year, we're experiencing some extended lead times in some cases and some cost increases as alternative parts are sourced. We're closely monitoring our supply chain so that orders are fulfilled on time, and there's no impact on our patient deliveries.

Our international business, primarily in Europe, is an important avenue for growth. During the second quarter, international sales represented approximately 10% of our revenue. We have a growing pipeline in Germany, the U.K. and Italy.

We're also able to have our joint venture formation documents certified by U.S. and Chinese government agencies during the second quarter, thus enabling Ryzur Medical, our JV partner in China, to proceed with the filings necessary to establish the business entity in China. We expect that process to be completed during the third quarter. As a reminder, Myomo will hold a 19.9% equity interest in the joint venture. We'll also receive an upfront license fee and annual license payments for the next 10 years. The joint venture launch preparations are ongoing and will take some time over the course of this year.

I'd also like to highlight some recent changes to our corporate governance. I'm pleased to welcome Dr. Milton Morris to Myomo's Board of Directors. Shareholders elected Dr. Morris in June. He's an experienced medical device executive and entrepreneur who's developed and launched new medical technologies and scaled up operations, and we look forward to his contributions to our company strategy and growth plans.

I also want to mention that at the end of the second quarter, we were delighted that Myomo stock was added to the Russell Microcap Index. The addition reflects the work that we've been doing to grow the company's valuation to a size that permits inclusion in this group of smaller emerging growth stocks. Membership in the index will be in place for 1 year.

Now I'll turn the call over to Dave Henry, our CFO, to review our financial results in more detail. I'll then come back and provide some additional updates and comment on our plans for the rest of the year. Dave?

Thank you, Paul. Turning now to our Q2 financial results. Revenue in the second quarter of 2021 was $3.1 million, and this is up 262% over the prior year second quarter which, of course, was adversely impacted by the COVID-19 pandemic. I'd like to point out that along with a larger number of MyoPro revenue units, we also had a higher average selling price, both year-over-year and on a sequential quarter basis. The higher ASP contributed to the revenue growth and also reflects the success we're having with our direct billing channel and our marketing efforts.

More specifically, we recognized revenue on 80 MyoPro units in the second quarter of 2021, an increase of 233% compared with the second quarter of 2020. We benefited from a record number of fill units in the second quarter, which are revenue units for which the authorizations and orders were received in the same quarter. Of the 80 revenue units, 38 were fill units, led by the strength in VA and international channels. Of those, nearly half were direct billing units.

Recall that for certain insurers where collection history has been established, we're taking revenue at delivery. This is an example of how we are able now to accelerate the revenue cycle in the direct billing channel.

Our backlog of units consist of insurance authorizations received but not yet converted to revenue. As of June 30, 2021, our backlog was 160 units. Ending backlog reflects 138 authorizations and orders in the second quarter and 16 patients who exited the backlog without converting to revenue. Approximately 88% of the quarter end backlog is comprised of direct billing candidates compared with 92% at the end of the first quarter.

As Paul mentioned, the reimbursement pipeline at June 30, was 898 MyoPro units, which reflects 277 additions to the pipeline during the quarter and 181 drops, which was 19% of the pipeline entering the second quarter. As a result of our marketing efforts and continued success in obtaining authorizations from new insurers, more than 80% of the patients in the pipeline at the end of the second quarter are covered by insurers that have previously reimbursed or agreed to reimburse for the MyoPro.

Gross margin for the second quarter of 2021 was 71%. This is up from 51% in the year-ago quarter. The year-over-year increase primarily reflects a higher average selling price, again reflecting the shift to our direct billing channel. There were 86 MyoPros delivered to patients in the second quarter for which we recorded cost of goods sold compared to 80 revenue units. This, combined with higher warranty reserves and material price increases on certain constrained components, impacted gross margin in the quarter. As Paul mentioned, we're experiencing longer lead times on certain materials, but we currently believe that we have access to a continuous supply of materials and components.

Operating expenses for the second quarter of 2021 were $4.8 million. This is up 46% compared with the same quarter a year ago and primarily reflects higher compensation and advertising costs.

The operating loss for the second quarter of 2021 was $2.6 million, and this continued to narrow from $2.8 million a year ago and $2.9 million in the first quarter of this year. Net loss for the second quarter of 2021 was $2.6 million or $0.46 per share compared with a net loss of $3.3 million or $1.12 per share for the second quarter of 2020 and $3 million or $0.57 a share for the first quarter of this year.

Adjusted EBITDA for the second quarter of 2021 improved to a negative $2.2 million, which compares with a negative $2.7 million for both the second quarter of 2020 and the first quarter of 2021.

Cash and cash equivalents as of June 30, 2021, were $13.8 million. Cash used by operations was $3.4 million in the second quarter and includes the payment of 2020 incentive compensation.

Turning briefly to our year-to-date financial results. Revenue for the 6 months ended June 30, 2021, was $5.4 million, up 191% over the prior year period.

The year-to-date operating loss and net loss attributable to common stockholders were $5.5 million and $5.6 million, respectively, compared with an operating loss of $6.3 million and a net loss attributable to common stockholders of $7.8 million for the 6 months ended June 30, 2020, respectively. Net loss attributable to common stockholders for the first 6 months of 2020 includes a charge of $500,000 related to partial extinguishment of the company's convertible note and approximately $700,000 for a deemed dividend on the price reset of certain warrants.

Year-to-date adjusted EBITDA improved to a negative $4.9 million compared with a negative $6 million in the same period a year ago.

Now -- I'll now address our near-term expectations. Cash used in operating activities is expected to decrease sequentially in the third quarter of 2021 due to a lower working capital requirement. We continue to believe our existing cash is sufficient to fund operations well into the second half of 2022. We continue to expect lower cash utilization in the second half of 2021 compared with the first half with the goal of full year 2021 cash usage to be below full year 2020 cash usage. With our first half results, we're nicely on track to achieve this goal.

Also, with a record number of insurance authorizations and orders during the second quarter and a robust backlog of 160 units as of June 30, along with a growing list of insurance companies reliably paying for the MyoPro, we expect to be able to deliver solid year-over-year growth once again in the third quarter.

With that overview, I'll turn the call back to Paul.

Thanks, Dave. Well, to reiterate, the pillars of our growth strategy are to increase our marketing activity to generate additional patient candidates for the MyoPro, to increase the number of insurance authorizations by working with payers and physicians to expand access to the MyoPro, to emphasize our direct billing channel in the U.S. for greater revenue and margin per unit and to expand in international markets to tap into additional patient demand.

Adding to these growth initiatives is our investment in product development as well as our investment in clinical research to demonstrate the positive health outcomes of using a MyoPro. Several independent studies are pending publication this year, and new studies are underway that are expected to support our marketing and reimbursement efforts, including an outcomes registry and additional RCTs, which we expect to be key components of our body of scientific evidence. We also look forward to a number of near-term catalysts, including an upcoming announcement about the adult version of the MyoPro and resuming development and launch of the MyoPal orthosis for children.

This concludes the formal part of our presentation, operator. We're now ready to open up the call to questions.

(Operator Instructions)

Before we take the first question, I want to mention that we are available for virtual and return to in-person investor meetings. So please contact LHA Investor Relations to set up a time. Their contact information is on today's news release. We'll also be participating in several virtual and in-person conferences during the second half of the year, including H.C. Wainwright's 23rd Annual Global Investment Conference, Colliers International and The MicroCap Rodeo in Austin, Texas in October. Some of these will be a hybrid conference, both in-person and virtual, and we're very excited that our plans call for in-person participation in New York City.

The first question comes from Scott Henry with ROTH Capital.

I just had a couple of questions. As I look at the model, strong second quarter. So I just wanted to get into some of the drivers there. For starters, pipeline adds, I think it was in 386 in Q1, 277 in Q2. Both good numbers, but obviously, Q1 a lot stronger than Q2. I think you mentioned that, that was -- that will be bouncing back. So I guess the question is, should I think Q3 will look a lot more like Q1 or Q2?

I think Q3 will look closer to Q1, Scott. We've already had, to this point in the quarter, over 100 new patient candidates enter the pipeline. I mean they've -- they came in as a lead. They've been medically evaluated, and now they're in the insurance process. So I think we'll see an upswing above the Q2 numbers.

Okay. So I mean do you think, and I'm talking about the pipeline adds, closer to the first quarter? Or do you think maybe you can get all the way into the 300s for pipeline adds in Q3?

Well, we're just over 100 about 1/3 of the way through the quarter. So I think we'll do a lot better than Q2 and somewhere in that range between Q2 and Q3, but we'll see how it goes over the next 2 months.

Okay. Great. And then the other number that moves around a little bit is the pipeline that is lost to erosion. Sometimes it's 13%, 12%. Sometimes it's 20%. I typically think of it being around 15% with volatility in either direction. Is that a safe assumption? Or should I be thinking of that number higher with the last couple of quarters or lower?

Scott, it's Dave. Yes, the drops were about 19% of the beginning pipeline. So I mean I still think somewhere between 15% and 20% is a good number. I think what's -- one thing I will say just to reiterate that, of the pipeline at the end of the second quarter, more than 80% represents patients with insurers who have authorized for the device. So it's a pretty high-quality pipeline, and we just -- hopefully, we'll see the drops moderate as we go. But it's -- the process is still long, and the top reason for patients dropping out is because we can't get a hold of them yet. So...

All right. That's fair enough. That's helpful. I appreciate the color, Dave. Final question is just the pricing moved back up. We've kind of seen that number before, but then it dropped down. Do you think the 2Q pricing is indicative of going forward? Or might we see it pull back a little bit? Just any color you can provide.

I would just -- I would continue to assume that the -- from a modeling standpoint, that the average selling price is around $35,000. Reimbursements can vary from anywhere from the 20s, if it's an O&P provider, all the way up to $90,000, which we've had before for some of the direct billing reimbursement. So it's a wide range there. So given that, I would just continue to assume like a mid-30s kind of ASP.

The next question comes from Jim Sidoti of Sidoti & Company.

So a lot has happened with CMS over the past couple of years. You were certified as an authorized provider. You've got your HCPCS code. You've received accreditation. But then you pulled back the application as you're waiting on CMS to make up their final regulations and get their house in order. But how do we think about this going forward? How much -- how many more steps do you think there'll be before you get that code quantified?

Well, in our discussions with CMS, we're shipping ongoing ever since we got the HCPCS codes is -- and you may recall last year -- towards the end of last year, they put out a proposed rulemaking, which would enable companies who feel like their devices are in the wrong category apply for a benefit category change.

And so that's what we did. However, that rulemaking was never finally approved. I think once the administration changed in January, everything just stalled over there and it wasn't until recently that a new administrator was appointed. So what we understand is that CMS will propose that rulemaking again in the next 4 to 6 weeks. And if that -- and then it takes a while to get comments and to decide on it. So if that happens, then we will certainly look to -- as an opening there to correct that benefit category so that Part B patients get to get access to this.

In the meantime, ever since we got those HCPCS codes back in January of 2019, we've been able to address these needs of a large and growing population of Medicare Advantage Plans. In fact, I saw some recent data that showed that Medicare Advantage Plans in the last couple of years have gone from 35% to 39% of seniors. So that means hundreds of thousands of additional Medicare-eligible patients have opted for Medicare Advantage Plans, and we're getting a number of those to reimburse for the device. So that's a positive trend even if this Part B drags on for a while.

That was my next observation. You tripled revenue in the quarter. I think I heard you say that you've got 20 new insurance providers to sort of reimburse the device in the quarter. So how critical is it to get these codes quantified? Or can you continue to grow without them?

I think we've got strong growth prospects in front of us. Just based on what we're doing on a case-by-case basis, our Chief Medical Officer, is now actively engaging with these commercial payers and some of the state Medicaid plans where we've gotten successful payments over time. Once there's a large enough bolus of patients that have been approved and there's others in the queue, you get the attention of the medical directors of these payers.

It takes a while to get those meetings, and we expect to have the first -- several of those meetings in the fall. And then you present your case for coverage. You got support from local physicians and other clinical specialists in the area. And then pending the medical director's coverage decision, then you go over to the business side of the house to negotiate a contract. So it's not a quick process, but it's one that we're making steady progress on. And hopefully, by next year sometime, we would have some of these commercial contracts in place.

In the meantime, we continue to get repeat orders. As Dave mentioned, over 80% of our pipeline are with payers that have already paid for MyoPro or have agreed to under like a single case agreement. So we expect we will continue to focus on that large number of patients that have those insurance plans and keep expanding the number ones that are covering this.

Okay. And then the last question for me is on seasonality. In the medical device space, some of the more mature companies typically see a slowdown in the summer quarter as folks were on vacation. But you guys have been growing so fast. That hasn't been a factor for you up until now. I mean do you think you're at a point where you'll start to see the typical seasonality trends that some of the other companies see?

Well, we do believe -- our guidance is for a strong revenue -- year-over-year revenue growth in the third quarter. And we have a backlog comparable to fourth quarter of last year. And recall, fourth quarter of last year, we had our -- we had record revenues. So I think we have a -- we have the opportunity here for a very good quarter in third quarter as well.

The next question comes from Benjamin Haynor with Alliance Global Partners.

First off for me, just -- I know that the backlog and the revenue units and authorizations had really solid performance here during the quarter. And I also realize how pipeline kind of gets the attention just because it's the "top of the funnel." Did I hear correctly that now more than 80% of the pipeline is with insurers that have reimbursed the device previously?

That's right.

And can you give us a sense of what that looked like a year ago?

I'd have to get back to you on that. I don't have that number handy.

I mean a ballpark would be helpful as well. I mean is it 50%? Is it 10%?

I would say qualitatively, it's better because we have been undertaking -- our marketing strategy over the past several quarters now is to try to -- through the targeting on social media to try to target those payers with the insurers that would reimburse the device. That includes Medicare Advantage Plans and other commercial plans in the past. So this is a purposeful result of the things that we've been doing over the past several quarters. So a number -- the exact number, I don't have, but I'm going to venture to guess it's higher than what it was a year ago.

Well, the other thing too -- Ben, it's Paul. As I mentioned, we've been continuing to get more and more payers become first-time MyoPro reimbursers. And so that number of payers that are reimbursing for the device continues to grow quarter after quarter.

Okay. I mean that makes sense. So everything should have kind of a virtuous cycle where the pipeline continues to improve if you keep executing like you have then.

That's right. More patients in the pipeline and more of these patients with payers that are covering the device.

Makes sense. And then the 38 of the 80 revenue units being ones where the orders and authorizations occurred during the quarter, and you mentioned that's a record, is it a record both on an absolute basis of 38 units but also on a percentage basis being whatever, 48% or so of the revenue units were ordered and authorized during the quarter? What's the right way to think about that?

Well, on a percentage basis, probably not because we -- when we were -- our primary channels for O&P and VA, a lot of that was turns business. But since we really started emphasizing direct billing a couple of years ago, it's a record in terms of both absolute number and certainly within -- it's a record in terms of absolute number. But in terms of percentages, probably going back to when we started doing direct billing more extensively, it's a record for that time period as well.

And the reason we had so many -- and just to reiterate, of the 38 fill units in the quarter, half of those were direct billing. And so that's the result of being able to recognize revenue upon delivery for those insurers where we have sufficient collection history. So we don't have to wait until payment to recognize revenue.

So if I'm understanding you correctly then, if you take out the O&P units and, call it, let's call it, 60 units and 19 or so of those were direct billing patients that were ordered and authorized during the quarter, so it's like 19 of 60, so like roughly 1/3?

Yes. 19 of the 60 were the other channels that's O&P and VA. That's what those were, yes.

Okay. And then I guess last one for me and then I'll jump back in the queue. What proportion of insurers have you established of like the quarterly revenue here? Have you established a track record? And how do you expect that to grow? I'm not sure if I'm -- does that make sense...

Yes. Those insurers that we have sufficient collection history on represent about 40% or so of our revenue. And over time, we would look for that to grow as we expand the list of payers that we have sufficient collection history on.

Okay. That's exactly what I was looking for. Congrats on the quarter.

(Operator Instructions) The next question comes from Edward Woo with Ascendiant Capital.

Yes. Congratulations on the quarter, guys, and also congratulations on the growth in Europe. You mentioned that it was 10% of revenue. What do you think it could be long term? Do you think it could get to 50%?

Well, the U.S. market is growing very strongly for us. So we've got strong growth in Europe. Whether or not it can take more global market share of our revenue, that will depend over time. Clearly, with China coming on board, more of our revenue will start to come from international. And we'll have to make investments to open up other markets to really move that percentage up. But we're satisfied right now if that's in the range of 10% to 15% of our revenue because, again, overall, we've been growing north of 100% a year.

And there's other -- Europe has been -- there are some markets in Europe that have been inaccessible up until now, and we still have 10% of our revenues coming from Europe. So as things with the pandemic start to wane a bit and more countries open up like the U.K. or Italy and others that we have established good relationships with, we would hope that -- hopefully, that the international part of the revenues will continue to grow.

Will you be able to use the same game plan that you have in the U.S., focus on direct and also a lot of the social media marketing? Would that be applicable in Europe as well as Asia?

Well, somewhat. In these other countries, we go through orthotics and prosthetics practices. Because they are licensed in the country, they have relationships with the various payers. They speak the local language, of course. So it's much more difficult for us to establish our own clinical operation in these other countries, but we're very satisfied working with these O&P partners.

We do have now, for example, a German website. We are taking some of the marketing activities, approach from the U.S. and starting to do that with social media in places like Germany. So as a result, we're going to take best practices from here to Europe, but we can't replicate exactly what we do here in the United States.

This concludes our question-and-answer session. I would like to turn the conference back over to Paul Gudonis for any closing remarks.

Thank you, operator. Well, in closing, we're optimistic that the economy here and in other countries will continue to open up and that despite the current increase in cases due to the Delta variant, the pandemic will abate over the course of the year. Assuming that's the case, we expect to accelerate the additions to our patient pipeline and record strong annual revenue growth for the fifth year in a row. We're addressing a very large unmet need with a life-changing solution while contributing and continuing along the path to our milestone of breakeven cash flow from operations. So once again, thanks for your time and for your interest in Myomo. Have a good evening.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.