Sientra Inc (SIEN) 2015 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 and year-end 2015 Sientra, Inc. earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions).

I would now like to turn the call over to your host, Mr. Nick Laudico from The Ruth Group. Mr. Laudico, you may begin.

Thanks, operator. In our remarks today, we will include statements that are considered forward-looking statements within the meaning of the United States securities laws. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current assumptions and expectations of future events and trends, which may affect the Company's business, strategy, operations or financial performance.

A detailed discussion of the risks and uncertainties that the Company faces is contained in its Annual Report on Form 10-K, which will be filed later today. Actual results may differ materially from those expressed or in or implied by the forward-looking statements. The Company undertakes no obligation to update or review any estimate, projection or forward-looking statement.

With that said, I will hand the call over to Jeffrey Nugent, Chairman and CEO of Sientra.

Thanks, Nick. Good afternoon to everyone and thank you for participating in today's call. Joining me today are Matt Pigeon, our Chief Financial Officer and Treasurer; and Charlie Huiner, our Chief Operating Officer and Senior Vice President of Corporate Development and Strategy.

First, I will provide a general business update and then turn the call over to Matt, who will provide specific details on our financials for the fourth-quarter and full-year 2015. I will then return to provide a brief summary of our focus for the remainder of 2016, and then we will open this up to questions.

I want to start by recognizing that the past five months have been enormously challenging for Sientra and all of our stakeholders, including customers, employees and investors. And I am sure you are all aware of it. However, our organization faced these challenges head-on, acting honestly and responsibly, and we made difficult discussions in order to protect the most valuable asset that we have -- the trust of our Board-certified plastic surgeon customers.

Sientra used every means available, both internally and externally, to emerge from the issues in a position of strength and confidence. I want to emphasize how proud I am of the accomplishments that the Sientra team has made in this short period of time, while delivering on the commitments that we made on our third-quarter conference call.

Let me highlight the key accomplishments over the past several months. First, we completed a series of extremely rigorous studies conducted by reputable, independent laboratories to examine multiple safety parameters of our products. These studies were reviewed by a number of leading and well-respected Board-certified plastic surgeons, who concluded unanimously that Sientra products are safe and always have been.

We then confirmed to our customers that our products remain approved by the FDA -- under the PMA process, arguably the highest medical device safety standard in the world.

Third, following the confirmation, we reentered the US market with all of our products beginning March 1. And while it remains early, we are seeing positive results. We made significant progress in establishing a stable manufacturing supply chain to ensure uninterrupted availability of our breast implants for our customers.

And just today, we acquired the exclusive US rights to bioCorneum, the best-in-class silicone scar management product. And we're all very excited about this as a first real step in our portfolio expansion.

I will now focus on each of these milestones in greater detail to put them into context for our long-term strategy of building market leadership and shareholder value. After voluntarily halting commercialization, we asked a team of independent laboratories to assess the presence of microscopic particulate matter on the surface of Sientra breast implants, and then had those results reviewed by a faculty of Board-certified plastic surgeons. We felt it was the responsible action to take at the time to ensure that Sientra products remained a safe choice for our customers and their patients.

The results confirm that Sientra implants continue to be a safe choice for both our surgeons and their patients. I want to emphasize that point.

We've provided the results of these objective third-party studies to the FDA at the end of 2015, and today, we issued a white paper summarizing these findings. The data collected in the study underscored that low levels of particulate matter, meaning microscopic levels of particulate matter, were found on Sientra implants.

Importantly, the investigators noted that a large percentage of identified particles consisted of silicone-based organic polymer material, which is the primary component in the shells of our breast implants themselves. And, last, the data revealed that even within well-controlled manufacturing processes in compliance with PMA approval, the presence of microscopic particles is unavoidable.

Dr. William Adams, a Board-certified plastic surgeon, our lead reviewer, noted that the low level of particulates detected is small, compared to, for example, the shedding from a typical laparotomy pad that a patient would be subjected to during any surgical procedure. And I think that's a very pertinent example that supports our case.

Based on this strong evidence and our ongoing discussion with the FDA, Sientra has returned all of its products to the market as of March 1. Over the coming months, we will work closely with advisers, medical societies and our sales team, to use our white paper and other materials to educate our customers and their patients about the safety and differentiation of our products.

In terms of that market reentry, we are proceeding quickly but responsibly, as we solidify the trust and support of our customers, and regain the position that we had just several months ago. Our entire organization is deeply involved in this process. In the four months that I have served as Sientra's CEO -- to which I am honored to have been appointed -- I have traveled extensively to meet with our Board-certified plastic surgeon customers to keep the community informed on our process.

Our dedication and commitment to Board-certified plastic surgeons specifically remains as strong as ever. And that commitment will continue and accelerate as we focus on regaining our commercial momentum in the most responsible manner possible. We are pleased to report strong support from our customers, based on a growing body of clinical evidence collected, as well as the high level of customer service and the strong relationships that are central to Sientra's philosophy.

Part of the reason we maintain a sense of confidence as we return to market lies with some of the things that have not changed, namely differentiated attributes of our products. Sientra implants offer softness without compromising strength while providing the look and feel of a natural breast. This is enabled by our unique, high-strength, cohesive silicone gel and the highest gel shell adherents in the industry.

Many of these attributes were simply not available in the US prior to our PMA approval in 2012. And, also, from a clinical standpoint, our nine-year clinical data is based on the largest study of its kind, and demonstrates low incidence of implant rupture capsular contracture. This follows on a study that is being published also today in the Journal of Aesthetic Surgery.

Let me address our critical strategic initiative of establishing a stable, long-term manufacturing supply chain to ensure uninterrupted product availability to our surgeon customers. As many of you are aware, we had already begun establishing parallel supply alternatives some time ago, and they are well underway and meeting timelines that we have established.

I want to be clear that we are in a strong position in terms of current supply of finished goods. We continue to believe that we have ample finished goods inventory to satisfy the anticipated demand of our controlled precision-based approach to market reentry.

Sientra is more than a breast implant company. And today, we announced the acquisition of bioCorneum, an advanced silicone gel scar management solution that expands our current aesthetics portfolio. BioCorneum is a proven solution to the widespread challenge of surgical scarring following breast augmentation and other cosmetic surgical procedures.

Backed by extensive clinical evidence from 16 different studies, bioCorneum is used by over 1,800 physicians in the US. It is an excellent addition to our product portfolio, with significant upside, based on leveraging our sales force expertise in the plastic surgery market.

A little bit about bioCorneum -- it is a quick drying, patented silicone gel that creates an invisible, breathable, flexible and waterproof silicone sheet over scars. The brand includes bioCorneum Plus, a silicone gel that provides UV30 sun protection. In a clinical study that supported the product's 510(k) clearance from the FDA, treatment with bioCorneum following incisions resulted in 67% of scars being rated normal compared to only 28% without treatment.

The bioCorneum acquisition represents an initial step forward in our stated long-term intent to diversify our business with value-creating acquisitions that leverage our highly experienced sales force, which is an obvious opportunity to the Company.

I will now turn the call over to our CFO, Matt Pigeon. And I will return following Matt's detail on our financial results. Matt?

Great. Thanks, Jeff. I will now discuss our fourth-quarter and full-year 2015 results. Our fourth-quarter and full-year 2015 financials are available in greater detail in our earnings press release issued earlier this afternoon, and additional details will be available in our Form 10-K, which will be filed shortly.

Total sales for the quarter ended December 31, 2015 were $1.5 million compared to total sales of $12.1 million for the same period in 2014. Total sales for the year ended December 31, 2015 were $38.1 million compared to total sales of $44.7 million for the full-year 2014. The fourth-quarter and full-year 2015 decrease in sales was driven by our decision to voluntarily put a temporary hold on the sales of all Silimed manufactured products.

Gross product for the fourth quarter of 2015 was $1 million or 64.4% of sales compared to gross profit of $8.9 million or 73.5% of sales for the same period in 2014. The decrease in gross profit and gross margin was driven primarily by lower net sales and greater fixed overhead as a percentage of net sales in the quarter.

Gross profit for the year ended December 31, 2015 was $27.5 million or 72% of sales compared to gross profit of $33.2 million or 74.3% of sales for the full-year 2014. The decrease in gross margin for the full-year 2015 was primarily due to an incremental reserve for obsolete inventory, greater fixed overhead as a percentage of total sales, and manufacturing cost increases.

Operating expenses for the fourth quarter of 2015 were $29.2 million, an increase of $17.8 million compared to operating expenses of $11.4 million for the same period in 2014. The fourth quarter of 2015 included a non-cash impairment charge of $14.3 million related to the write-down of goodwill as a result of the significant stock price decline during the quarter.

Excluding the goodwill impairment, total expenses in the fourth quarter were $14.9 million, an increase of $3.5 million or 31% over the fourth quarter in 2014. Further increases in operating expenses in the quarter were due to increases in product development costs, transition costs for certain executives, and outside legal counsel costs.

Operating expenses for the year ended December 31, 2015 totaled $66 million, an increase of $27 million compared to operating expenses of $39 million for the full-year 2014. The increase was primarily due to the previously mentioned goodwill impairment charge of $14.3 million, as well as greater employee-related expenses, product development costs, expenses related to operating as a public company, and outside legal counsel costs.

Net loss for the fourth quarter of 2015 was $28.3 million compared to $3.2 million for the same period in 2014. Net loss for the full-year ended December 31, 2015 was $41.2 million compared to $5.8 million for the same period in 2014.

Net cash and cash equivalents at December 31, 2015 were $112.8 million compared to $96.7 million at the beginning of the year. This increase in cash is a result of $61.4 million in net proceeds raised from our follow-on offering last September, offset by the repayment of all principal interest, other amounts and obligations owed to Oxford Finance totaling $24.5 million in October 27th of 2015, as well as our voluntarily hold on all Silimed manufactured products in the quarter.

Subsequently, in March 2016, as Jeff mentioned, we acquired bioCorneum, a best-in-class silicone scar management solution for $7 million in cash. We continue to maintain a healthy balance sheet with no debt and the necessary cash to fund our market reentry and execute on our growth strategy.

In regards to providing financial guidance, I want to emphasize that we are in the very early stages of our market reentry, and we will not be providing 2016's financial guidance at this time. As we continue to execute on our market entry, we expect to gain more visibility for commercial sales rates and operational performance, and we will monitor closely the data we are collecting in order to be in a position to provide guidance at the appropriate time.

I will now turn the call back over to Jeff for final closing remarks.

Thanks, Matt. Now that we have achieved the major milestones we laid out for the fourth quarter of 2015 and early 2016, let me outline what our focus will be over the remainder of the year.

First, we are committed to -- we are totally committed to reestablishing our presence in the US market, and that includes the education of Board-certified plastic surgeons, dissemination of the conclusions of our independent review, and the data that we have collected and provided to the FDA leading to our market reentry.

This process includes the important element of solidifying extensive trusting relationships within the physician marketplace. And, since I have been in my position, I have to say that I am extremely impressed with the level of breadth and depth of the relationships that exist within Sientra.

As part of our market reentry, we are also building on and expanding the high levels of customer service that Sientra has been noted for. Our plan is to move our customer service to the next level of excellence, further distancing us from the competition. I am a firm believer in continuous improvement, and on every part of this business, we are using that strategy.

As I mentioned, moving toward a definitive solution to secure a long-term, stable manufacturing supply chain, also remains a critical area of priority of the entire management team and, in fact, the entire Company. We have made significant progress toward a solution, and I might say alternative parallel solutions, and we will provide more specifics as they become closer to implementation.

Last, we demonstrated our ability to execute the deployment of our capital in very strategic, targeted ways to leverage our sales force with complementary best-in-class products. Our primary focus will be on training the sales force on bioCorneum Plus, and introducing its benefits to surgeons beginning immediately, with an eye toward other opportunities that will diversify our business mix, drive revenues, and build on our already strong brand.

We look forward to keeping you updated on our progress with each of these initiatives as we move through 2016. Operator, I would now like to open the calls for questions.

(Operator Instructions). Jon Block, Stifel.

This is [Ethan] on for Jon. We're having some difficulties with our phones. Maybe if I could just start with a couple of questions on the bioCorneum acquisition. Are you willing to share with us how much revenue they are doing? And also maybe could you try to size up the current market for scar management therapy?

I am going to turn that over to Charlie, who has been the leader in this acquisition. Charlie, do you want to handle that?

Sure, and thanks for the question. Obviously, we're excited to bring bioCorneum -- the bioCorneum assets into our portfolio. We are not going to talk about revenue at this moment other than to say, as we mentioned in the press release, we acquired the assets for $7 million. And I think we view it as an attractive economic acquisition for us.

And, importantly, I think what we will say is that the business itself is running at cash flow positive. And we continue to believe that we will be able to integrate the business and build from that base, and increase from that base, given that we are now going to be selling that product line through a much larger set of sales representatives in our PSCs.

The market size, scar management is a really large market when you look at lasers, scar management gels, et cetera. But just looking at scar management gels and sheeting, we estimate the market to be about $30 million to $35 million in the United States.

Okay, then maybe just a follow-up on that last bit. If we think about the ASPs on your implants being about $700 per unit or $1,400 on a per patient basis, what is the incremental revenue to the Company when you add in bioCorneum silicone gel therapy?

Yes, you know, I appreciate the question. And this is early, and with respect to how we are going to communicate both bioCorneum as well as our market reentry revenue on an ongoing basis. So, we're going to continue to defer. I appreciate the question. We certainly understand that you and others are wanting to understand how to peg the revenue opportunity for bioCorneum. But until we're at a point where we are ready to more holistically provide financial guidance, we are going to defer on that for now.

Okay, great, thanks. Sorry, go ahead.

I do want to emphasize, though, that the concept based in reality is that we are taking a market-leading product that had limited distribution and resources behind it, and expanding that into the call pattern and the bags of our highly experienced sales force. Most of the physicians had not been detailed before. So it portends a -- I believe, a very nice upside. But as Charlie said, we're not in a position to really offer any guidance here.

Got it. And, Jeff, you mentioned still working through some different options for establishing an alternate source of manufacturing. Do you have internal timelines for when you expect to make a decision, if one hasn't been made already? Or at least can you give us some sort of specifics on timing for when you plan to communicate that to the investment community?

And then just lastly on that, as you are working through this process, do you have a preference for establishing manufacturing in the US? Thanks.

Manufacturing supply and reentering a supply chain relationship is one of the top priorities of the Company, as I am sure you can appreciate. I want to remind everyone that we had taken the initiative some time ago to establish a redundant and duplicate source for supply. And those aggressive plans are on schedule and moving along well.

As with anything in a FDA regulated industry, one of the variables that affect my answer to your question is the timeline devoted to FDA approval. And I don't need to say anything more about that. However, we believe that we have got a significant level of inventory, is very easily determined by looking at our balance sheet. And we believe that we have sufficient inventory to last us between 18 and 24 months, which we believe is the most conservative estimate of when we will be able to enter resupply.

Does that help?

Yes, it does. Thanks. I'll jump back in queue.

Okay.

Thom Gunderson, Piper Jaffray.

So, Jeff, I was just going to ask the question you just answered on the 18 to 24 months. So, let me instead ask about a comment you made just before that on the FDA approval timelines.

Hypothetically -- I don't want you to give us anything that -- but hypothetically, if you were to manufacture this or have it manufactured at Silimed in another building under exactly the same conditions, under exactly the same protocol, technically, does it need FDA approval?

Yes, it does, Thom. Because importing products into the United States requires complete FDA approval, inspection of the facility, and compliance with all GMP requirements. So, as we have all had experience with the FDA and their standards, there is a wide range of time necessary to complete that certification.

So, each one of our alternatives have a number of variables that will affect which one comes online first. And as we have said before, our intention is to have a redundancy so that we have protection against the kind of situation we experienced with Silimed.

So, I don't want to talk around your question, but I hope that this is beginning to answer it.

It's -- you're right. It is the beginning, and we will stay tuned for the next chapters. On the -- Charlie, on the bioCorneum, I am not sure if you said, no, you're not going to tell us what the price of the product is? I am just curious, is it a $10 product or a $1,000 product?

No -- you know, we can certainly share sort of the directional pricing. And the directional pricing to the doctor from -- at the time in August, I would give you the average in the $30 -- the low-$30 for a unit of the product. And again, it is going to fluctuate by size of the actual product that's sold. But I think it is fair to say that in the $30's, in the low-$30's, is the average selling price.

And the gross margins are -- I think we are happy to talk about, at a high level, the gross margins, we believe -- and again, this is going to have to be subject to a little bit of validation as we roll it into our financials -- but it is fair to say it is probably in the low-80% range is where this product line flows from Enaltus, we acquired the asset from.

Got it. And I was surprised to hear in the script comments that 1,800 physicians in the US had used the product. When I went online and did find the doctor, I ended up with one in Minnesota. I suppose that still could happen with 1,800 physicians, but is that just the Webfinder that is not up to date? Or is there something else going on?

No, I mean, I can't speak to the micro level of exactly where the highest concentration of users of bioCorneum, but you can imagine that is similar to the way that our breast implants are concentrated on major centers. And not saying Minneapolis isn't the major center. But I think, clearly, they have concentrations of surgeons that they have built up around the West Coast, certainly the Northeast, Florida. And again, I think you find that 1,800 number is very supportable.

Got it. And they had -- they were selling through distributors or sales force? I am looking for the ability of Sientra to kind of take this to the next level.

Sure. And that's -- I think that's a good question, Thom, and it's at the crux of what we believe the value play is here for Sientra, which is they have got seven reps that are coming onboard to Sientra as what we call specialty reps. They are going to be focused on growing the bioCorneum brand.

But then imagine that on top of the seven bioCorneum reps, we're going to have our existing sales force now beginning to detail with our existing Board-certified plastic surgeons. And you can imagine the sales force call-point leverage that we are planning on achieving by now bringing that other level of selling into the brand, the bioCorneum brand.

Got it. And then, Matt, you just wound up and gave us your report on full-year 2015; tough year financially. And you said $100-and-something-million minus whatever you spent year-to-date plus the $7 million is what you have got now. Is -- you must have -- or I am assuming you have reduced your cash burn, given the circumstances. Any kind of range you can give us? Is it down 10%, 20%, 50%?

Yes, Thom, I appreciate the ask. And as I mentioned in our comments, we're not going to give guidance, but I certainly recognize that cash burn is a consideration for us all as we think about 2016, given that we had the hold on our product and essentially generating no revenues in Q4 and as we begin to, again, ramp in Q1 and early 2016.

We have taken steps to minimize some of our variable expenses where appropriate, but also understanding that we were coming back on to the marketplace, we tried to do it in a prudent and appropriate way. But what I would say is that we are appropriately funded to achieve our growth plans for 2016, and also to reach a cash flow positive position on a standalone basis.

Sorry, I want to make sure I got that last statement. My first knee-jerk is to say cash flow positive by when? But you're not going to tell me that. But cash flow positive, given the resources you have today?

That's correct.

Got it. And then I will finish up. Jeff, I just want to clarify here, in the prepared remarks, you said you are planning to regain your position in the market with your best-in-market -- you didn't say that; I will -- implants. I just want to reconfirm what I thought I believed, and that is, the launch is going -- of the existing inventory -- is going to a subset of your customers. It's not going to all previous customers; more of a 80%/20% kind of role. Was that a good assumption on my part?

That's directional. I think that there are a couple of factors that are affecting this, as I am sure you can understand. One is the ramp time associated with getting to all of our customers.

And the one that I put the most emphasis on is that we are engaging customers where we can assure them that their needs in a very precise way are going to be available for them through the most conservative estimate of when manufacturing will come back online. So, another way to put it is we are not planning on getting back to 100% of our previous customers for several reasons.

But we want this to be a quality experience. And if we can't make it a quality experience with the right amount of insurance or commitment, then we are going to take the time necessary to get there.

Okay, thanks. That's it for me, guys.

Okay. Thanks, Thom.

Thanks, Thom.

Margaret Kaczor, William Blair.

So, the first kind of two questions -- and I apologize this is going to be a long one -- is on manufacturing. And there is two things that really stuck out with me. So, first, I think in a prior press release, you have said that you are looking to secure both a redundant supply going forward, and then, secondly, that you are -- you have obviously been doing this for a considerable amount of time, and the latter you have said again on this call.

But given this backdrop, what have you learned so far on your ability to secure that redundant supply? Can you find another maybe third-party manufacturer that has experience with hard silicone products that you can then expand into the soft silicone line, at least within medical technology?

I think the best way to answer that is, the basis behind going down parallel paths, our primary objective is to develop the manufacturing capability that is consistent with our current product specifications. So, while the first objective is to enter into a confident, high-quality resupply, we're also looking at the ability to bring new innovations into the market.

But the first priority is really to be able to take what we have manufactured in the past with Silimed and be able to have multiple sources, and I could add, a level of confidence associated with these alternatives is -- frankly, what we just learned -- is critical to our meeting the objectives that we've got. And it's nothing short of market leadership.

So, as I know you can appreciate, there are a number of variables here that we are confident that we are doing this in a very high-quality way. And there are two parts to this. The first part is designing the manufacturing process, making it as efficient as possible, so that we can maintain our gross margins.

The second part of it is to do that job so well that the FDA certification process skews toward the shorter end of the spectrum than the longer. And we believe we have a high level of credibility with the FDA. So, frankly, that is one of the variables that cause us to not be able to be more forthcoming.

Okay, and then just to follow up on that. My understanding is that if you do a change in location of a site of a manufacturing facility, it requires a 180 day PMA supplement. Now, so first, is that true in this scenario? Have you submitted anything yet either for that parallel facility? Are you guys still going through the early stages of the design? Or have you submitted something for the other Silimed facility? And frankly, are you even allowed to file on behalf of Silimed? Or does Silimed have that control?

I can't comment on Silimed, as I'm sure you can appreciate, but the other alternatives that we have are, like I said, very well along. And I would expect to be able to give you some further certainty or indications. I can't even tell you -- I don't want to create an expectation that, by June, July, I'm going to have something that I can share with you.

But suffice it to say that there isn't a higher priority in the Company. And that we have got top people in these areas who are spending full-time driving these parallel efforts. And I don't know that that's very nourishing for you. But I wish that I could tell you more, because I have spent a lot of time in this part of the business and we are doing this right, and we are doing it quickly.

And just to be clear, is it a 180-day PMA supplement?

It's -- the PMA supplement is 180 days, that it varies between -- in other words, for certification -- it varies based on the quality of the facility when the FDA comes in to inspect. So, obviously, with our experience in quality, mine included, we want this to be one of the easiest decisions and inspections that the FDA could possibly make.

And we have the top consultants on the outside, who I have worked with for decades, who are helping us plot this through just for the objective that I mentioned. We want this fast, but we want it right.

Okay, that's very helpful. And then, in terms of the inventory, I kind of -- I can see that you have $20 million right now. If I roll that against your gross margins in the past, that should equate to maybe $60 million to $65 million in potential sales now. But given that 18 to 24-month time-frame of getting approval, what levels are you guys comfortable selling at? And I'm assuming again their quotas to the sales reps did not exceed those estimates?

Yes, let me take that last point first, because, as we know, the DNA of sales force is to exceed forecast and a number of other things. What we have put in place is a very different approach. And their success is not going to be measured on the extent that they are able to exceed the forecast. They maximize their benefit, their income, based on hitting specific targets and not exceeding them.

The other part of this, which is interesting, is that we have recognized the additional bandwidth of our PSCs, and are making an aggressive effort to increase their customer service capabilities and, like I said in the script, take our customer service to the next highest level.

Great. And then I'm going to sneak one more in. In terms of the acquisition, how much of the 1,800 physicians are in the US versus OUS? And can you launch internationally over time? And, finally, kind of their manufacturing situation -- is it internal or external? Thank you.

The acquisition of bioCorneum relates to the US only. That Sinclair owns the ex-US rights, and I won't give you anything specific, but I think we have all already indicated that one of our objectives is to expand beyond the US. And in terms of bioCorneum, the international product is doing very well and growing at a -- at least at the rate that bioCorneum is in the US.

And the important thing I will leave you with is that, again, bioCorneum was treated as a small product with a very limited sales force, and now bringing it into Sientra and being able to put it in the offerings and the bag that the Sientra PSCs bring into their practices, that's the basis of what we believe is going to be a significantly higher growth rate than what they have seen before.

And Margaret, this is Charlie, just to trail Jeff's comments, just one clarification. Because obviously, I have been a little closer to it. The -- and just to clarify the -- who owns the rights outside the US. And Jeff is absolutely right -- it used to be Sinclair Pharma. As of, I believe, November of last year, those rights were sold to Alliance Pharma.

And, again, just for clarity, the product outside the US is called Kelo-Cote, not bioCorneum. So we have the exclusive rights to bioCorneum as well as we own the IP and trademark. Alliance Pharma now, and through their subsidiary, owns the right to Kelo-Cote.

And as Jeff mentioned, that has been doing very well internationally outside the United States. And that -- my understanding is that product under Sinclair's stewardship had reached about GBP12 million of revenue selling through direct sales forces in Europe and distributors in other markets. So, again, just a little bit more background on the broader product opportunity and how it has been sold, and how it has created its reputation around the world.

Very helpful. Thank you.

Ravi Misra, Leerink Partners.

This is Ravi in for Rich. Thank you for taking the questions. Just a couple of follow-ups. One, did you comment on the headcount at the end of 4Q? And if so, did that -- I mean, I guess that doesn't include the seven that you are bringing onboard with bioCorneum. And any sort of sales force hiring commentary for 2016?

And then, two, building on that, if you would just maybe talk to us about some of the initiatives that you're taking to re-engage your customers? Thank you.

As I understood your first question, you asked the number of reps we had at year-end, fourth quarter? Is that right?

Yes. Yes.

All right. That we had a total of 43 reps in the field with a very senior, experienced group of directors and a Vice President of Sales, Customer Service. But the actual number of people on the street was 43 -- period.

What was your next question?

I am just wondering how that ramp -- how we should expect that ramp in 2016 in terms of what type of hiring efforts are you looking to do in the sales force? How the seven that you're bringing onboard from bioCorneum play into that?

And then just as a follow-up on that, how you plan just -- if you could just give a little bit of detail on the re-engagement, the surgeon re-engagement programs that you plan on undertaking. Thank you.

All right. Well, what we have really done is put -- started some extensive training that, frankly, we have had some time to do with our existing PSCs, the Plastic Surgery Consultants, and have made very specific forecasts and estimates on a practice-by-practice basis.

So, I keep coming back to we're going to rebuild this business one practice at a time, one relationship at a time, and having our representatives get as deep as they can into the physicians' practice to be able to anticipate what their demand is going to be over a -- an extended period of time.

And I think I mentioned earlier that we will reenter commercial relationships with the Sientra promise that we will continue to be able to supply them at a -- as close to 100% service level as we can. And that includes their beginning to carry bioCorneum with each one of those prospective calls.

As far as the seven people we're bringing in, they have been primarily focused on non-Board-certified plastic surgeons. So, we expect, and we have gotten their input, that there is significant inventory. For them to stay in those specialties -- and again dermatology being, I think, the largest, that -- and they are going to share their experience with bioCorneum with our plastic surgery consultants, so we're sharing the wealth. But what it really means is that, in effect, we have got an additional 35-plus representatives out there that bioCorneum didn't have before.

And we have done a fair amount of research to identify the familiarity, the level of support, the current usage levels and the interest in using it. So, that translates to a very intelligent reason to make an acquisition like this, because we can do more with this product than the current owners could.

Does that help?

Yes, definitely helpful. Thank you.

Okay. Thanks.

Thank you.

Are there any more calls, operator?

I'm not showing any further questions at this time.

Excellent. I just want to conclude by again thanking you all for your interest in Sientra, that we are committed to providing as transparent information as we can, and that I trust you understand the early stage of reentering the market. But I also want to leave you with a -- as objective an opinion as I can possibly make. And I am a pretty objective person.

The whole team here is very excited about what's in front of us. We have some hurdles that we still have to get over, but I think the future of Sientra is very strong. It may take us a little bit longer to get to where we want to be, but that's not going to dissuade us from being as aggressive as we can.

So, again, thank you for joining us on the call. And we look forward to talking again in the near future.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may all disconnect and have a wonderful day.

Thank you.