Sientra Inc (SIEN) 2021 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Sientra First Quarter 2021 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions) I would now like to hand the conference over to your speaker today, Oliver Bennett. Please go ahead.

Thanks, operator. Good afternoon, and welcome to the Sientra First Quarter 2021 Earnings Call. I would like to remind everyone that in our remarks today, we will include statements that are considered forward-looking statements within the meaning of United States security 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 previously filed annual and quarterly reports on Form 10-K and 10-Q and in its quarterly report on Form 10-Q that the company filed this afternoon.

Actual results may differ materially from those expressed in or implied by the forward-looking statements. The company undertakes no obligation to update or review any estimate, projection or forward-looking statement. I would also like to note that Sientra uses its Investor Relations website to publish important information about the company, including information that may be deemed material to investors. Financial and other information about Sientra is routinely posted and is accessible on the company's Investor Relations website at www.sientra.com.

Today on our call, we have Ron Menezes, Sientra's President and Chief Executive Officer; and Valerie Miller, Vice President, Corporate Controller and Interim Chief Financial Officer. I will now turn the call over to Ron. Ron?

Thanks, Oliver, and thank you all for joining us today on our first quarter 2021 earnings call. I'm very proud of the Sientra team for the outstanding execution of our 2021 priorities in the first quarter. On our last call, I identified 3 strategic priorities and growth drivers for this year. First, fueling organic growth within augmentation and reconstruction by growing market share within existing accounts and adding new accounts, while accelerating our efforts to be a top 2 implant and expand our company in 2 years. Second, increasing our focus on innovation and executing our development pipeline. And finally, establishing a culture of focus and accountability. I'd like to take the next few minutes to highlight the exciting progress we have made on each priority. We'll continue the strong momentum in our Breast Products business during the first quarter, where we saw both revenue acceleration and market share growth.

Net sales for the Breast Products segment totaled $18.3 million, a record quarter, representing 47% growth year-over-year. We believe that the breast augmentation market grew in Q1, as more patients continue working from home and use their extra discretionary income towards breast augmentation purchases. According to third-party market research data, this market grew 8% in Q1 year-over-year, while our U.S. breast augmentation business outperformed versus the market and grew over 90% year-over-year.

Our U.S. reconstruction business, which includes both expanders and implants, grew approximately 19% over the same time. The growth in our breast business came from accelerating market share within current accounts and opening new accounts. We added over 200 new accounts in Q1 and ended the quarter with a little over 2,400 total active accounts.

Now turning to our commercial execution. In Q1 '21, we remained focused on accelerating market share growth through marketing innovation and executional excellence. We know that patients use company websites as one of the top 2 sources of information and research has shown us that 71% of surgeons would add a new breast implant brand if more patients ask for it. In the first week of January, we launched a successful marketing program, focused on driving consumer brand awareness and patient acquisition. This included a new brand campaign, a modernized Sientra website and a highly focused DTC campaign, which included social media and digital marketing.

Through this marketing efforts, we have reached now 3.4 million consumers with almost 90,000 web visits, yielding an exciting fourfold increase in traffic versus last year. The outcome of those website visits was 22,000 surgeons' searches and thousands of referrals directly to those surgeons. We hit the ground running by hosting our national sales meeting in the first week of January with a larger, fully trained sales force as well as a full relaunch of the Sientra brand and sales toolkit.

This readiness put our company in a position to capitalize on the market trends, an uptick in both cosmetic and reconstruction segments. If we look a little closer on the reconstruction market, the overall market started to come back in late first quarter, and we view our market expansion opportunity in this area as a significant mid-term driver. We're successful in expanding our customer base during the quarter by targeting to high-volume hospitals and leveraging our innovative Allox2 tissue expander. As a reminder, our pen Allox2 expander, is the only expander in the market that provides surgeons with access to the periprosthetic space for diagnostics simply and treatment of seromas, leading to less complications and reduced reoperation rates for patients.

We were recently awarded an innovative technology contract from Vizient, the nation's largest member-driven health care improvement company. This distinction recognizes the unique features and benefits of Allox2, and it makes the product now broadly available to all major hospitals in the U.S. performing reconstruction surgery. Sientra's field force is ready to go and they kicked off an accelerated promotion to pull-through the contracting 3,500 reconstruction hospitals with a heavier focus on the top 10% of those hospitals.

Now turning our focus on innovation in our development pipeline. We are very excited to announce our recent partnership with Butterfly network to promote their ultrasound device. Plastic surgeons can now make more informed decisions about the condition of their implants, using imaging information from the Butterfly iQ+. The partnership was in full display at the most recent American Aesthetics meeting in Miami. Sientra's medical affairs and reconstruction managers have begun promoting Butterfly iQ+ to hospitals and key customers.

We have also made significant progress on our next-generation tissue expander that builds upon our novel patent dual port design. The new expander will promote better patient outcomes due to its minimally invasive drainage system and will also allow for MRI and targeted radiation therapy.

As previously reported, we filed our 510(k) application for this next-generation expander last year and is presently under active review within the FDA. We'll continue to work with the FDA on this application and are optimistic for a commercial launch in the first half of 2022. When I came onboard 7 months ago, I was committed to accelerate Sientra's focus on our core business and removed distractions from our team. After rigor's process, we're thrilled that we reached an agreement with 1315 as a buyer for miraDry. This is great for our customers and for patients as miraDry is one of the mostly highly rated aesthetic treatment for hyperhidrosis. And we're committed to a smooth transition following closing to ensure a high level of customer service.

In terms of our expectation for the full year 2021 and based on our strong first quarter results, we have updated our guidance and expect to achieve breast product net sales between $72 million to $76 million, representing 31% to 38% growth year-over-year.

We'll now turn the call over to Val for a more detailed review of our first quarter financial results. Val?

Thanks, Ron. In the first quarter of fiscal 2021, Sientra achieved consolidated net sales of $23.2 million, a 37% year-over-year increase, with the increase driven specifically by strong performance in our Breast Products segment, continued high level of operational execution and cost efficiencies, and substantial progress across the strategic initiatives Ron outlined earlier.

Net sales for the Breast Products segment totaled $18.3 million in the first quarter 2021, representing an increase of 47% compared to $12.5 million for the same period in 2020. This was also the highest ever Breast Products quarterly sales number in company history. This represented sequential growth from Q4 2020, even though historically, first were sales tend to be lower due to seasonality of sales.

Net sales for the miraDry segment totaled $4.9 million in the first quarter 2021, a 10% increase year-over-year, largely driven by bioTip sales.

On May 10, we entered into an asset purchase agreement with 1315 Capital, where we agreed to sell certain assets related to the miraDry business for a total of $10 million in cash, subject to adjustment as provided in the purchase agreement and the assumption of certain liabilities. The sale is subject to routine closing conditions, and we expect to close within approximately 30 days.

Gross profit for the first quarter of 2021 was $12.3 million, or 52.9% of sales, compared to gross profit of $10.1 million, or 59.9% of sales, for the same period in 2020. Excluding the impact of our miraDry segment, which included unfavorable overhead absorption, gross profit for the first quarter 2021 was $10.2 million, or 55.4% of sales.

Operating expenses for Q1 of '21 were $22.1 million. This compares to $29 million in Q1 of last year, excluding impairment and restructuring charges. On a non-GAAP basis, adjusted EBITDA loss for the first quarter 2021 decreased by 66% to $5.3 million from $15.5 million for the same period in 2020. Net loss for the first quarter 2021 was $54.7 million, or $1.01 per share, compared to a net loss of $28.6 million, or $0.57 per share, for the same period in 2020. Net loss for the first quarter of 2021 includes a $42.7 million noncash loss related to the change in fair value of the derivative liability, related to the convertible debt of the company that was announced in the first quarter of 2020.

Turning to our balance sheet. We ended the quarter with $8.4 million of cash and cash equivalents compared to $55 million at December 31, 2020.

Turning to guidance for 2021. As Ron noted, we expect Breast Products 2021 net sales in the range of $72 million to $76 million, reflecting growth of 31% to 38% compared to sales of $55.4 million in 2020. We expect 2021 annual operating expenses to be in the range of $85 million to $90 million, compared to $101.1 million in 2020, excluding impairment and restructuring charges.

With that, I would like to turn the call back to Ron for closing remarks.

Thanks, Val. We are very optimistic about the remainder of 2021, and we expect to continue to accelerate market share growth by leveraging our unique strengths. They are as follows: our products to have unmatched safety profile, which is more important than ever to both surgeons and patients; our marketing and program innovation, including patient acquisition, surgeon education and our new partnership with Butterfly; and also the addition of reconstruction hospitals during a time when the market is bouncing back.

And now I'd like to open up the call for Q&A. Operator?

(Operator Instructions) Our first question comes from the line of Margaret Kaczor from William Blair.

So I want to start first maybe with sales rep productivity because it seems like it's really been climbing pretty significantly certainly versus '19 and even versus '20. So where is it today? Where do you think you can go? And do you feel a need to hire more sales reps to continue to grow at an accelerated pace? Or can that continue (inaudible) ?

Margaret, thanks for the question. First of all, yes, we did add 3 new PSCs. In the beginning of the year, we had a couple of recall managers as well. But from the sales side, we had 3 -- even with the 3 new ones, our productivity was close to $400,000 per PSC, so trending about 1.6 for the year, which is much higher than last year, we were about 1.2 in a little -- rounded up to 1.2 last year.

And then as discussed before, we do this territory by territory. So for example, we're looking at a couple of areas that as we get closer to $3 million hub business, but for a one rep, that's when it gives us inclination to split the territory.

So it's really systematic in slow assessing the current environment and current productivity. And obviously, as we accelerate our growth and our revenue, we're going to continue to evaluate the need to add more representatives. So right now, in the second quarter, we don't have any plans to add, but that's a quarter-to-quarter discussion with our operations and our head of sales. It's not a year-end or, again, a quarter-to-quarter discussion. So...

Okay. So as we look throughout the year, theoretically, we should start to see a hospital and recon start to accelerate, especially as hospitals reopen. That you guys still, I think, grew 19% in the first quarter. So how many hospital accounts are you assuming in guidance that you will be able to add and theoretically, that should drive more PSC productivity, I would think, just given the ASPs per kits.

Yes. The large majority of the accounts we added were at the cosmetics side, but we did add over 200, about 1/3 were hospitals, like a little more than that were hospitals, as we continue to grow. I think our key goal here is -- one, is go deeper in account as we add them because it does take sometimes 4 to sometimes as long as 9 months, we get -- we're pretty much -- all ex-dues now available in every account, not every account, every GPO. Now the PSC -- and working with the recon manager goal is how to pull-through that contract down from the GPO. And you go to that process, and sometimes it takes as little as 4 months, but some as long as 9 months to see your first sale in each account.

So it's a long-term thing that -- but we did add a lot of accounts last year that we've seen productivity already. So that's what we're looking at in the next 6, 9 months.

And are you assuming much of that guidance, I guess, from that in terms of some of these new contracts you have signed? Or is that more kind of a '22 thing?

Yes. We're building in that guidance that we are going to add more accounts from a hospital side, but also continue to drive our recon business as well. And part of that is obviously, as patients come back and more hospitals, which we've seen, starting to open up their doors for reconstruction or elective surgeries. So that's all build on our guidance for the rest of the year.

Our next question comes from the line of Richard Newitter from SVB Leerink.

Ron, this is Jaime Morgan on for Rich. I guess just on the guidance. It seems a little bit conservative. You raised it by the 1Q beat. 1Q is typically a seasonally lower quarter. So I was just wondering if you could talk about how you're thinking about the quarterly revenue cadence as we move through the rest of this year.

Yes. Usually, a seasonality from a cosmetic side, you have a very high second quarter. The number 2 quarters is either the first quarter or the fourth quarter and then as things drop down in the third quarter. So our expectation is that, obviously, we're going to go back to a seasonality for the cosmetic, which we have not seen, by the way, in the second quarter. It's still a very vast space, very busy offices of plastic surgeons.

But we are going to enter in the third quarter competing against our high numbers. Unlike most years, third quarter is always the worst quarter for cosmetic-specific plastic surgery, in this case. It Was not the case last year for the obvious reasons because of COVID in the second quarter. So we're going to compare against those two. So that's where we're looking at $72 million to $76 million. But really being sensitive of what is going to happen in the next 6 months. So...

So it sounds like the assumption then would still be to see your typical, like, strength in the second quarter and maybe something a little bit lower in the third quarter just from a seasonal perspective. And then obviously, 4Q is typically a little bit stronger as well. Is that the right way to be thinking about it just relative to the 18 -- roughly $18 million that you saw in the first quarter? Just trying to get a sense of whether we should be thinking about that dollar stepping down in the second quarter relative to the first quarter strength.

No. I think if you look at the second quarter and the way we started second quarter, it's still very similar trends that we saw in the first quarter, given some acceleration. So you see that the expectations from a high volume second quarter as patients get ready for summer, and then you can see the back off in third quarter. So we're, I assume, a seasonality back after second quarter. But obviously, again, second quarter is always a busy quarter for everyone. So...

Okay. That's helpful. And then I guess just between the 2 different market segments it sounds like the recon market is coming back a little bit. One is your -- what are your expectations for when that market should see some more normalization? And I guess, just kind of how should we be thinking about the 2 businesses and kind of what's contemplated in the $72 million to $76 million?

We see -- well, first of all, some of the teaching institutions did not see a whole lot of impact to their reconstruction surgeries, it's more the others hospitals, they did see an impact and they were closed for any elective surgeries. And those are now coming back. So we, obviously, see a slowdown in diagnosis and for mastectomies. So you're really -- I'm sorry, for surgeries. So you've seen the whole thing was backed up, so that's going to start coming in now as hospitals are open up. We're seeing more and more hospitals open up with some more interest in our expander in and our Sientra implants in hospitals.

And so, we see the next, again, 6, 9 months even from our recon accelerating in the second half, specifically, third quarter and fourth quarter in individuals that were on the sideline waiting to see what happened from electrosurgery. Now we'll be probably making that decision, was deceleration in Q3 and Q4 for reconstruction.

Okay. That's helpful. And then I guess if I just squeeze in one more. How is the CFO search process going? And when can we potentially expect to learn a little bit more about that?

It's going very well. We are hoping, shedding a target to get somebody on board by the end of June. That's the goal, depending on what this individual's commitments, but that's our goal right now. And in June beginning, or July-ish, that's what we're looking at. So...

Our next question comes from the line of Jon Block from Stifel.

Ron, maybe the first one, the -- I think, you alluded to 200 new accounts. It seems like a big number and accelerate notably from, I believe, what was 100 the prior quarter. So solid step-up there. Maybe if you can elaborate on the acceleration. Was there any, I don't know, change in comp plans or incentives to help aid that? And then if we think about the 2,400 active accounts, and I think you also alluded to, how do we think about that longer-term in terms of where that goes over the next maybe 12 to 24 months?

Yes. You're right on the money there, Jon. It is a double where we saw in the first quarter in regards to additional new accounts. It is one of the goals that Kirk, our Head of Sales, set is to a certain addition of new accounts for each of our PSC, our representatives. And we've seen the results of that. We're tracking how they're performing versus those goals and also certain guidelines with regards to number of calls per day, et cetera.

But keep in mind, we did add over 200 new accounts, but over 90% of our growth in the first quarter came from existing accounts. It's just existing accounts that had a low market share and they -- we expanded the market share. So a lot of the growth coming from existing accounts that were not the big were called the big whales or the Tier 1. It's really from accounts that had opportunity to expand, and that's what our PSCs did a fantastic job from executing there and expanding market share.

So that's a really way to go. From a total accounts at 2,400, it is like a 15% growth over last year. We're about a little over 2,000 accounts last year at the same time. So you've seen that acceleration. But the key thing is how do we ensure that accounts that are coming on board, stay with us. So we're close to about 60% reorder rate right now of accounts, and that's part of our goal. It's not just one order, but multiple orders in the future. So...

Got it. Very helpful. And then I'd use sort of the word rumor. But on the competitive landscape, there are some chatter rumors out there that certain businesses may be for sale. Just your thoughts on, I mean, does that further embolden what you've laid out is your road map, if you would, to a top 2 implant and expander company in 2 years? If we were to see something like that, that take place, does that bring into the equation, a certain level of disruption, which would even give you further conviction on your market share gains in coming quarters?

Yes. Jon, there's a lot of rumors out there from the competitors. We were looking at what can we do to really improve patient outcome. And that's where our focus in regards to innovation, on execution, and we've seen that from a commercial team, both the sale of the marketing teams did a fantastic job. And also, from our manufacturing as well. We have our plan in Wisconsin, now going 7 days the week all the time. It actually -- it will still have production abilities there.

But the goal is how do we control where we can focus on and we saw that at the last aesthetics meeting in Miami 2 weeks ago. Sientra was the center as we walked in the floor. We had a lot of surgeons coming by our booth and talk to us. They know Sientra is committed to plastic surgeons. They know that Sientra is committed to improve patients' outcome. And that's why they are seeing the difference right now versus the other companies out there that have different questions about their future.

So we're really focused on what can we control right now, which is accelerating our growth, accelerating our market share, taking away from competition and find a way to support patients and surgeons.

Got it. That's helpful. One last one for me. Val, maybe over to you. I want to make sure I heard some numbers correctly. So the GM's, I think, were 53% in print or 52.9%. I think you said maybe specific to the breast business, it was 55% unchanged, if I had the right number there? And then maybe talk to us going forward, do you still think you can exit the year in the high 50s and is mid-60s still attainable when we think about the back part of '22?

Yes. In terms of gross margin, the Breast Products business was 55.4%, as you mentioned. We still expect to end the year in the upper 50s, and we have a target for next year in the 60s.

Our next question comes from the line of Kyle Rose from Canaccord.

Great. Obviously, strong performance in the breast side. I wondered if you could just talk a little bit about what you're seeing internationally. Japan was a new entrant in 2020. How has that trended to start this year? And then expectations for any additional new countries, I think, in Canada, when we think about over the course of the next 6 to 9 months?

Kyle, we came in at close to $600,000. So it's kind of in line of our expectations, which will be in line for the whole year as well at the end of the year. In regards to enter the new markets, we're still waiting for Health Canada. We are assessing different markets within the next 6 to 12 months. So we have a team that's looking at how do we get into different markets where there's a possibility of a good margin for the product. Obviously, we discussed that in the past. They're some areas and regions where the margin is too low for us to get into. But there are some areas that makes sense for us. So that is part of our expansion from adjacencies to look at different markets.

Great. And you talked a little bit about the expectations for recon, when we think about the growth in the Q3 and the Q4. Maybe help us just better understand how much of that comes from the backlog you're seeing in the channel as far as recon accounts you have now that are going to have new patients coming in that were not diagnosed or not operated on versus just progress as far as bringing on new accounts. Just help us understand those dynamics in recon.

If you look at Q1, the majority of our growth in reconstruction actually came from what we call a Tier 2, which is the accounts that have been with us, they already were purchasing from us, and they just really did extremely, extremely well.

And I have an example of a well-known academic tuition institution in the southeast that we were able to flip 100% to Sientra, but it took a while, and it's taken a while to get the inventory they had for the previous company and get the residents and the surgeons training our product. So that's why I said in the beginning, this is a 4 to 6 months, sometime 9-months process. After you get the hospital on board, it takes about 4 to 6 months to get everything moving. So that's why I'm thinking Q3, Q4, but the majority growth for Q1 still came from existing accounts, just like the cosmetic side.

Okay. And then the last one for me. I know you talked about overall sales rep metrics. I appreciate those numbers. But you did talk about also adding on 3 reps. I think in a couple of your key states, if you think about Florida, the Great Lakes areas there. Maybe just -- how has the underlying productivity in those new reps trended? And I guess, what will trigger you to bring on an additional cohort when you think about the back half of this year or even into 2022?

Yes. Our PSC in Nebraska did extremely well in the first quarter. Obviously, the individual has a lower base because the person is growing the business. In Florida, if you look at the top 3 states, exactly what you think from -- actually, New York is not top 3. It's really #1, California; #2 is Florida; #3 is Texas; and New York's right after from cosmetic and augmentation. So those are the areas that we usually assess territory by territory. And our -- kind of our metric goal is if a territory gets closer to $3 million per PSC, that's when we want to assess and start thinking about dividing the territory. And then you're also going to have, too, $1.5 -- or close to $1.5 million.

But the way we're moving and growing fast will be assessed every quarter. And if there's a need to add more, we'll be adding more. But probably, I will not be surprised if those 3 or 4 states, if you add New York, the states to be looking at opportunities to add a PSC, if we see territories against the $2 million mark.

Our next question comes from the line of Alex Nowak from Craig-Hallum.

Great. So the company really solidified this shift to a plastic surgeon focus organization with the miraDry sale. So Ron, you mentioned a new expander, the Butterfly partnership. But what are the products you develop internally using your manufacturing facilities that you have and put through the existing sales channel of the plastic suite?

Yes. So I shared in the beginning, some -- where we're doing from a new expander and new technology for next year. Obviously, Butterfly brings us a value-added that brings the safety in the forefront. It is the #1 thing that patients -- potential consumers look for on the researching, cost would be #2. It used to be cost #1, safety #2. Now it's flipped.

And that Butterfly network ultrasound device gives us the ability to give that surgeon an ability to assess the implant or assess where the patient is, et cetera, and supports our 10- to 20-year warranty, which is one of the things we talk about in regards to 10-year data is the safety of our implants.

Now there are products we're looking as well in regards to within breast augmentation and within reconstruction as well. But also starting at the end of this year, next year, we'll be looking at is anything within plastic surgery that makes sense for us to get into. But everything we'll be looking at is started with our core business, which is breast augmentation and reconstruction. Then we'll look as any growth products out there that we can invest that make sense for us. And I've shared in the past, a lot of those ideas are coming from surgeons. They have ideas and products. A lot of them have prototype. They just need help from the development, they need help from commercialization.

So we're assessing those ideas coming in as well in addition to look at different things outside our expertise. But our focus right now is really the core business. The core business, we are very busy with it, lots of opportunities to take share away from the competition, lots of opportunity to enhance our current offerings, the core products. And then we start thinking, how do we expand our offerings outside the core business, most likely in '22 and in 2023.

That's great. Makes a ton of sense. And then you said that Sientra wants to become a #2 implant through years, what would the breast product revenue be to hit that #2 provider status? And then a third question here is just what are the DTC programs you have planned for the rest of the year?

Yes. I think if you want to be #2, you've got to be north of $100 million in U.S. sales. Keep in mind, a lot of our -- the competitors we have outside U.S. and are focused in the U.S. So we have to be thinking how do we get to the acceleration above the $100 million. And that's a key goal for us sooner than later.

On the other side, from marketing, we're transitioned and continue to leverage our great digital work, our great social media work on getting patients to ask for Sientra now into physicians' and surgeons' education. Peer-to-peer education help them understand the uniqueness of our products, uniqueness of our implants, uniqueness of our expander and do a lot more peer-to-peer education in second half and really expand our name brand out there in front of surgeons as well to support our PSCs, support our reconstruction managers. And that will be the shift. Again, we're not going to walk away from the consumers. We're going to continue to do everything we're doing for consumers, but we're going to be adding a lot of peer-to-peer education in the next 6 months.

Our next question comes from the line of Chris Cooley from Stephens.

Just 2 for me. First, when you think about just expanding account base, so very impressive there given a little over 2,400 active accounts now. And so if we think back kind of pre-Brazil and if I'm thinking you were running what, at around 4,000 accounts here in the U.S.

So one, could you give us a road map for kind of how you see that 2,400 accounts kind of scaling to help you achieve the goal of becoming the #2 or potentially a top 2, let's say, player here in the U.S.? And then so you can also maybe characterize where you are now within the existing account base, just in terms of share, help us kind of think about that existent 2,400 account based kind of where you are there relative to where you could go in terms of growth if you just drove deeper within that existent 2,400? And I've got a quick follow-up after that.

I'll try to answer your question because it sounds like you're -- it was hard to understand because your phone was cracking up a little bit. But from how do we go and grow our 2,400 accounts. And #2 is our market share. Yes, merger share is an interesting thing because we got the data from the different societies. And they are -- one society of plastic surgeons had the market down 5%. The other one had a market down a little over 30% in 2020 versus '19.

So it's hard to figure out, but we were able to get data from run on solutions, is a team that is able to track live data on 380-plus surgeons so they'd look -- they have live data on 380-plus surgeons. And what they share with us, the market was down 5% in '20 versus '19. And the market was up 8% in the first quarter this year versus last quarter. So if you're utilizing that data and adding as well as not just surgeries augmentation, but also anyone that went in for a revision, which is you got to go in and for some reason, you'll make a decision -- a patient make a decision to get a new implant. You add all that, we actually went from a 6% share to a 9% share in the first quarter of this year. So the 3 share point increase in one quarter. So that's why that data is kind of interesting because it's live data 380, and it's extrapolated to the market and it's a plus/minus 5% from confidence interval.

So that is whereabout 9% now. So where do we -- how do we grow to be a #2 is, one, it continue to add new accounts, but it's just like not adding new accounts, but also the ability to sustain those accounts to make sure they're reordering as well; and continue to accelerate our expansion of market share within our existing accounts. And that's where a lot of our growth was in Q1. Like I said, 90% came from existing accounts.

So we have programs now, marketing initiatives, that reward surgeons that expand our market share. We have initiatives that reward a new surgeon that comes on board, fresh out of residency. So those are programs to get that surgeon used to Sientra. And we also have programs to have surgeons try out Sientra to see and be comfortable with our implants and comfortable with expanders as well. So those are kind of things we do to expand our market share. And once they see the outcome, they see the patient outcome, how happy the patient is with their Sientra implants for a fact that large majority of over 90% of our patients that once they see themselves with the Sientra implant, they are very satisfied what the outcome of that surgery.

So those are the kind of things we're doing to get the surgeon comfortable. And again, part of their goal is to expand account. So we don't have a specific goal of we need to be the 3,000 accounts, 4,000 accounts. I prefer to have 2,500 accounts with higher market share, like our Tier 1 to have a 70%, 80% share, then have 4,000 accounts that we are somewhere between 5% to 15%.

Now the challenge to get a market share for each account because a lot of -- most surgeons carry 2 manufacturers, sometimes 3, majority of them carries 2 manufacturers if they don't share that data. And so, we -- it's hard to figure out if our share is 5% or 20%, but we know that the acceleration of some of those offices are buying from us once they've seen the patient outcome.

So I'm hoping I dared to answer some of the questions. It was hard to hear your question. Did I miss anything?

No. No, no, I appreciate that. That was a great response, and I appreciate all the color. And just maybe lastly for me. So I guess I'd be the one to ask a little bit here about miraDry at the end. I'm just curious, the operating expense guidance for the year that you did provide of $85 million to $90 million, I'm assuming that's still inclusive of miraDry's contribution here in the first quarter. Or is that excluding miraDry?

And then similarly, the $10 million sale price, the company paid $24 million upfront and had $14 million in milestones performance based on all of which had been paid out. Just curious if you could elaborate on the process there for the valuation on the sale of miraDry. Completely support the focus on the breast aesthetics, but just trying to level set, one, the valuation and then two, what was or was not implied there in the OpEx guide.

Yes. Let me answer the second question. I'll let Val answer the first part of your question. Regards to evaluation, we did look and talk to at least 2 companies, actually a little more than that and discuss what makes sense for miraDry companies that could bring on board. And obviously, as you discussed, that you also assess the fit. You assess also the valuation economics of it. And at that time, we're looking what made sense from our revenue goals for 2021. And the $10 million seem to be a proper fit for where we're at in 2021.

At the same time, it is really the goal is place miraDry with a company like 1315 has set up a great team to take over miraDry and so we can refocus on 100% on breast augmentation and reconstruction. It gives that freedom for us to do. We may not have a commercial team in the U.S. dedicated 100% to miraDry, but all the shared services we're working very closely and supporting miraDry.

Now after we close this deal, we'd be able to dedicate 100% to Sientra and not be distracted by all the different activities of miraDry. And in the meantime, miraDry is going to have a fantastic support from 1315, a great team that's going to focus 100% on capital equipment, 100% tip sales, 100% are customers and their team, which is being really a great advantage for them. Val?

In terms of OpEx, we still expect our range of OpEx to be $85 million to $90 million. We had nearly moved all of the G&A into our normal operating inside the shared service center. So we're not going to see a big downturn in OpEx because of the elimination because we had already eliminated most of the costs during the process of the 2020 initiatives taking place.

Our next question comes from the line of Matt Bullock from Maxim Group.

This is Matt on for Anthony Vendetti. I was hoping you guys could touch a little bit on the cadence you expect for OpEx going throughout the rest of '21. Do you expect slightly higher in second quarter and then scaling down a little bit in the third and coming back up on higher sales in the fourth? And then if you could touch on your production capacity and if you foresee NIM to increase your manufacturing going forward to support growth.

In terms of the OpEx cadence, we expect the quarterly cadence to be pretty flat over the next 3 quarters, so about even.

And in regards to manufacturing in Franklin, Wisconsin, the team have done a great job improving yield, improving and lowering the cost of manufacturing implants there to the point that we're in really good shape for the future in regards to our cost of goods sold. But that we're making today, we're not selling tomorrow. We're making today, we're probably selling this fall or end middle of fourth quarter. We're still selling inventory from last year. So that's an outstanding performance. And like I said before, we are working 7 days a week right now. I'll have 2 shifts right now going on. We have capacity to add more shifts. We added additional space right now right there in Franklin for office space.

So we're in really good shape right now from our manufacturing facility and making our implants. And obviously, we'll make our expanders in Montana, but really well supporting the demand that's being created by the commercial team.

At this time, I'm showing no further questions. I would like to turn the call back over to Oliver Bennett for closing remarks.

Thank you, operator. We would like to thank everyone for joining us on our first quarter 2021 earnings call. As Ron mentioned in his closing remarks, we are very optimistic for the remainder of 2021 and look forward to updating you all on our progress at our second quarter earnings call. Wish you all a wonderful day. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.