Glaukos Corporation
Q3 2016 Earnings Call Transcript

Published: 11 Nov 2016

[Operator:]

Welcome to the Glaukos Corporation’s Third Quarter 2016 Financial Results Conference Call. A copy of the company's press release issued after the market closed today is available at www.glaukos.com. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] This call is being recorded and an archived replay will be available online in the investors section at www.glaukos.com. I would now like to turn the call over to Sheree Aronson, Vice President of Investor Relations.

[Sheree Aronson:]

Hello, everyone. Joining me today are President and CEO, Tom Burns; Chief Financial Officer, Rich Harrison; and Chief Commercial Officer, Chris Calcaterra. Following prepared remarks by Tom and Rich, all three gentlemen will take your questions. Before we begin, let me remind you that all statements other than statements of historical facts made on this call that address activities, events or developments we expect, believe or anticipate will or may occur in the future are forward-looking statements. These include statements about our plans, objectives, strategies and prospects regarding, among other things, our iStent products, our pipeline technologies, our U.S. and international commercialization efforts, the efficacy of our current and future products and our competitive market position, financial condition and results of operation. These statements are based on current expectations about future events affecting us and are subject to the risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Therefore, they may cause our actual results to differ materially from those expressed or implied by forward-looking statements. Please review today’s press release and our recent SEC filing for more information about these risk factors. You’ll find these documents in the Investors section of our website at www.glaukos.com. With that, I’ll turn the call over to President and CEO, Tom Burns. Tom?

[Thomas Burns:]

Thank you, Sheree. Good afternoon to everybody. Thanks for joining us today. Our third quarter 2016 results reveal another quarter of really solid performance. With third quarter net sales of $29.6 million up $10.6 or 56% versus the same period one year ago. So, we've now delivered 13 consecutive quarters of at least 40% year-over-year sales growth and in light of these results we are raising our 2016 full-year net sales guidance to a range of a $109 million to a $111 million. Our third quarter results show the demand for iStent is robust and growing fueled by a burgeoning number of trained surgeons and a heightened emphasis on the part of these surgeons to recommend iStent's to the patients. We believe these surgeons are motivated by the abundance of real-world clinical data that continues to confirm not only iStent's exceptional safety record by all sorts of ability can to consistently delivery sustained reductions in IOP. We view the strong iStent adoption trends as a tangible indication of surgeon's interest in the longer-term potential of Micro-Invasive Glaucoma Surgery or MIGS. We found that the MIGS category to change the way Glaucoma is treated and disrupt the $5 billion global glaucoma market. To accomplish this, our team is acutely focused on four core growth objectives which are

[Richard Harrison:]

Thanks, Tom. Good afternoon everybody. As Tom reported earlier, our net sales rose 56% to $29.6 million versus $19.0 million in the same year-ago quarter. Rose was driven primarily by strong US sales which provided 84% of our increase versus the year-ago quarter. US sales represented 91% of total net sales in the 3rd quarter of 2016 compared to 95% in the year-ago quarter. This reflects the continuing progress we're making and expanding our international sales and market penetration. Increased unit volume worldwide was primarily responsible for the rising third quarter net sales driven by an increase in the number of train surgeons and higher overall iStent utilization. For the third quarter of 2016, our gross margin was 87% of sales versus 83% of sales in the third quarter of 2015. The increase reflect higher sales relative to our fixed manufacturing cost and intangible asset amortization as well as the suspension for 2016 and 2017 of the medical device excise tax, which was included in our 2015 cost of sales. Turning now to operating expenses, they rose 42% to $24.7 million in the third quarter of 2016 versus $17.4 million in the year-ago quarter. Our operating expenses continue to increase as we have foreign subsidiaries and domestic sales marketing and administrative personnel and also increased our investment in worldwide marketing programs. So, overall we finished the third quarter of 2016 with net income of $1.2 million or $0.03 per deluded share compared to a net loss of $2.1 million or a loss of $0.07 per deluded share in the third quarter of 2015. I'd like to remind everyone, while our exceptional topline performance led to profitability in the third quarter this year. It's important to remind you that we may not remain profitable as our focus remains expanding the market penetration of iStent globally and rapidly progressing our deep and diverse pipeline. On the balance sheet at the end of the third quarter of 2016, our combined cash, cash equivalence and short-term investments stood at $93.6 million compared to $91.1 million at the end of the year 2015. And lastly, just to repeat as Tom indicated, we have revised our 2016 net sales guidance to a range of $109 million to a $111 million. This implies a 2016 growth rate ranging from 52% to 55%. I'll now like to turn the call back to Tom.

[Thomas Burns:]

All right. Thanks, Rich. And so to conclude our prepared remarks, we're pleased to deliver another quarter of solid growth to shareholders. Our results demonstrate the momentum that continues to build behind our flagship iStent technology. We believe that this strength is the reflection of the reliable and sustained IOP lowering performance iStent provides glaucoma patients and the surgeons to care for that. Our growing team continues to push our injectable microscale pipeline forward and expand our global footprint. We see tremendous opportunity for Glaukos to redefine the $5 billion global glaucoma market and truly transform glaucoma therapy. So, with that I'll open it up to questions. Operator?

[Operator:]

[Operator Instructions] Your first question comes from the line of Mike Weinstein from JPMorgan. Your line is open.

[Unidentified Analyst:]

Hi, this is Robby and for Mike. Congrats on the great quarter.

[Thomas Burns:]

Thanks, Robby.

[Unidentified Analyst:]

Maybe just to start out here, this is another great quarter in terms of growth in the US on top of a pretty difficult comp. and so, maybe you could talk about some of the trends you're seeing in the market, it does it have to do anything with the great data sense percentage at ASCRS in early May? What's exactly driving the growth in and where is the incremental usage coming from. Is it I know you're adding new doctors up 48% year-over-year but is it also the increased usage at each practice? Maybe just a little more color would be helpful.

[Thomas Burns:]

Very happy to, Chris. Will you take this one?

[Chris Calcaterra:]

Sure. Hey Robby. I would say yes the data that was shown in New Orleans at the ASCRS as well as the data that was shown in Chicago at the AO does certainly help stimulate the growth of iStent in the US. We continue to guard our new customers. We continue to focus on high volume cataract surgeons and we continue to increase adoption which within the customer base that we've already established. So, all of those things have contributed to yet another solid quarter for sales in the US.

[Unidentified Analyst:]

All right. Maybe a follow-up here. The street coming into the quarter had you guys growing about 26% next year. A lot of data I think is conservatism around some of your new competitors who are entering the market. You touched on this in the prepared remarks. But with annualized rep productivity over $2 million now, can you without I know you're not providing full guidance next year. But maybe you'll help us think about how we should consider current trends going into next year and how sustainable are they? Thanks.

[Richard Harrison:]

Hey, Robby. This is Rich. I think as you said, we're not prepared at this point to make any statement on our guidance for 2017. You can expect that from a sometime in early 2017, date to be determined. But I will say that there's we don’t have any expectation that our growth trends and some of the success were having would not continue, they will. We feel very positive about our performance and expect it to continue strong. I just not at this point we're not a place where we want to give you any kind of percentage readout.

[Unidentified Analyst:]

Okay. Maybe one quick housekeeping question, then I'll drop off. How many reps did join the quarter with? Thanks.

[Richard Harrison:]

52, which is in line with where we were in the second quarter. And those do not include the additional teaching institution reps.

[Operator:]

You next question comes from the line of Bob Hopkins from Bank of America. Your line is open.

[Bob Hopkins:]

Hi great, good afternoon. Can you hear me okay?

[Richard Harrison:]

Hey Bob, how are you?

[Thomas Burns:]

Hi, Bob.

[Bob Hopkins:]

Hey good. Good afternoon. So, congrats on another good quarter. Just a couple of things I'd love to touch on. First, I appreciate your commentary on iDose and getting look at some of the data in 2017, maybe you could just give us a sense as to what kind of need to happen to make that more sort of mid year versus end of the year versus beginning on the year, just want to get a better sense as to when throughout the course of the year we might get to see the data?

[Thomas Burns:]

As we’ve said along Bob that we expect to have the best case we would have, we read out the three month data in 2017, so we began enrolling the trial in earnest in second quarter of this year as you know. Several months in advance of what we thought we would surely be, so I’m really proud that we were able to get approval and move through the FDA with such repetitive. So that’s very, very positive and so we’re currently enrolling will have to have our last patient out, will have the three month data well unmasked, we will prepare and we will make it available and disclose it. And if I’m going to give you any further guidance it certainly would be towards the later part of 2017 as the best case more than towards the former or towards the near part of 2017.

[Unidentified Analyst:]

Okay that’s great, thank you for that color I appreciate it. A couple of little things, again on the reimbursement decision being finalized, as we’ve thought about it in our model we’re sort of thinking that somewhere in the neighborhood of 4100 to $150 price increase was kind of a reasonable way to think about it when you go through all the puts and takes and the amount of the magnitude of the increase and I don’t know if you want to comment at this point, if that’s a reasonable range to think about in terms of the price increase for 2017? But that’s kind of our early consideration in our model, is there something fraud with that logic at this point?

[Thomas Burns:]

I probably wouldn’t comment on whether it’s fraud or not or how reasonable it is. What I would say, you see what’s in front of us and there is an incremental opportunity here and I think that challenge in the opportunity for us is to equitably address our customer who we clearly want to have take advantage of this pricing adjustment. To understand the competitive landscape to figure how we can gain additional traction of the market. And then to figure out what will be an appropriate upgrade as well for our device reimbursement. So, as you can imagine we’re thoughtfully preparing our approach and when we would execute that next year and I’ll ask you to stay tuned, we can get quite specific when we have that available.

[Unidentified Analyst:]

Okay that’s fair. And then just one last one, I think I know the answer to this, probably just a little bit of conservatism on your part or just to make sure I’ll ask the question on the Q4 guidance at the midpoint, I think that’s kind of played a slight downtick from Q3 levels obviously every quarter for quite a long time you’ve been increasing. I assume that just a little bit of conservatism on your part or maybe is there something unique about Q4 just wanted to check it out, I assume it’s just conservatism?

[Thomas Burns:]

I mean, I think a little bit of both Bob, so certainly we’re consistently conservative in our guidance we’ve been along, we’re implying a 52% to 55% growth rate for the year. Now for the quarter it would imply in the low to mid 40% growth range which is not surprising given a year ago when we looked at our fourth quarter of 2015, we grew by about 44%. So given that occurrence a year ago we think it’s appropriate to take that into account and be conservative in our guidance for the quarter and the end of the year. But it certainly in no way any indication of any change in our optimism or expectations of continued strong performance.

[Unidentified Analyst:]

Perfect, thank you.

[Operator:]

Your next question comes from the line of Brian Weinstein from William Blair, your line is open?

[Brian Weinstein:]

Hi guys thanks for taking the questions. Tom just to know we’re still bringing back home so when we get back home we know. Question for you kind of OpEx you had the lot of international markets going direct, how should we think about sort of factoring in the incremental expense kind of go-forward I assume it’s not in the numbers totally from the third quarter. And then how do we think about what you guys ideally like to target U.S. in terms of revenue split as you kind of get further out, over the next couple of years?

[Richard Harrison:]

Yes it’s really tired Brian and congratulations on the card I throw that in there. I don’t think I’m going to put any brackets around any percent increase ranges I do want to continue to make the point that we’ve made for quite a few quarters now that we’re investing aggressively in our business. You heard the list of countries that Tom read off that we’ve hired sales represents or continuing to pursue those and we may even consider more. So we will continue to add to our SG&A and continue to see some increases in our R&D spending as well. So watch for that to continue. I think there was a second part to your question?

[Brian Weinstein:]

Kind of longer term in the U.S.?

[Richard Harrison:]

Yes, I’m pretty pleased we’ve already gotten to 9% international MIGS and I expect that to continue to grow to some degree over the next year, we would like to get to in the next year to two years to three years maybe down to a 85% U.S., 15% international that’s a target it just remains to be seen how quickly we’ll get there and where our fastest growth trends are coming.

[Unidentified Analyst:]

Got it. And Chris for you, you guys have targeted 116 kind of docket at the quarter it sounds like you guys are still well kind of in the -- you’re going faster than that do you expect that you’re going to be able to continue that or as you get competition in the market do you expect that your kind of current reps are going to have go back defend a little bit for me not be able to see as much as new surgeons coming on board, how do you think about that?

[Chris Calcaterra:]

No Brian I think that is a good assumption and you’re right we’re adding 50 to 60 per month. We’re quite please with that but as we get deeper into it and with competition those numbers may change a bit.

[Unidentified Analyst:]

And then last thing for me, I know people try and talk about 2017 and what I’m curious about it the typical seasonality that we see Q4 typically being a very strong quarter for procedures, Q1 being one where you historically had talked about a little bit of softness, you’re through that last year but should we be thinking about kind of typical seasonality or is there anything that you guys have learned over the last year that may change the way you think about how seasonality impacts your business? Thank you.

[Thomas Burns:]

I think we continue to expect at some point that the underlying seasonality in the IOL business will show up more than it has today. If we look at seasonality last year our results we had in 2015, we had 20% of our sales in Q1, we had 25% and then 27% in Q1 and Q2 and 28% in Q4 so that was last year. And so that really kind of suggest that there were some seasonality there but not quite as strong as we might have expected. And then this year we had a very significant Q1. I think the [indiscernible] is still out on seasonality, we know it’s going to happen at some point in time but I think we’re still growing so rapidly it’s really hard to pin seasonality directly to our sales trends.

[Unidentified Analyst:]

Thanks for taking the questions.

[Operator:]

Your next question comes from the line of Matthew O'Brien from Piper Jaffray, your line is open.

[Matthew O'Brien:]

Good afternoon, thanks for taking the questions and I really do – my time. I think I may have misheard Rich, did you say international was about 9% of revenue, it’s about $2.7 million is that right?

[Richard Harrison:]

Yes.

[Matthew O'Brien:]

Is that entirely inject sales or are there some traditional iStent sales in there?

[Richard Harrison:]

No, there is both.

[Matthew O'Brien:]

And is it skewing one way or the other the adopting inject faster traditional iStent?

[Richard Harrison:]

It’s probably, it’s skewing more as we continue to launch in these new areas it’s starting to trend more the iStent injects.

[Matthew O'Brien:]

Got it. And I really don’t want to split here because that performance has been fantastic but just domestically the two year stack continues to come down kind of quarter after quarter. And so, my question is are you getting, you take lot of the loading through from a physician perspective I know you’re about 40% penetrated at this point of adoption you go after, but have you think loading through or conversely what’s teaching hospital focus you think that you can sustain this level of kind of two year stack as you access some of these teaching hospitals maybe – give us a sense for the type of volume that some centers hold of the overall market what’s this new push kind of access for you guys?

[Thomas Burns:]

Let me try and address this we’re quite pleased with the growth that we continue to show, I think that third quarter was up over 56% versus I think we’re in the 40s last year. So, we’re feeling really good about that. I want to address teaching institution portion of your question. Certainly that opens up additional potential revenue sources for us and more than anything it’s a strategic way to alignment with the teaching institutions as well as with the people we’re going to those programs. So as they come out into the ophthalmic world they are familiar with MIGS and they’re ready to start utilizing the product as soon as they get placed into their practice. I think it’s a great situation where we created this category and we’re able to do such a program and that MIGS has really forefront of these ophthalmic teaching institutions. There is certainly going to be revenue associated with these but I think it’s more of a long term play then the short term play.

[Chris Calcaterra:]

And what I would say Matt, just you’re needing to take a little bit of a challenge to the stack growth presumption that you’ve taken. We saw 44% growth fourth quarter last year that rebounded into the mid 50s and beyond, I think we were 60% second quarter. So we actually saw some rejuvenation and really some prolific growth subsequent to that fourth quarter of last year, I think the payoff is coming from these high volume cataract surgeons we continue to bring them in the MIGS that are fueling sustained growth and we expect that to continue throughout this planning period. If you look at where we are, we are still in the relative early innings of being able to convert these high volume cataract surgeons to become kind of ubiquitous of users and so I think the promise for continued sustained growth, the fact that this is an embryonic market place the fact that competitors are entering in which are going to bring additional revenues and resources to build makes as a brand and as a standard of care, all potent really substantial growth for us for the next several months and years.

[Matthew O'Brien:]

Okay, I like to hear that, just one more on the standalone application and forgive me I am going up a memory here, although it’s a theory, but I think you started enrolling the 75 patients was it kind of Q2 of last year and you're just completing enrolment now. First of all is that right and then as you are broadening it out for the 425 patients in total, are you going to add a bunch of new centres or is this going to be a very long enrolment cycle we shouldn't anticipate?

[Thomas Burns:]

Yes so that's a great question and I think I had the opportunity to address this previously which is, so what I would tell is that this is kind of normal course for the FDA. This is a brand new order shared indication in a new marketplace and they haven’t made it easy on this when you look at the inclusion/exclusion criteria. And so it's always kind of a herculean effort in the first phase of the trial why you established safety before you enter into a far more liberal typical phase which will give you more open field running. So we experience the same thing when we first started rolling our combination cataract trial back in the mid 2000, so the FDA gave us some pretty herculean inclusion/exclusion criteria in the initial phase. So what our challenge and our opportunity is to continue to liberalize by filing amendments to open up the criteria. And we have the three months safety date in hand math then will approach the FDA. I think with some substitutive data and arguments to be able to fully liberalize the pivotal phase which should allow us to enrol at a far more rapid rate. So that would be one key, the other key certainly would be investigators right, so we will clearly have far more opportunity to have far more investigators available, eligible and selected for the expanded phase of pivotal portion.

[Matthew O'Brien:]

Very helpful, thank you.

[Thomas Burns:]

Okay. You're welcome, thanks.

[Operator:]

Your next question comes from the line of Chris Lewis from ROTH Capital Partners. You line is open.

[Chris Lewis:]

Hi guys. Good afternoon and thanks for taking the questions.

[Thomas Burns:]

Hi Chris.

[Chris Lewis:]

Wanted to start on just the number of certains come on board here obviously the growth remains really strong, but less than half of your kind of target 5500 surgeons sell out their stuff, I guess my question is really just given the clinical and economic benefit now for those physicians that haven't adopted MIGS and iStent at this point. What do you see as kind of biggest barrier for adoption within that group?

[Chris Calcaterra:]

Hi Chris, it's Chris Calcaterra. How are you?

[Chris Lewis:]

Doing well. How are you doing?

[Chris Calcaterra:]

Good. So when it comes to devices I think there is always a resistance to change into adopt new technology. There is a vast majority of people out there they just want to wait and see and don't want to jump on the bandwagon early. There is a variety of reasons including the one I just gave you. It could be it's a high volume cataract surgeon who just doesn't want to change his course of action during the day to include another procedure. There is a variety of reasons and I would say that the adoption curve with this technology is not that just similar to other adoption curves with new device technologies. So I am quite pleased with the pace that we’re going at. It's what we expected, it’s what we planned for and getting 60 or so, 50 to 60 surgeons trained per month that's very much in line with what we anticipated at this point.

[Chris Lewis:]

Okay, great and then in Japan it sounds like you continue to expect the reimbursement by the end of this year. Now how should we think about the rollout commercially in 2017, any commentary, I guess just around number of surgeons trained, their cases, any kind of expectations you can provide there will be helpful?

[Chris Calcaterra:]

Sure, we will follow the same course of action that we did here in United States with our three step training process. I would say, I would expect that the adoption in Japan will be slower than it has been in the United States, just because of the way that they practice medicine there. We are going to spend an extra amount of time with the glaucoma specialist there before moving on to the comprehensive ophthalmologist and that's just a cultural thing and I think therefore, well I plan on Japan being a very robust market for us. I think the uptick in sales will be a little bit slower there than what we have experienced in United States.

[Chris Lewis:]

Rich, may be a question for you gross margins ticked up more than 200 basis points sequentially, can you just kind of talk about elaborate on the drivers of the margin expansion there and then looking forward is just kind of a normal run rate to expect and in a sustainable level going forward?

[Richard Harrison:]

Yes, I wouldn't read too much into the increased 87% versus the last couple of quarters that have been around 85% to 86%. We are going to have some variability in our margins overtime based on product mix, geographic mix, may be even operational factors such as everybody knows we moved into a new facility here in the fourth quarter in October, late September and we have transitioned much of our manufacturing, there are still some with the old facility, but most of its moved here. And we are getting everything setup, there could be some inefficiencies in the fourth quarter, don't be alarmed or not, I'm not expecting anything significant, but it could be enough to move the margin around a little bit. So I'm still comfortable saying that you guys for the foreseeable future ought to be looking at the – I’ve always low to mid 80's, I still think that's right more toward the mid 80s that's where we have been performing for the last few quarters.

[Chris Lewis:]

Okay guys. Congrats on a great quarter.

[Chris Calcaterra:]

Thanks a lot.

[Operator:]

Your next question comes from the line of John Block from Stifel. Your line is open.

[John Block:]

Great guys, thanks. Good afternoon. I appreciate you're taking the questions. I'll just ask two, may be any thoughts about the timing of the price increase in other words I may be don't want to disclose what you are thinking in terms of the – you now, but should we expect that the to be in place for all 2017 or do you need a little bit more time to see what CyPass is doing and already with the price increasing coming anything in regards to the cadence of quarterly sales, in other words should we expect any sort of a pull forward into 4Q with some of your accounts ahead of that price increase?

[Thomas Burns:]

Yes, so what I would say John this is Tom, is we currently are looking at this kind of the favorable GMS policy. We are trying to figure out exactly when and how to implement. I probably will avoid giving any specifics on timing one because we haven't formally determined when that will be and because of that I can't give you any real insight or granular revision of what would happen with any load in, I would certainly expect that whatever months we chose to have a price adjustment that there certainly will be some inclination for some customers to buy in at some level prior to the initiation of the price increase. But in terms of timing, in terms of disposition and distribution of that incremental value to the total amount for this HCPCS code I can't give you anything granular.

[John Block:]

Okay, that’s very helpful and then may be Tom just to stick with you for a moment, you mentioned for all host of reasons, many reason why you’re very confident in your embedded position. I'm just curious with CyPass approved and inarguably coming to market sometimes soon, anything you guys are doing with your sales team proactively, with your customers in terms of reaching out to them and as you said earlier may be hey equivalent, efficacy as iStent, but from a safety profile or may be in theory anything you guys are doing from an outreach to educate them, inform them of CyPass’s shortcoming ahead of the next year in the market? Thanks guys.

[Thomas Burns:]

Yes, so I would say the answer to that is no. What we are doing is trying to build a marketplace, the marketplace we created and pioneered. We're interested in the overall evolution of this MIGS category to become a standard of care for use in combination with cataract surgery. I think when outcome launches which we expect in the early part of 2017 then I think it's fair to say what we are doing now is educating our sales representatives as to the current availability of clinical studies, what those studies might mean and how we might educate surgeons particularly if there is any misleading information out there how we might educate them and what the proper way to read the clinical trial data may be and you can certainly expect that will be fully trained and ready for any competition when it presents itself.

[John Block:]

Okay, that’s it from me. Thanks guys.

[Thomas Burns:]

Thanks John.

[Operator:]

Our last question comes from the line of larry Biegelsen from Wells Fargo Security. Your line is open.

[Unidentified Analyst:]

Hey guys, it's Adam on for Larry thanks for taking the questions. I want to start with reimbursement, first any insights or thoughts that you can share regarding the upcoming decision between pursuing a category three code extension or transitioning to a category one code and any sense to what the physician rate would be under a permanent code?

[Chris Calcaterra:]

Yes, it's a good question, it's a question that I have addressed before, but what I would tell you is just to refresh everyone’s memory is that we will have a decision to make certainly by mid next year or there about whether or not we petition to convert to category one code or whether we look to extend the basis for a category three code here in the United States. As I said along, we think that the coverage and the current category three payments have been favorably disposed and fairly disposed for professional fees for surgeons for implanting iStent, so we are very happy with what's currently happening with category three code. We will need to make a decision if we do convert the category one what we said all long is if you look a study that I think or the procedure that I think most clinicians that you reach out through your channel checks will agree is most comparable to the iStent implantation is goniotomy and you can look up the current goniotomy code which I think pays currently about $760 and so. When we look at doing when we do go to finally to a ROCK committee and get RVU analysis, I would hope to be somewhere in that ballpark within a bracketed range and that would be my expectation when we do convert to category one. We'll keep you posted, we will continue to watch the marketplace which will inform us, so the best way to approach this decision which will happen mid next year.

[Unidentified Analyst:]

Okay that's help well thank and then it's a quick follow up on reimbursement, do you any update on what's going on with Novitas?

[Chris Calcaterra:]

Yes, the only update that I have is what you probably are aware of is that Novitas initially reported that they were going to make a decision and we look at the professional fee payments for iStent implantation and publish that by September 6th. They did not follow through with that and we believe that they’re currently reconsidering the code payment which by the way currently pays about $1,000 for the implantation of the iStent. We have not heard anything since that past September 6th a decision that they passed on.

[Unidentified Analyst:]

Okay. Thanks for taking the questions.

[Thomas Burns:]

Okay well I want to thank everybody. Thank our investors for being on this call, thank you for your continued support. Thanks to the analyst for again very good questions today and we appreciate you joining us, look forward to the next call. With that I wish you good afternoon.

[Operator:]

Thank you ladies and gentlemen this concludes today's conference call. You may now disconnect.