SI-BONE, Inc.
Q4 2020 Earnings Call Transcript

Published: 8 Mar 2021

[Operator:]

Good afternoon and welcome to SI-BONE's Fourth Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s call. As a reminder this call is being recorded for replay purposes. I would now like to turn the call over to Matt Bacso from the Gilmartin Group, for a few introductory comments. Please, go ahead.

[Matt Bacso:]

Thank you for participating in today's call. Joining me are Jeff Dunn, President and Chief Executive Officer; and Laura Francis, Chief Financial Officer and Chief Operating Officer of SI-BONE. Earlier today SI-BONE released financial results for the quarter and full-year ended December 31, 2020. A copy of the press release is available on the company's website.

[Jeff Dunn:]

Thanks, Matt. Good afternoon and thank you for joining us. Before we get into the details of the quarter, I want to thank all the healthcare workers taking care of COVID patients as well as the over 100 SI-BONE field personnel who are in hospitals and ASCs virtually every day, as well as the almost 600 surgeons who treated sacroiliac joint dysfunction patients with iFuse during the quarter.

[Laura Francis:]

Thanks, Jeff. As founder of the business over 12 years ago, Jeff has been a pioneer for the use of iFuse to treat sacroiliac joint dysfunction. He's left an indelible legacy and will continue to be a valuable resource as our Executive Chairman. I'm honored and excited to lead SI-BONE during this unique period of opportunity. Turning to the financials, fourth quarter total revenue of $22.1 million increased 12%, compared to the prior year period. U.S. sales of $20.7 million, which accounted for approximately 93% of total revenue in the quarter increased 12%, compared to the prior year period. International revenue of $1.5 million increased 15%, compared to the prior year period. The quarter started off as expected, with October revenues growing at a similar rate to what we experienced in the third quarter of 2020. However, in the back half of November, cancellation rates started to increase driven by the resurgence of COVID-19 cases. In December, these trends worsened, resulting in roughly 90 U.S. cancellations in the month. We estimate cancellations in the fourth quarter represented an approximate us revenue headwind of $1.25 million, which does not include other procedures that were likely not booked in the quarter, due to the surge in the COVID-19 cases.

[Jeff Dunn:]

Thank you, Laura. In closing, our confidence in the opportunity in front of us for the business and for shareholders is stronger than ever. With the additional funding we have put in place and an accelerated investment and growth plan. Most importantly, it will help us achieve our mission to help many more patients, direct to patient initiatives, increase surgeon training, additional field sales personnel to educate and support the surgeons, new product development and automation and scaling initiatives are the five key focus points of our investment strategy. With reimbursement broadly established in the U.S., we believe that now is the time to invest in substantial growth in our market, and as the market leader, we and our shareholders will be the beneficiaries of that market expansion. Thank you for joining the call today. We will now open it up to questions. Operator?

[Operator:]

Thank you. Our first question comes from David Lewis with Morgan Stanley. Your question please.

[David Lewis:]

Thanks and good afternoon. First, Jeff, congratulations on building a fantastic company and creating a dramatic amount of value. You will be missed. And Laura, congratulations on the new position.

[Laura Francis:]

Thanks David.

[Jeff Dunn:]

Thank you, David.

[David Lewis:]

Couple of things here. Just want to focus on guidance and then the pipeline here, so a couple of questions on guidance. The first is just for either Jeff or Laura, just what did you see throughout the – we're getting pretty late here in the first quarter, so what transpired in the business, sort of late February into March, because in consensus, kind of has your business down kind of 10% sequentially, sort of what do you see in the business February, March, and what's the relative comfort at that sort of $20 million level kind of building off of the start the year?

[Laura Francis:]

Maybe I can?

[Jeff Dunn:]

Sure. Go ahead Laura.

[Laura Francis:]

Do you want me to start, Jeff or – okay.

[Jeff Dunn:]

Yeah, please.

[Laura Francis:]

So, I'll just talk about the quarter in general. And from a January perspective, if you call this the third COVID surge, I would put January as the trough, you had the highest, you know cases that were out there. There were issues in the hospitals, there were issues with elective procedures in hospitals, and there was also patient concern. And so, we actually experienced the decline in the month of January in our business for the first time since April of 2020. But then in February, we started to see a return. COVID started to abate. And so, we had, you know, fewer canceled cases in February, although to be honest, February was impacted by some of these ice storms as well. We saw a lot of cases that were canceled to be rescheduled, and so it did tend to be in the Texas area, in the mid-part of the country where there were some issues, but we did see positive growth in the month of February. And then as you know, we look at our case bookings honestly every single day. But you know, certainly at the very beginning of the month, we just take a look at where our case bookings are at. And our case bookings are at a historic high for March. They're the highest that they've ever been at the beginning of the month. So, what appears to be happening is that, like I said, you saw this trough in January, a return to growth in February, and then a very strong start to March. And if you take all of that information and you link it to our guidance, you know, what we're saying is, we don't think that March is going to make up for what we saw in January and February, but we're starting to see the rescheduling of those cases that were canceled in Q4 as well as those cases that were cancelled in January and February.

[David Lewis:]

Okay, that's super helpful. And maybe I’ll just ask my next two and I'll jump back in queue. One is another guidance based question. So, as I look at 2021 guidance, and I appreciate you providing guidance because frankly many of your peers did not do so, but look it represents 40% growth, 2021 over 2019, you know 20% per annum growth, which I frankly think the underlying business is probably tracking higher than secondarily .

[Jeff Dunn:]

Hello.

[Operator:]

It seems that we lost David. David, when you return just .

[David Lewis:]

Sorry about that one. Can you hear me now?

[Operator:]

Yes, sir.

[David Lewis:]

Sorry about that. The – so in just 2021 guidance, it's 40 – you know 20% per annum growth, but then sequentially, Laura, Jeff, if I back out stocking and the backlog, it’s kind of 20% growth into the fourth quarter, which is pretty robust suggesting kind of 2021 guidance, a little conservative. So, what kind of went into that 2021 number? I guess is the question on guidance kind of first half versus second half. And then Jeff, maybe for you, just you, I don't think anyone really is focusing on significant impact from the fixation business. But now when I think about diligence we’re getting from fixation from Bedrock, and then the second generation launch you have in the second half of 2021, I sort of feel like this can be a much bigger part of the business, 2022 and beyond. So, maybe just sort of share your thoughts on what percent of the business that could be or some of the trends you're seeing there. Thanks so much, and sorry, for the connection problem.

[Jeff Dunn:]

Yeah, no worries. Laura, you want to take the first one? And I'll do the second.

[Laura Francis:]

That's perfect. Yeah. So, in terms of how we thought about the guidance, what we were taking into consideration is the impact of COVID early in this year, and then what we're assuming is that COVID will diminish with each sequential quarter as vaccine availability improves and patients begin to seek elective care and typical levels. So, the assumption here is that we will see more normalized case scheduling and elective procedure levels beginning in the second quarter of 2021. So, I hope that's helpful information, and Jeff, maybe you can answer the second question.

[Jeff Dunn:]

Sure. So David, as you know, there are three parts to business, the core SI joint fusion business, they're very solid, feeling great about it. And the fixation business or the adult deformity space, which I think you are just generalizing and calling fixation, it's turned out that this is not an easy sell, but a very straightforward sell. And, in fact, surgeons understand the dynamics of the situation, and that there's 29%, some kind of complication with these adult deformity cases at the base of the spine, and the biomechanics are very clear that there is additional adjacent segment disorder effect from that. And we're engaged with dozens and dozens of surgeons across the country that are very excited about this particular area. And so, although it was not a huge part of the business, in 2020, we certainly expected to be a growth driver for us in 2021 and 22, particularly as we, as you know, the Bedrock technique is more of a technique with the same product that's longer. But as we introduce the next generation product late this year, we can envision – not every surgeon, but any surgery, we believe that goes to the sacrum, we think will benefit from our next generation product or even from the current Bedrock technique. So, I don't think we've had – but a handful of surgeons will say, that's not necessary, the vast, vast majority think this makes complete sense. No one has anything like this. And when you see our next generation product, I think it will – it has a chance to become a very standard part of adult deformity, which is a good size market And then on the trauma side, we, you know, as we've said, we're going to introduce the trauma and SI joint fusion core product in the first half of this year. So, you will see that in the not too distant future, and we believe the reception for that product is going to be very robust. You know, deformed or trauma screws have had no invention, to speak of, as we see it. And there are lots of aspects to improve the capability of trauma devices. And I think we've incorporated lots of those things in this new product line. And we think it'll also help grow the business in our base SI joint fusion business. So, on both fronts, we are, we are quite excited about both. And most importantly, it's because the surgeons that we've engaged in with all the labs that we've done out there, testing the product, trying the product iterating the product, have made great progress and Tony Recupero and Nik Kerr, who have led that charge, along with our engineering team led by Scott Yerby have just done an extraordinary job setting those product lines up based on the needs out there, not on what we thought, but what on the needs were.

[David Lewis:]

Great, Jeff, Laura, thanks so much.

[Jeff Dunn:]

You're welcome.

[Laura Francis:]

Thanks, David.

[Operator:]

Our next question comes from Bob Hopkins with Bank of America. Your question please.

[Bob Hopkins:]

Okay, thanks and good afternoon. Appreciate the call here. A couple of things just following up on David's questions. I'm sorry if I missed this, but Laura, I'm just curious relative to where consensus is for the first quarter, is that a number that you're roughly comfortable with?

[Laura Francis:]

So, if you if you take a look at where the numbers are currently at, and I think that consensus was at around 94.8 million for the year, we are providing guidance of 92 million to 94 million, certainly is .

[Bob Hopkins:]

– just in the first quarter.

[Laura Francis:]

Certainly a good portion of that difference is related to the first quarter. And so, if you think about what I said about January and February, we actually had a decline in the business in January, and then a return to growth in February. And we see a very strong March, but not to the levels of making up for what happened in January and February. So, lower numbers .

[Bob Hopkins:]

Got it. No, no, thank you. I apologize for interrupting. That was very clear. Okay. And then something else, you said in response to David's questions really caught my attention, though. Case bookings for March are the highest ever, could you just – by ever, do you mean heading into any month in the history of the company…?

[Laura Francis:]

Heading into any month of the company ever.

[Bob Hopkins:]

Okay.

[Laura Francis:]

And so what it tells me is that we're seeing cases return to more normalized level, but then on top of it, we're seeing these rescheduled cases coming in. That's what I believe is happening based on looking at our bookings.

[Bob Hopkins:]

Okay. Interesting.

[Laura Francis:]

So, kind of similar to what we saw a year ago in Q2, you certainly didn't have the trough that we saw in March and April of last year, but as you may recall, our April was a decline then May we saw some growth. And then we started to see very strong growth in June and July, which included those new cases, as well as the rescheduled. And this feels like the same exact pattern once again.

[Bob Hopkins:]

Okay. Is that well balanced across the country or is it, you've got a couple of really active places and then a couple that still need to catch up from a booking perspective?

[Laura Francis:]

You're right. It is still – it's variable by region, you know, so for example, our southwest region is still a little bit behind where we would have expected for it to be so, you know Southern California, those areas still appear to be challenging, but most of the areas of the country we're seeing a very nice rebound.

[Bob Hopkins:]

Okay, that's helpful.

[Jeff Dunn:]

And the same time I think, Bob in Europe where we're seeing countries like France and Germany doing really, really well, but the UK is trailing because of COVID.

[Bob Hopkins:]

Yeah.

[Jeff Dunn:]

You know, UK was coming on so strong before COVID. We expect that to, you know, once that dissipates we would expect that to be a major contributor in a very positive way, once we get a little farther down the road with the vaccines.

[Bob Hopkins:]

And then for either Laura or Jeff, I mean, the launch that's happening in the first half of the year on the trauma side, can you just spend a quick second on, you know, exactly what you're launching and maybe set some expectations like how big, how do you quantify this market opportunities? Just a little more color on the first launch that you're scheduling on the trauma side? And that'll do it for me. Thank you.

[Jeff Dunn:]

Yes, sure Bob. So, you know, what we've said is that the device that will be used both on the trauma side and the core business, you know, we have gotten clearance on that product. So, we're just ramping up training and getting ready for the launch in inventory and that kind of thing. So, we have it almost ready to go. So, we'll certainly launch it in the first half. But in the trauma space, it's for, you know, it can be used for fixation of either small or large BONEs. And that could be either in high energy fractures or low energy fractures, depending upon the particular circumstance. So, it'll be, I think, a very effective capability to fixate in BONE’s in the trauma space. We think better than anything that's out there in the marketplace today. And then in the core business, of that SI joint fusion, we're seeing – we think there's a significant capability or opportunity there to augment our leadership product in certain circumstances. And if you just be a little patient with us, it's not that far off that we’ll launch that product.

[Bob Hopkins:]

Okay, great. Thank you very much, and congrats all around.

[Jeff Dunn:]

Thanks Bob.

[Laura Francis:]

Thanks Bob.

[Operator:]

And our next question comes from Kyle Rose with Canaccord. Your question please.

[Kyle Rose:]

Great, thank you for taking the questions. So, I just wanted to ask a little bit more about the simulators. I mean, it sounds like that's obviously, you know, a huge initiative, you've got a lot more simulators coming on by the end of the first half, can you just maybe help us understand, you know, how that changes, like the ROI of your marketing and education programs? Does it allow you to take a wider shot of surgeons, or does it allow you to go deeper into specific territories and accounts? I’m just trying to understand what that looks like? And then how that productivity with the simulator, you know, varies with, you know, some of your prior historical in person cases? I’m just trying to understand the on-boarding and the productivity opportunity here.

[Jeff Dunn:]

Yeah. So, good morning. Why don’t don't I start, and then you can add in, you know, with the new simulators, because they're so convenient, where you can train anyone in their office without any radiation, it will absolutely expand the number of people that we train, and do so cost effectively, Kyle. So, you know, if we're training someone who we think is going to going to do a case, and you got to fly him to, you know, you know, three hours, and, you know, can cost thousands of dollars. Here, you know, if we think someone's going to do a case, it costs us very little to go and train them. So, we can go wide, and it’s also from a productivity standpoint, a much greater capability. Because if you think about the numbers, and you have, let's call it 20 simulators out there, and they're used 50 weeks a year. And they're used a couple of times a week, even trading as many as a couple of thousand surges. And if you train a couple in a session, you know, the numbers go up. So, it almost gives us a limitless capability to train as many surgeons as want to get trained. It's also, you know as we’ve said the past interesting to see how many surgeons are interested in the technology because it allows you to look at your progress along the training way. So, with the cadaver lab, you put the screws in or you put the implants in, I should say and you really can't see exactly where they are till the end. Here you can, you can all along the process take as many pictures as you like without any radiation. So, it's a very attractive thing and I think the trick in the whole thing is to make sure that we're choosing good surgeons and using our time effectively, but this makes the ability to widen the number much easier.

[Kyle Rose:]

Great. And then I think, earlier this year, I mean, I think it was maybe on the Q2 or Q3 call, you talked about, you know sort of agreements with some of the larger chain, you know ASCs and outpatient centers, just maybe comment on what type of trends you're seeing as far as the location of procedures in the 2020, and kind of how you think about that evolving in 2021? And then how that might influence, you know, pricing in on a per procedure basis?

[Laura Francis:]

I can talk a little bit about that, Jeff.

[Jeff Dunn:]

Sure.

[Laura Francis:]

So, our sales in ASCs have continued to climb. We're getting close to 20% of our sales that are now in an ASC setting. And we think it is a very important setting for our procedure given the simplicity of the procedure, as well as the surgeon desire to be in an ASC in certain cases. And so we are continuing to see a trend in that particular direction.

[Kyle Rose:]

Great. Thank you for taking the question.

[Operator:]

Thank you, Kyle. Our next question comes from Dave Turkaly with JMP Securities. Your question please.

[Dave Turkaly:]

Hi, congrats again on the executive leadership changes. Maybe you know you’ve shown some really good progress of late with the active surgeon, you know getting increase in that basis, wondering as we look to the 2021 guide, is there any color in terms of how many you think you'll need to add to get to that 25% to 28% growth is that, you know, I know you mentioned rep adds. But I'm curious is where you think that stat plays into, sort of your forecast and should we expect over 100 new surgeons to become active this year?

[Laura Francis:]

Yeah. It's a good question. So, in terms of how we are starting to think about active surgeons, we're looking at historical patterns. And historically, what we've done since we went public is we've increased both the number of active surgeons that are using our product, as well as the number of procedures that the active surgeons are performing. So, for example, when we went public, on average an active surgeon was doing around three cases per quarter instead now they're doing close to four cases per quarter instead. And so what we were baking into our guidance is an assumption that the increase in the active surgeons would account for the majority of that growth, but there would also be some additional growth in the number of procedures being performed per active surgeon.

[Dave Turkaly:]

Got it. And, Jeff, I think I heard you say the word profitability there. So my follow-up would be, as we look to 2021 should we expect more operating leverage? You've been showing some of late, I know, you've cut down the spending, and I mean the hefty growth rate you've forecasted for the year, but I guess just any color in terms of a bigger or smaller loss in 2021 directionally and anything you want to add? Thanks so much.

[Jeff Dunn:]

Yeah, you're welcome, Dave. So, we've said in 2021 we are going to increase the loss a bit. So, we haven't slowed down the spending at all. And as Laura shared earlier, you know, our guidance for the year is just a little bit less because of the Q1 effect of COVID and these storms in February. So, you know, net-net we're going to widen the loss. You know, when we think about 2022, you know, we feel like okay, now we can get back to hopefully to a more normal world, and get leverage in the business. And as you saw the gross margin is holding pretty strong with 90% gross margins, and you know, we certainly expect it to decline going forward somewhat. But we are going to have a wider loss this year because of the increased accelerated spending plan and the slightly less revenue forecasts because of COVID.

[Dave Turkaly:]

Thank you.

[Jeff Dunn:]

You’re welcome.

[Operator:]

Our next question comes from Kaila Krum with Truist. Your question please.

[Kaila Krum:]

Hi, guys. Thanks for taking our questions. So, just a follow-up on the two new product launches coming. Can you just give us a little bit more detail as to how meaningful these launches can be? Mostly how you're incorporating those new products in your guidance as it stands today? And then just on the margin side, how should we think about gross margins, just as these new products are being rolled out and over time?

[Jeff Dunn:]

Yeah. So Kaila, I guess I'll make two comments, one on our market opportunity, second one is on market penetration. Then I'll let Laura talk about margins and those kinds of things. The first one is, in base SI joint fusion, as you know, the markets call it $2.5 billion and it's still less than 10% penetrated. In the trauma and the adult deformity space, we think those markets are hundreds of millions of dollars each. And we think those are almost not penetrated at all. Because the whole opportunity is, we think in front of us because it's a better product. So, you know, putting an S2AI screws in adult deformity patients is not been a great adventure. It's been with a bunch of challenges, and we are sure that our capabilities will be much better than that. And more importantly, the surgeons will think that. So, you know, the penetration rate is very low there as well. So, I think in all three markets, you know, there's just tons of opportunity, but you know, on a relative basis, you know, you're talking about 2.5 billion, you're talking about a few 100 million and a few 100 million. So, that just gives you a picture of market size, market penetration, and then Laura can talk a little bit in general about the gross margins.

[Laura Francis:]

Yeah, so I did give a little bit of information on gross margin in the script. And what we're expecting is that gross margins are going to continue to move a little further downward. It's hard. First of all, it's hard to keep up a 90% gross margin, which we have in this last quarter. We've obviously been very careful about our spend throughout the COVID challenges. And, you know, given how high our gross margins are we don't want to lose business based on margin. And then we talked a little bit about ASC’s previously and there does normally tend to be a little lower price that we get in an ASC, but we have seen ASC’s is absolutely critical sites of service. We're growing business there. We're growing market share there. And so they've been a very important place for us to sell. Getting to your question about the new product launches, the new products, in certain cases may have contributed to lower gross margins as well. In some cases, we'll be using two implants versus three implants with our surgeons, depending upon which product we're talking about. For example, right now our Bedrock product uses two implants versus the three in our typical iFuse procedure. And so for all of those reasons, we are providing guidance that say our gross margins should be expected to be in the mid-to-high 80% range.

[Kaila Krum:]

Got it. Now that makes a ton of sense. And then you guys are, I mean you're hiring quite a bit, you've promoted some folks and in sales and you've added new leadership. So first, what are you sort of expecting the cadence of sales rep hires to be over the course of this year? You know, it sounds like there’ll be more front half weighted. And then Have you made any sort of material changes to sales force compensation or priorities this year, as compared to last? Thanks for taking our questions.

[Jeff Dunn:]

You’re welcome. From a hiring standpoint, we are continuing to aggressively hire, Kaila, you know, but you know, the hiring done during this year really will affect 2022. So, but we're, we absolutely believe I mean, it's the base tenant or putting more feet on the street to, particularly when you're going to – we're going to have three different areas, SI joint fusion, adult deformity, and trauma. We need more people out there to support those surgeons. So, we haven't slowed down the cadence. The team is hard – the management team is hard at work trying to bring on and successfully bringing on some really fantastic people. You know, with regards to compensation, I think we've shared with you in the past that the sales force is mostly compensated on commissions related to the revenue that they bring in. But they also have a component that is associated with training to encourage initiatives and efforts in that particular area, which yields fruit down the road. And they're completely bought into that, they understand that. We have a very sophisticated group. And I think Tony and Troy have done a great job making sure everyone understands the plans. And I think, you know, more of the same as the right thing to do.

[Kaila Krum:]

Thank you, guys.

[Jeff Dunn:]

You're welcome.

[Operator:]

Our next question comes from David Saxon with Needham. Your question please.

[David Saxon:]

Yeah, good afternoon everyone, and thanks for taking the questions. My first one just on…

[Jeff Dunn:]

Hi David.

[David Saxon:]

Yeah. Hey, Jeff. Just on the fourth quarter, I think you said you had about 150 cancellations. It sounds like you also have a lot in January. So just wondering, you know how many you expect to come back and over what period of time? And then just looking at guidance, I guess, you know what does guidance assume in terms of how many come back?

[Laura Francis:]

So, I can give some information on the fourth quarter? I mean, you're right, David. We saw around 150 in the fourth quarter. And then we saw more in January in February. And what's difficult about those numbers that that we're providing in terms of cancellations, those are only the ones we're aware of. And, you know, what that means is that that there are probably a lot more cases that never made it to us, they never got on our books. Because the surgeon, you know, never booked them or they were cancelled before they actually came to us. So, we think that, you know, those numbers provide a good proxy for us to understand what was going on, especially related to COVID. But they certainly don't tell you the extent of the issues that our surgeons were having due to COVID. In terms of the return of the business, it's – that’s another interesting question. And that's why, you know, we felt it was important to provide month-by-month commentary to you and then do a comparison of what happened in mid-2020, when there were COVID issues. So, like I said, January looked like a trough. February, we start to see the return of growth on a year-over-year basis to the business and then March we are seeing the highest bookings we've ever had in the history of the company just for this particular month. And so what does that mean? It likely means that, you know, we're seeing those rescheduled cases coming back in. So, when this happened a year ago, we saw in the month of May a return of the business; in June, very high growth; in July, very high growth; and then, you know, more moderated growth in August and September. So it really takes around 90 days to get back a good portion of those rescheduled cases. And, you know, we are assuming that we should be able to see those cases coming in. Now, if there continue to be issues in certain places that question was asked about, are there still problem areas? There definitely are, you know, if there were resurgences or, you know other things where COVID continues to impact the business, you know, we didn't want to really bake all of that into the guidance. So, instead as I said, what we did was we assumed that, you know, Q1 was impacted in January, February, and that we would see this move back to more normalized case, bookings in the second quarter, and then further improving and Q3 and in Q4.

[David Saxon:]

Great, very clear, and thanks for that color. My second question is on the direct marketing campaigns, can you just talk a little bit more about those? And how are you measuring the success of those initiatives? And is there any way you can use these as an incentive to get doctors trained in the regions you're targeting initially? And thanks so much for taking the questions.

[Jeff Dunn:]

Sure David. So there – as we mentioned, you know, there are a number of TV ads running in multiple cities. We really measure it by how many patients call the call center and ask for the names of a few surgeons to make an appointment with, as we always give out multiple names in a particular locale, or you know, near that person's or patients zip code. And, of course, we would do our best to track those patients through to measure the programs. That said, we've done some testing. I would say we've upped our game tremendously by bringing in Brian Broveleit, who has, with his advertising agency experiencing lots of these programs across many, many companies. His experience at Kellogg, obviously one of the better consumer companies in the world, and his medical device experience. So, I feel like, okay, we've taken the ball about 10 yards down the field, and we're going to give it to Brian, along with the rest of the team who's done some great initial work. And we will hone it a lot. So, I think we're going to get some read-outs from the initial programs. But I expect Brian and the team to refine this program tremendously over the next 6 months, 12 months. So that becomes an important part. I think it's strategically an important part of the business, to be able to get the patients to get them to understand that that there is a robust, clinically effective procedure out there so that they don't have to get injections over a long period of time. And that they actually can get fixed and stop going to the doctor. And so, I think it's a very exciting message. I think they've done, as I said, a great job, starting with the program. But I think, for us to really get a great deal of how the program is working. I think Brian was here, you know, nudging me, he'd say, you know, I'm really not going to know how this whole thing works in crisply for 9 months to 12 months. And, but we absolutely fervently believe that it's going to be a driver in the business, certainly in 2022 and 2023.

[David Saxon:]

Great, thank you.

[Jeff Dunn:]

You're welcome.

[Operator:]

Thank you. Our next question comes from Brandon Folkes with Cantor Fitzgerald. Your question please.

[Brandon Folkes:]

Hi, thanks for taking my question. Congratulations on another good quarter.

[Jeff Dunn:]

Thank you.

[Brandon Folkes:]

Maybe just one from me. How should we think about sales force productivity ramping up in 2021 and maybe exit in 2021? Jeff, and I touched on, sort of 2022 is where we get the, sort of full impact of the highest this year, but maybe just some color in terms of how we should think about the ramp in productivity this year for sales reps? Thank you.

[Jeff Dunn:]

You know, as we've said, it takes about 12 months for a sales rep to start to chip in meaningfully. That said, you know, when we hit productivity is a funny thing, in the sense that if you add a lot of sales reps, the denominator gets larger. And so, really what we think about is the whole structural initiative that Tony is driving forward with his management team along with the field team. And saying when people get up there to a million, 2 million, 3 million, how do we give them help so that they can grow the territory. And as you can read within the numbers that Laura shared about the number of people we put in place, we have, and we will continue to put in more support people that helped drive the productivity of the sales reps. So, I don't have any specific numbers, because, you know certainly we track it every single month, but I'm reluctant to share how the productivity is going to be forecast, you know, over the next year. But suffice it to say, with more products, more sales reps, the simulator training, we feel great about the productivity of the sales force. I think the sales force is very excited about what's going on in the field with the simulators, how that's really assisting them. They're excited about the new products, they've been exposed to those products and they're excited about how our baseline product is doing in the field. So, I think the enthusiasm in the field is what really gives me and Laura a great feeling about how the productivity is going to develop across the entire company, and as an organization.

[Brandon Folkes:]

Great, thank you very much.

[Jeff Dunn:]

Thanks. You’re welcome.

[Laura Francis:]

Thanks Brandon.

[Operator:]

And this concludes our Q&A session for today. I will pass the call back to Jeff Dunn for his final remarks.

[Jeff Dunn:]

Thank you, . And thanks for everyone for joining today. We're excited about what's going on. Obviously, we're more excited about, you know, getting back to a normal game plan, without COVID out of the way, we feel like we've set up all kinds of great things with reimbursement with the people, with the simulators and hopefully soon we'll actually get to show you the shareholders our real colors, nothing wrong with our growth in the past, but I think if we can get this out of the way we can really under Laura's leadership deliver some really great shareholder value. So, thanks again for joining, have a good rest of the day.

[Operator:]

And with that, ladies and gentlemen, we thank you for participating in today's conference. You may now disconnect. Have a wonderful day.