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Edited Transcript of AXNX.OQ earnings conference call or presentation 4-Nov-20 9:30pm GMT

·55 min read

Q3 2020 Axonics Modulation Technologies Inc Earnings Call Nov 5, 2020 (Thomson StreetEvents) -- Edited Transcript of Axonics Modulation Technologies Inc earnings conference call or presentation Wednesday, November 4, 2020 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Danny L. Dearen Axonics Modulation Technologies, Inc. - President & CFO * Neil Bhalodkar Axonics Modulation Technologies, Inc. - VP of IR * Raymond W. Cohen Axonics Modulation Technologies, Inc. - CEO & Director ================================================================================ Conference Call Participants ================================================================================ * Adam Carl Maeder Piper Sandler & Co., Research Division - VP & Senior Research Analyst * Christopher Thomas Pasquale Guggenheim Securities, LLC, Research Division - Director and Senior Analyst * David Joshua Saxon Needham & Company, LLC, Research Division - Analyst * David Ryan Lewis Morgan Stanley, Research Division - MD * Kaila Paige Krum Truist Securities, Inc., Research Division - Research Analyst * Michael K. Polark Robert W. Baird & Co. Incorporated, Research Division - Research Associate * Robert Adam Hopkins BofA Merrill Lynch, Research Division - MD of Equity Research ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good afternoon, ladies and gentlemen, and welcome to the Axonics Q3 2020 Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Neil Bhalodkar. -------------------------------------------------------------------------------- Neil Bhalodkar, Axonics Modulation Technologies, Inc. - VP of IR [2] -------------------------------------------------------------------------------- Good afternoon, and thank you for joining Axonics' quarterly results and update call. Presenting on today's call are Raymond Cohen, Chief Executive Officer; and Dan Dearen, President and Chief Financial Officer. Ray and Dan will provide prepared remarks and commentary on third quarter financial results, U.S. commercial progress and a general business update, followed by a Q&A session. Before we begin, I'd like to remind listeners that statements made on this conference call that relate to future plans, events, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. While these forward-looking statements are based on management's current expectations and beliefs, these statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause results to differ materially from the expectations expressed on this conference call, including risks and uncertainties disclosed in Axonics' filings with the Securities and Exchange Commission, all of which are available online at www.sec.gov. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today's date, November 4, 2020. Except as required by law, Axonics undertakes no obligation to update or revise any forward-looking statements to reflect new information, circumstances, unanticipated events that may arise. I'd now like to turn the call over to Ray for his remarks. -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [3] -------------------------------------------------------------------------------- Thanks, Neil. I'd like to welcome everyone dialing in to today's call, and those of you who are joining by the webcast. But before we begin, on behalf of all the stakeholders of Axonics, I would like to express our gratitude to the health care workers providing care for those impacted by COVID-19 and also to recognize all of our employees for their dedication to our customers and patients during these extraordinary times. I'd also like to note that today is approximately 2 years from the date of Axonics going public and approximately 1 year from the date of our launch of our sacral neuromodulation system in the United States. Now on to the business at hand. It's my pleasure to report that sales rebounded sharply in the third quarter with Axonics generating $35.2 million of revenue. This was despite the launch of a rechargeable SNM device in an all-out effort by our competitor to take back converted accounts. Our commercial success continues to be grounded in providing our customers with exceptional support, while delighting their patients with a long-lived, life-changing therapy that is easy to use. I'll provide some additional commentary on the business trends after Dan's prepared remarks. On the clinical and regulatory front, we continue to enhance the patient experience and build a strong body of clinical evidence for the Axonics SNM therapy. Notable items from this quarter include: In July, the FDA approved our implantable device for full-body MRI scans with a 3 Tesla MRI scanner. As noted during our MRI, a webinar last week, which was attended by an independent physician and an experienced radiology technician, Axonics' MRI conditions are meaningful better -- meaningfully better and less burdensome than our competitor. So for those of you in the analyst and investor community that have conducted physician surveys, you are likely to have independently corroborated the same sentiment. Now this is actually an important distinction since the InterStim II is being promoted as MRI compatible. However, it is -- if it's burdensome to actually get an MRI completed in 1 patient appointment, that's information that physicians need to take into account when making a decision on which product to recommend to their patients. Now in August, we began shipping our second-generation implantable neurostimulators to customers in the United States and then followed up in September, by shipping to Canadian customers once we received regulatory approval from Health Canada. Now this second-generation implantable neurostimulator reduces how frequently a patient needs to recharge their implanted device to only once a month for about an hour. For some patients, we've seen the recharge interval go as long as 49 days between recharging. This long interval between recharging is an important point of competitive differentiation for our rechargeable device, and physician and patient response has been very positive to this enhancement. Now in September, we also reported 2 year post-implant results from our ARTISAN-SNM pivotal study. Now these clinical results were the strongest ever reported in SNM clinical literature. Now this is especially notable considering none of our study patients underwent an external trial. So what does that mean? It means that all patients were implanted in a true intent-to-treat manner. At 2 years, 88% of all implanted patients were therapy responders. Now this is consistent with the 89% therapy responder rate we reported at 1 year. Now 82% of these therapy responders achieved greater than 75% reduction in the number of urinary leaks. And actually, 37% of the patients were completely dry. We also reported that 93% of patients reported being satisfied with Axonics' therapy and stated they would undergo the procedure again. Patients were also very satisfied with the recharging experience with 91% reporting charging as easy. In late October, we launched a post-market clinical registry study named ARTISTRY. Now this registry will collect and analyze real-world data of patients treated with the Axonics system, and we intend to enroll approximately 300 patients across 30 centers in North America and include patients across all 4 sacral neuromodulation clinical indications. Now we're confident that the technological advances or advancements and the strong clinical outcomes that Axonics continues to produce, will bring sacral neuromodulation to the fore and drive meaningful market expansion in the years ahead. So with that said, I'm now going to turn the call over to my colleague, Dan Dearen, and he will review our third quarter 2020 financial results, and then I'll provide a further business update after Dan is complete. -------------------------------------------------------------------------------- Danny L. Dearen, Axonics Modulation Technologies, Inc. - President & CFO [4] -------------------------------------------------------------------------------- Thank you, Ray. For the third quarter of 2020, Axonics generated net revenue of $35.2 million. This compares to $1.3 million in the third quarter of 2019. Net revenue from the United States accounted for $34.1 million with certain European markets and Canada accounting for the balance of third quarter 2020 revenue. As a reminder, we sell our products through our direct sales force in all jurisdictions, and there were no stocking orders in the quarter. Gross profit for the third quarter of 2020 was $21.8 million, representing a gross margin of 61.9%. We anticipate gross margins in the low to mid-60s in the fourth quarter and continue to anticipate gross margins in the low to mid-70s over the long term. Total operating expenses for the third quarter of 2020 were $30.6 million, which compares to $25.7 million in the year ago period. The increase in operating expenses was primarily due to increased personnel costs across the organization as well as increased R&D and consulting costs. We expect operating expenses in the fourth quarter to be in the range of $33 million to $36 million given recent increases in headcount and other expenses, including our first expenditures in our new direct-to-consumer marketing campaign. Net loss for the third quarter of 2020 was $9.2 million as compared to a net loss of $25 million in the third quarter of 2019. Cash and cash equivalents were $269.3 million as of September 30, 2020. I will now turn the call back over to Ray. -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [5] -------------------------------------------------------------------------------- Great. Thank you, Dan. So as mentioned earlier on the call, Axonics experienced a strong rebound in third quarter sales as there was a rebound, obviously, in elective procedures. Now as we all know, physicians and institutions are eager to generate income and see patients return to the clinic. Sacral neuromodulation's short procedure time, outpatient setting and solid reimbursement helped drive a recovery in procedural volume. While difficult to quantify in absolute terms, we believe there was a benefit early in the third quarter from procedures that were deferred from the second quarter into early third quarter. Now we have read all of the recent analyst surveys and listened to what Medtronic has reported about the sacral neuromodulation market, which they claim is now growing at 20%. We also note that physicians are optimistic about the future of sacral neuromodulation and expect increases in procedure volume in 2021 and beyond. What is clear is that our physician customers are enthusiastically recommending Axonics to their patients, and more of those patients are saying yes to sacral neuromodulation therapy than ever before. Now there's no doubt that under normal nonpandemic circumstances, market growth would be more obvious. However, quantifying the rate of market expansion at this moment is challenging, given, a, this is our first year in the U.S. market and the COVID dynamics. Moreover, Medtronic is not disclosing official revenue or unit volumes for sacral neuromodulation in its earning releases, which just makes -- which of course, makes it difficult to evaluate U.S. market growth and market share numbers. While we are hopeful that the pace of elective procedures continue in the fourth quarter, we recognize that COVID hospitalizations have increased to levels not seen since the early days of the pandemic. Now given that or given that reality, Axonics has experienced patients canceling scheduled procedures in October. And this is not only in the Midwest, but in other states around the country as well. And moving outside the United States to Europe, we're experiencing -- what we're seeing is really a shutdown with elective procedures not being allowed or significantly curtailed in certain markets. Now this is especially relevant for England and the Netherlands, where most of our European business is derived. So we anticipate this could potentially reduce Q4 revenue in Europe by up to $1 million. Now despite the COVID headwinds, October was a solid month for Axonics. However, if these headwinds and the ones we've observed in this past month continue for the balance of the year, we anticipate some issues, and therefore, are suggesting a revenue range between $34 million and $36 million in Q4, with the vast majority of revenue coming from de novo patients as opposed to replacements of InterStim II, which have, as expected, declined from volumes reported in earlier periods. As we have stated previously, we believe that sacral neuromodulation is experiencing a renaissance based on new and effective technology coming to the market. And as a result, we believe the sacral neuromodulation category is poised to double over the next several years. On the marketing front, we're partnering with practices to identify patients that have been previously treated with drugs that are eligible for third line therapy. We know that sacral neuromodulation is significantly underpenetrated due to the lack of patient awareness with many physicians historically viewing sacral neuromodulation as a therapy of last resort, given the need for replacement surgeries, the historical lack of MRI compatibility and the less than optimal efficacy and the history of fussiness with our competitors' product. Now we started piloting various DTC strategies to test the most effective messaging, channels and content to reach patients suffering from overactive bladder and fecal incontinence. Now we're placing targeted ads across highly trafficked digital platforms. And using a baseball analogy, we would characterize these efforts as just the top of the first inning in our DTC journey. Given the limited scale in which we are testing these strategies, we do not expect these efforts to have an impact on procedure volume in the fourth quarter of 2020. However, we look forward to sharing more of our learnings and the go-forward DTC strategy with you in the new year. Now turning to operations and business development. We continue to make significant progress year-to-date and certainly in the third quarter. Our manufacturing and quality team was very productive during this past quarter. And as seen on our balance sheet, the team has built a significant quantity of finished goods inventory. Now we have over 5,500 patients that have been implanted with our system over the last year. And our data continues to show that nearly 90% of patients who undergo an external trial are ultimately implanted with a permanent device. And as of September 30, over 600 unique accounts in the United States have implanted patients with the Axonics system. This represents an increase of over 115 accounts from the prior quarter. So as we stand today, Axonics now has a presence in over half of the top implanting centers that practice sacral neuromodulation in the United States. Now we're expecting that this will be the last quarter that we report the number of U.S. accounts and quarterly increases in accounts. Now we believe this was an important metric to provide to analysts and investors during the first few quarters of our U.S. commercial launch, so they could track progress in acquiring customers. However, as we have now signed more national and regional IDN contracts with hospitals, the setting for our sacral neuromodulation procedures continues to evolve. With over half of full system purchase orders now coming from hospitals. As such, from a modeling perspective, the quarterly account metric is becoming less meaningful and less instructive since hospitals tend to have multiple locations and implanters from multiple practices, performing procedures in these institutional settings. That said, we added new accounts in October, and we will continue to add accounts in the quarters ahead. Now there is also a long tail of sacral neuromodulation implanters outside of the top 1,000 accounts. These implanters represent a group that has not received much support from our competitor. We have already brought some of these implanters back into sacral neuromodulation, and we have also trained some new physicians on how to implant. Now these folks are excited to grow with Axonics and participate in a highly underpenetrated market opportunity with our best-in-class technology and field team. Feedback from implanting physicians and patients continues to be overwhelmingly positive, with clinical results consistent with the 2-year data we reported in our ARTISAN pivotal study. We're excited to launch the Artistry registry, which will continue to expand our body of clinical evidence and demonstrate that the patient satisfaction rates and strong clinical outcomes reported in ARTISAN are being replicated every day in the real world. On a related note, in early October, we announced survey results of 137 patients that have previously been implanted with InterStim II that are now being treated with Axonics. We specifically surveyed these patients because they have a direct basis of comparison and can provide unbiased feedback on both devices. The fact that 92% of these patients that had been treated with both systems would choose Axonics over InterStim is compelling and underscores that patients want an implant that is long-lived, efficacious and easier to interface with. It's important to note, while there's a lot of talk amongst institutional investors about competition from the new Medtronic rechargeable device, the facts on the ground are that the nonrechargeable InterStim II still has the majority share of the sacral neuromodulation market today, and it is the go-to device among customers loyal to Medtronic. It's clear that, in our view, patients have a preference for longer-lived devices if given the choice. There's a significant benefit to a rechargeable implant that will last at least 15 years in the body versus a 3 to 5-year non rechargeable device. And in the survey, 78% of the patients said that the recommendation of the physician -- the recommendation of their physician was the key to the decision to upgrade to Axonics from InterStim II. Therefore, it's clear that while we will bring some new patients into the therapy from DTC and word-of-mouth referrals, our field team has a compelling opportunity to continue to make our case with implanting physicians that the Axonics system provides patients with significant and distinct advantages as compared to InterStim II. In early September, the National Institute for Health and Care Excellence, NICE, as it's referred to, in England, published a medical technologies guidance report in which it recommended the Axonics System to NHS hospitals for the treatment of overactive bladder. It's unfortunate that hospitalizations from COVID is leading to a reduction and, in some cases, a complete shutdown of elective procedures in certain NHS facilities across England. As such, we have not been able to capitalize on NICE's guidance. And in general, while the EU only accounts for 3% of our revenue, as I've mentioned earlier, our sales in the EU are being negatively impacted by COVID. So moving on to the product development front. Just today, we filed a PMA supplement with the FDA for approval of our third-generation implantable device in patient remote. Now approval is subject to the standard 180-day review time and is expected to -- and we expect to have this product in the market during Q2 of 2021. The new system allows for nearly unlimited programming capabilities and allows patients additional flexibility to change programs remotely. Now while we are close to a set it and forget it product, this is a feature that will benefit practices where patients have to travel long distance to come into the office for a therapy adjustment. This new filing and this new product represents the third significant upgrade that we've made to our SNM system during 2020 and underscores that we're nimble and capable of incorporating features that enhance the patient experience. Today, consumers of health care want devices that are effective and easy to use, especially when it comes to devices that will live in the body for a long time. And as such, we believe that producing great patient experiences will determine the share -- or will determine share in the marketplace and ultimately propel sacral neuromodulation therapy as the preferred solution for urinary and fecal dysfunction. Now we're also continuing to work diligently on our primary cell nonrechargeable device. The new offering will leverage our existing technology and promises to be, a, long-live; and b, be the first truly recharge-free system available. And I say this given that none of the components, including the patient remote, will require recharging. In terms of timing, we have entered the validation and verification phase of this project and are working diligently to be able to file with the FDA before the end of Q1 2021. In closing, we continue to make strong progress on our vision of being the market leader in sacral neuromodulation. We're grateful for the trust of shareholders, physicians and patients. We're grateful for the trust they've placed in Axonics, and we continue to work diligently every day to fulfill our commitments to the implanting community and their patients. So at this time, we're happy to answer any questions that analysts may have. So we'll turn it over to the operator. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) First question comes from David Lewis from Morgan Stanley. -------------------------------------------------------------------------------- David Ryan Lewis, Morgan Stanley, Research Division - MD [2] -------------------------------------------------------------------------------- Ray, congrats on the nice quarter. I want to focus on the future outlook here. So thinking about the fourth quarter guidance relative to the third quarter performance. Just help us -- sort of give us some more granularity there. There's going to be several investor questions on whether that reflects some conservatism, whether it reflects a view on resurgence, given how the business was impacted previously. Most of our companies are not guiding particularly aggressively in the fourth quarter, but does flat share reflect resurgence, does it reflect so conservatism or something you're seeing in the channel from a share perspective? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [3] -------------------------------------------------------------------------------- Well, I want to take it backwards. So first of all, thank you, David, and I appreciate your comments and your question. Let's take it backwards. Our conservatism, if you may, in Q4, has nothing to do with competition. I think we demonstrated in the third quarter, despite the fact that Medtronic launched their product in August, that did not impact our ability to post some pretty good numbers. I think that when we kind of break down what happened in the third quarter, and we look at the early part of the quarter, it's clear that we had some slop over, if you may, or benefited from some deferment of procedures that would have occurred in Q2 that wound up being done in July. So even though the quarter was pretty flat in terms of quarter-to-quarter and all the rest of it. But that's real, and we recognize that. So that's one. The second thing is that COVID and the resurgence of COVID and hospitalizations is putting a lot of pressure not only on hospitals because of the increase in hospitalizations. But more so, it's the impact on the psychology of the patients that are out there. And the fact of the matter is we are seeing, and we particularly saw an increase of this in October, where patients have canceled procedures, where they just -- they canceled it the last minute, they don't show up, they get cold feet. And I just think that we're trying to be realistic and a bit conservative to recognize that this is a very real phenomenon. And we're trying to put things in perspective, and it's very, very difficult for us to be able to, how should we say, predict exactly what the impact is. This is the reason why we're suggesting that Q4 may come out in a similar range to what we've seen in Q3 based upon these facts and circumstances. -------------------------------------------------------------------------------- Neil Bhalodkar, Axonics Modulation Technologies, Inc. - VP of IR [4] -------------------------------------------------------------------------------- David, do you have a follow-up? -------------------------------------------------------------------------------- Operator [5] -------------------------------------------------------------------------------- Next question comes from Bob Hopkins from Bank of America. -------------------------------------------------------------------------------- Robert Adam Hopkins, BofA Merrill Lynch, Research Division - MD of Equity Research [6] -------------------------------------------------------------------------------- So I apologize for the follow-up on the fourth quarter, but it's kind of a unique time. I'm just curious, does your -- the guidance rate that you're giving for the fourth quarter? Does that assume that things get a little worse from where you were in October, a little better or relatively the same? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [7] -------------------------------------------------------------------------------- I'm trying to think about how you asked the question. If things continue the way -- based on what we saw in October, then we would certainly hit the high end of the range. I think that's the direct answer to your question, right? So I'm worried about -- what I'm worried about, Bob, is I'm really worried now that the pace of cancellations and headwinds is more than what we've experienced as of right now. As of what we saw in October, that's fine. We're tracking in the direction that we would expect. But I'm afraid, honestly, about what's going to happen. And I know that there's been management teams that have been all over the board on this, right? Some have been really ultra conservative about COVID impact. Others have said they don't see an impact. I'm just telling you this is what we're seeing, and it's just reality. So we take that into effect with the fact that we had some deferment of cases from Q2 into the early part of Q3. That's why I think this notion of a $34 million to $36 million range is a reasonable estimate. And as you could, I think, appreciate, as everybody on the call would appreciate, our objective is to beat numbers, right? We want to beat the numbers. But here we are at the end of the year, and that's the question of the day. What do you think about the current quarter? So nothing that really happened in October makes us want to hide under our desks. It's just that I think we would have done a lot better had it not been for some of these comments that we're hearing from across the United States. And this is no longer just a phenomenon in Wisconsin, right, or some midwest phenomenon. The fact is, patients are nervous all over the United States. -------------------------------------------------------------------------------- Robert Adam Hopkins, BofA Merrill Lynch, Research Division - MD of Equity Research [8] -------------------------------------------------------------------------------- No, it makes sense like this is all in the last 10 days. So people are reacting kind of on the fly -- that give guidance. So I'm not -- that's why I think you see the wide range of how managements are reacting here. So my follow-up is really just on 1 other question on the competitive dynamic because I think most people on this call agree that the market looks like it's expanding, and there's a lot to look forward to here. But I'm just curious if you could flesh out a little bit more from what you saw from the launch of Micro. Did you have a number of accounts that where you were 70% to 80%, went back to maybe 50-50. Just maybe some anecdotes on the field on how you think that Micro has gone in accounts -- Medtronic accounts that you had penetrated? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [9] -------------------------------------------------------------------------------- So Micro. Now you're asking again about -- people are asking about Micro. We just have not seen much activity with micro. We saw some accounts, particularly, let's say, those KOLs out there who felt some obligation to try this new product, considering there's no clinical data out there, and they really don't know how well it works. So we saw some people dabbling with that product. But I'd put that into the accounts that we penetrated. If they used Micro or were curious about trying it, then that's fine, right? And it's to be expected. But we didn't see really much more than that. The point that I made in my prepared remarks, which I think people may find interesting, it's InterStim II that we're competing with, right? That really hasn't changed. It's InterStim II which is now "MRI compatible," right? That's what's being sold out there. And if you take a step back and just think about why would that be the case? Considering the comments that Medtronic made at the end of July, right, with their funky quarter ending at the end of July, they said their revenue was down 50% to 55%. And then we all know what happened in end of March and in April, and so forth. So we know nothing was sold then. So think about how much inventory these guys must have, right, on the shelf right now. So it's not that surprising to us that, that's what the message would be to their field force to push that product. I think that there's a lot of reluctance in the marketplace from the average user about taking on a product which has no clinical data. It's very real. And I know that some physicians were maybe more loose about their comments that, well, maybe it's important, maybe it's not important. But in general, I think urologists and urogynecologists are a relatively conservative group, and this does matter. Clinical data does matter. We've been saying this all along. And I think we demonstrated in the face of this new competition, in the face of these new products that we had a great quarter. So it's -- and when you have somebody getting on a blower and saying, we just took back 40% of the rechargeable market, I'm thinking 40% of what number? Where is the data? There's no data. We gain 5 or 6 share points. Well, wow, if they did that, why don't you, let's disclose the data. Let's see what the numbers are. How can we talk about market share gains or losses or shifts of anything if we have no idea what the denominator is? So enough said about that. But we're faring quite well, I think, is the message I'm trying to get across in the face of new products being released by the incumbent player in this market. -------------------------------------------------------------------------------- Operator [10] -------------------------------------------------------------------------------- Next question comes from Chris Pasquale from Guggenheim. -------------------------------------------------------------------------------- Christopher Thomas Pasquale, Guggenheim Securities, LLC, Research Division - Director and Senior Analyst [11] -------------------------------------------------------------------------------- So Ray, you mentioned that you expect your mix to shift primarily to de novo cases going forward. Can you just remind us what your replacement mix was in the first half of the year and maybe give us a sense of where that stood in 3Q? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [12] -------------------------------------------------------------------------------- Sure. It was -- I mean, generally speaking, it was around 20% of unit volumes and it's diminishing from that number, right? So that's kind of what's going on. -------------------------------------------------------------------------------- Christopher Thomas Pasquale, Guggenheim Securities, LLC, Research Division - Director and Senior Analyst [13] -------------------------------------------------------------------------------- Okay. That's helpful. And then I was hoping you could spend some more time going into detail on the market development plans and the DTC initiative. Market growth here is going to be a bigger and bigger focus going forward. And it seems like raising awareness is going to be an important component of that. So you talked about taking a targeted approach. Are you focusing initially on certain geographic regions? Or are you calibrating it some other way? And then how are you measuring success there to know when it's time to sort of step on the pedal and ramp that up? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [14] -------------------------------------------------------------------------------- Sure. Chris, those are all good questions. Look, I think that measuring success is important, right? And you have to think about -- I think, impressions and clicks are not something that's really meaningful and tangible in terms of tracking that to revenue. So you got to go beyond that, right? And what is beyond that? Well, when people actually take additional action and they qualify themselves, that's the #1 step. Now we've taken, I think, an intelligent and enlightened approach where we actually have a third-party that we've contracted with, which is staffed with nurses, who are actually calling those patients who fill out the survey, the online survey, right? They click through, they get a survey, they qualify themselves, and then at that point, we're calling and following up with those people. Now based on those conversations, we can then do what we call a warm handoff into practices based upon ZIP codes and trying to be fair and all those kinds of things. So that's kind of how we're doing it. We're not doing physician locator stuff on our website. And I think that we've been able to get the benefit of going to school by seeing the journey that Inspire and the UroLift product from Teleflex has already gone through. And we've seen them shifting away from physician locators and just leaving it up to the patient to take the action. So we're being pretty proactive. So we're going to measure based upon how many patients we can actually drive into a given practice. Now we all know that not all patients are going to be absolutely ready for third line therapy on day 1, right? You could have this problem. You could have had the problem for many years, but you may have just tried a drug and maybe that's as far as you've gone. So they're going to be -- they're going to show up in all categories of where they are in the patient care continuum or the care pathway. So that's how we're going to measure it, right? I mean -- and in the end of the day, what's the whole point? The whole point is to drive procedural volume, right? That's the point. Create awareness and get people to understand that sacral neuromodulation is the way to go. So I think we're doing a lot to not just spend money without understanding what the result is. But it's way early, right? We're 1 month into this endeavor. That's why I mentioned, it's top of the first inning for us. So we're -- we haven't even gotten kind of up to that yet, let's say. So we'll be reporting more about this in the first quarter when we do our kind of Q4 and 2020 wrap up. And I have no problem with providing color. It's just that I just don't have a lot of information at this time. Ultimately, we've seen that radio spots work for medical devices. We've seen that television advertising works for medical devices. This is a time or the -- whatever the expression is, the time has come now. We've seen Masimo do it for pulse oximetry for use at home. We've seen it for UroLift. We've seen it for Inspire. So there's quite a number of companies now that are actually advertising on television. And our colleagues in the business, I mean, they wouldn't be doing this if it doesn't work. But it does require an investment of money. It is a campaign, and it takes time to be able to measure these things properly. So I know that was a bit of a long-winded answer, Chris, but hopefully, that was sufficient for today. -------------------------------------------------------------------------------- Operator [15] -------------------------------------------------------------------------------- Your next question comes from Adam Maeder from Piper Sandler. -------------------------------------------------------------------------------- Adam Carl Maeder, Piper Sandler & Co., Research Division - VP & Senior Research Analyst [16] -------------------------------------------------------------------------------- Maybe just 1 question on Q3, just around -- just a housekeeping question on the backlog benefit or the bolus. Are you guys able to quantify that to some degree, what you saw in July? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [17] -------------------------------------------------------------------------------- No. That's why we've been a bit squishy about saying it. I mean, there's some impact. If I go 1 level down, what I can see is I can see the replacement, right? We're able to track what is the de novo sale versus a replacement of InterStim II. So that's kind of -- we saw a bolus of these replacements in July, which then waned throughout the rest of the quarter. So that -- without giving you absolute dollar amounts or unit numbers, that's the phenomenon that we observed. And that's the reason for mentioning it. And it's not surprising also. We never -- as you know, Adam, we never expected to really participate in the replacement market. It was really not part of kind of what we thought about or did much about. It just turned out that there's been a lot of demand, right, to flip these patients from the old InterStim into our product. So we're happy to have that business. But the shift now towards more de novo procedures and the fact that we're continuing to generate revenue at a good clip, I think that's the direction that we would want to be going, right? So I'm happy to have had some replacement business in the past. It's now waning and that's fine. And we're replacing that with real -- with new patients coming into the program, which is ultimately what we all want. We're talking about market expansion. The market is not going to expand by doing replacements. The market's expanding for us by getting more de novo patients coming in the door and getting procedures. -------------------------------------------------------------------------------- Adam Carl Maeder, Piper Sandler & Co., Research Division - VP & Senior Research Analyst [18] -------------------------------------------------------------------------------- Great. And then just 1 question on the commercial organization. Just was hoping to get the latest update there, both in terms of rep and clinical specialist headcount, and kind of how you plan to have that progress over the next couple of quarters? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [19] -------------------------------------------------------------------------------- Yes. Thanks, Adam. Good question. It's -- suffice it to say that we're going to finish the year close to 200 people in total between sales managers, salespeople and clinical specialists. Maybe a bit over that line. And as we have said many, many times in the past that our strategy is to add more clinical specialists as case volume grows, and we will continue to do that. So would not be surprising for us to have a count of closer to 300 by the end of 2021. So we're going to continue to add those additional people to support increasing volumes throughout 2021. And when you look at -- if you run the numbers, based on what we just guided to, you're talking about $110 million, $112 million, maybe more if we're lucky. Next year, we're present to what consensus is. We all understand that if we're going to increase revenue by at least 50%, that means there's going to be a lot more cases for us to cover, so we're going to need more and more people to be able to do that, to maintain this level of how should we say, service and support that we're providing to our customers. They really appreciate that. We want to continue with that. So you can see that this is just logical, right, in terms of how do we get to the promised land? How do we support that business? -------------------------------------------------------------------------------- Operator [20] -------------------------------------------------------------------------------- Your next question comes from Kaila Krum from Truist Securities. -------------------------------------------------------------------------------- Kaila Paige Krum, Truist Securities, Inc., Research Division - Research Analyst [21] -------------------------------------------------------------------------------- Congrats on the quarter. Just a follow-up on Micro. Is there anything that you guys have been sort of surprised by as it relates to standing up their tactics or pricing strategies in the rechargeable segment? And I ask, I guess, specific to kind of the last month or so, it would be really helpful just to make that clear. -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [22] -------------------------------------------------------------------------------- No. Kaila, I appreciate the question. And the fact is that this is not our product. There has been so few devices that we know about, right, that -- I mean remember, we're calling and we're working with people who've already switched their business to Axonics. And yes, some of them may have done some Micro implants here or there, but it's the customers that we don't have that would be using that product, right? That's where Medtronic went. They went to their loyalists. They didn't come banging on our customers because they got -- they weren't -- you're not going to get rewarded that well, coming to people that have already switched and are happy with Axonics. So yes, of course, were there some procedures done that we know about? Of course. But we have really -- and even though we ask and we're looking for data and would love to be able to report to you, the fact is there's a paucity of data that's out there. And I just don't think that we're going to be the source of providing that direct feedback, right? It's just that we're asking. But on the other hand, we just don't know that much, and there aren't that many data points for us to really follow up on. As I mentioned earlier, just worth repeating, we're competing against the legacy product. We're competing against InterStim II. That's what's going on in the marketplace. That's what they're pushing. And there they're up to their -- all their other tricks, right? You all have heard it directly, right? This information, making both statements that are not backed up by facts or numbers, disparaging remarks about us. I mean, that's been their approach, and they continue to use that approach in the field. Our approach is to put the white hat on, take the high road and continue to focus on doing what we're doing because it's working. And we don't want to get into some battle of words and all the rest. It's bad enough that we have to even address these issues on these calls, right? So the direction to our team is, let's continue to plow forward, let's provide excellent service and support to our customers, let's talk about what we're doing, let's talk about the innovation, let's talk about the future pipeline of the company, let's talk about the fact that we are now here we are today. We just announced it. We now have a third-generation -- a device that has been filed with the FDA in less than 1 year or in a 1-year period. These are all things that our team can be proud of. I mean the whole MRI work that we've done to expand indications and so on and so forth. So I don't want to turn this into a political stump speech. It's just -- I appreciate the questions. I understand people are curious about it. But what we said earlier, Kaila, is, look, we're going to let our numbers speak for themselves. And I think so far, that's exactly what we've done. -------------------------------------------------------------------------------- Kaila Paige Krum, Truist Securities, Inc., Research Division - Research Analyst [23] -------------------------------------------------------------------------------- Right. Very clear. And then I guess, if I just annualize your current revenue, I mean, you guys are already annualizing at about $140 million. You're gaining momentum. You're launching a next-gen product next year, you're adding clinical specialists. You mentioned -- you're privy to where the Street is looking at for the next year at $155 million. I mean, is that sort of the right place to be and if there's any sort of comments just directionally that you guys might be able to provide, that would be super helpful. -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [24] -------------------------------------------------------------------------------- Sure. Yes. Thank you. I appreciate the question. Yes. I mean our statement about next year is going to be that, hey, we're comfortable with the analyst consensus. And we've said that all along this year, throughout this year for 2020. We've also been asked about it for 2021 and we've said the same thing. So we're focused on continuing to increase. Now you're correct. I mean, you just took our numbers, you're looking forward. But we're obviously looking to do better, and we are gaining new customers, and we're looking to increase the business. So our objective is to do the same thing next year as we did this year, which is to surprise people with overachievement. -------------------------------------------------------------------------------- Operator [25] -------------------------------------------------------------------------------- Your next question comes from Michael Polark from Baird. -------------------------------------------------------------------------------- Michael K. Polark, Robert W. Baird & Co. Incorporated, Research Division - Research Associate [26] -------------------------------------------------------------------------------- Maybe a question on the MRI nuances, I thought the webinar last week was very compelling. The physician that led that program admitted as a longtime InterStim user that he had 0 idea about the nuances of an MRI label until he put in time to learn about it. And at least for me, it was quite clear that your label is far superior to even the recent improvements of your peers. So curious what sort of physician response did you get to that webinar, number one? And then number two, what else can you be doing on this front to build awareness around what seems to be a clear differentiator, but admittedly, it's in the weeds nuance that could get lost in an elevator pitch? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [27] -------------------------------------------------------------------------------- Yes, I'm with you, Mike. It's pretty obscure. I mean suffice it to say that urologists and urogynecologist don't know much about MRIs. I mean, they -- their history with MRI as well, you can't get an MRI if you have an implant with an InterStim in your body. So it's not like something they ever spend much time on. So it's not unusual that they would be confused or easily confused or easily led to believe things just based on the use of some fancy terms. So this is why we've taken it upon ourselves to try to educate our physician customers about the differences and also about how all this works. And I think the key takeaway which we appreciate that you observed and noticed that is just the fact that with our product, you don't have to wait 60 minutes between scans, right? And most scans, as the radiologists explain, take more than 30 minutes to do, right? And in the case of our competitor, you got to reset the clock, right? And a 60 minute time out in between an MRI scan, I mean that's a nonstarter. That means, for the most part, you're coming back at another time, and that's a big inconvenience. And I think Dr. Buttrick, who spoke, I think that's the thing that really got him to understand. And then the idea of resolution, right, with the SAR rate and so forth, we can provide some better resolution as well. Now we haven't stopped. We put out a news release that we're now adding extremity coils to the MRI armamentarium, if you may. We're going to continue. But that's -- we're pretty much now at the end of the road, right? Once these other additional enhancements get approved, there's really nothing more that we could possibly do that would make it easier for patients or provide more flexibility for radiology technicians. So as Dr. Jay said on the seminar, when this current round of enhancements gets approved by the FDA, and we've done all the testing, and we are 99.9% confident that we're going to get the approval, then we're going to have, by far, the best conditions in this particular category and also better than even our colleagues in the Sacral -- in the spinal cord stimulation business for pain. So we think that this is important, right? In the end of the day, Mike, what's going to win the day? We believe it's the patient experience right? That's what's going to matter in the end of the day. And everything we're doing and even what I talked about today with respect to the third-generation implantable device. You can see the philosophy of our company. It's all about making it easier for patients so that they have a better experience about this because happy patients make happy doc, and they are the ones that provide referrals, right? So that's kind of what we're up to. And you're going to continue to see a steady drumbeat from the company with respect to these kinds of things. -------------------------------------------------------------------------------- Michael K. Polark, Robert W. Baird & Co. Incorporated, Research Division - Research Associate [28] -------------------------------------------------------------------------------- Appreciate that, Ray. Maybe a quick 1 perhaps for Dan. On the gross margin revenue, comparing it to the first quarter of '20, and I know it's just been a weird year all together and you're in very early stages of ramp. But maybe comparing it to the first quarter of 2020 revenue, noticeably higher gross margin within your target range, but perhaps a little lower from the 1Q '20 level, you're building inventory. Is that the key item there? Or are there other kind of small variances to call out that might have been at play? -------------------------------------------------------------------------------- Danny L. Dearen, Axonics Modulation Technologies, Inc. - President & CFO [29] -------------------------------------------------------------------------------- I think the way I'd phrase that, our gross margin in the third quarter, as we said, was 61.9%, which is in line with our internal plan, and it's consistent with past results, excluding the second quarter of this year when, obviously, volumes and margins were lower due to overhead absorption and all as a result of COVID. And so what we've been projecting is as we ramp, there is a certain process of scaling up, and there is some inefficiency combined with, you get purchase volume discounts by building in larger quantities and longer production routes, which is what we're seeing. As we scale and go over the long term, we're still expecting gross margins to be in the low to mid-70%. Does that answer your question? -------------------------------------------------------------------------------- Michael K. Polark, Robert W. Baird & Co. Incorporated, Research Division - Research Associate [30] -------------------------------------------------------------------------------- Yes. No, I think it's good. -------------------------------------------------------------------------------- Operator [31] -------------------------------------------------------------------------------- Your next question comes from Larry Beigelsen from Wells Farger. -------------------------------------------------------------------------------- Unidentified Analyst, [32] -------------------------------------------------------------------------------- This is Kevin on for Larry. Congrats on the nice quarter. I just wanted to clarify a number I noticed in the press release as a preface to my question. You said you had over 5,500 patients that have been treated with your product. I'm just wondering, is that through the end of the quarter or through October? So if I do the math, I'm getting slightly below that if I use -- go through Q3 using your revenues. With that, my question is kind of around putting a finer point on October. And not to beat a dead horse here, I'm just curious, to parse out what type of headwinds you're seeing of canceled procedures in October? And if you're now below the run rate exiting Q3? Or is it more you're seeing cancellations today for procedures that are coming up in the next 2 months? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [33] -------------------------------------------------------------------------------- All right, Kevin. So your first part of your question was the number that we put out there. This is since October or well, I'll just say November 1 in effect. I think our first procedure we ever did was maybe October 28, and maybe the next day was a Saturday. I don't remember exactly, but it's a year and that's what we're reporting on. So -- and that wasn't just a U.S. number. It's just -- that's the number, right, we have to date. So I don't think that's controversial. The second part of the question was about? -------------------------------------------------------------------------------- Danny L. Dearen, Axonics Modulation Technologies, Inc. - President & CFO [34] -------------------------------------------------------------------------------- Canceled procedures. -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [35] -------------------------------------------------------------------------------- Canceled procedures. So okay. How do you get visibility to cancel procedures? Well, we don't. We find out about canceled procedures pretty much a day or 2 or 3 or maybe a few days before the procedure is going to take place. So they always come to -- as a surprise to our people in the field, right? I mean, that's kind of how it happens. We're not involved in the scheduling of these patients. We've got to go by what the physicians and the hospitals tell us and we show up, right? That's kind of how it works. So what we saw was -- and this is not something that we can track absolutely, right? This is a lot of anecdotal conversations that you have with your people in the field, hey, what are you seeing? What's going on? And when you start to ask these questions, people say, "Well, I've seen more procedures canceled in October than I have from when we got back in business in the early part or, let's say, in really kind of May, June and then from there." That's what's happening. And it just seems that the pace of these cancellations is kind of tracking to what you hear on the news. I mean, it's not -- this is not some amazing enlightened comments that I'm making about this. This is just what's happening around the country. And I think everybody sees it, everybody knows that this is what's going on. October was a good month for us. And I think despite the headwinds and everything else, we still continue to plug along, right? So I'm really doing my best to try to provide a serious and balanced outlook for what is only 2 more months of this year. And I just want to put this in perspective, and I appreciate the question, Kevin, since I haven't said this. I mean, the expectations for our company were significantly lower than what we're going to end up with. And this is despite the pandemic, and despite that we were really out of business for 2 months. So I would hope that when people -- when there was an $83 million expectation, then there's a pandemic, and then we're going to finish the year at what we hope to be between $110 million, $112 million, maybe more, that people would recognize that we're doing a good job as a company. And with our competitor having responded with some new products and some new technology, hats off to them. If they're going to respond with some direct-to-consumer advertising, which I heard them say, then we think that's fantastic news. And as Dan has said many, many times, this is going to benefit -- increase and the size of this market is going to benefit Medtronic and Axonics. And so we shouldn't be banging at each other, and we should just simply be focused on how we're going to grow this business. And there'll be plenty of business for everybody to be had, right? And I know they're bullish, they're talking 20%. Well, great. If the market's growing 20%, then we're thrilled to death, right? Because that is consistent with what we said was going to happen, and we're happy. If Medtronic is doing more, fantastic. We're doing more. People know what our numbers are. We're curious about theirs, but we think it's fine. So we're focused on what do we need to do to grow this business and to see the market expand, and we're committed to this mission, if you may. And so I know I went a little bit off the rails there, Kevin, but I appreciate the question, and we're going to continue to focus on executing our business. -------------------------------------------------------------------------------- Unidentified Analyst, [36] -------------------------------------------------------------------------------- Absolutely. I appreciate it. My last 1 is just -- I wanted to spend a minute just on the primary cell device. You mentioned the Gen 3 product coming out, but we didn't hear anything about the primary cell device. I think you've said in the past, you're planning to file as early as you can in 2021. I'm just checking in if that's still on track? And big picture, how would you frame up the level of interest in that product and what type of impact it could have to you? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [37] -------------------------------------------------------------------------------- So we think it can have a big impact on our business. We think it will help us grow. I don't think it's going to help us much in 2021, right? Just based on the review time and all the rest. But as you look into the future, I think it's going to be a big deal. Now in the prepared remarks, I indicated that we expect to be able to get that product through validation verification and get it filed with the FDA within the first quarter of next year, so that's our objective. Everybody is focused on that and we feel pretty good. The product looks great and I'm being very, very careful not to provide specifications on this product. When we file with the FDA, we will fully disclose what this product is all about. But there's just -- I don't feel compelled on November 4 to provide the specifications to our competitor. -------------------------------------------------------------------------------- Operator [38] -------------------------------------------------------------------------------- Your next question comes from the line of David Saxon from Needham. -------------------------------------------------------------------------------- David Joshua Saxon, Needham & Company, LLC, Research Division - Analyst [39] -------------------------------------------------------------------------------- I guess, first, just on rep productivity. I think Medtronic is around the $3.5 million range. Just wanted to see how you're thinking about the long-term productivity for Axonics' reps. And if maybe longer term, you can get above that. -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [40] -------------------------------------------------------------------------------- So thank you for the question. Given the number of apparently -- let me be clear about how I want to say this. Based upon what we heard from Medtronic recently, apparently, they have close to 500 people working for them in the sacral neuromodulation category. So unless there's hundreds of these people that are out in the rest of the world, which is not that logical considering it only represents historically about 10% of their uptake. They must have a lot more people in the United States than would support a $3.5 million number. So the $3.5 million number that you got, I think, came from us based upon how we calculated the historical revenue in the United States and divided it by the number of reps that we understood that they had. Now apparently, according to them, they have outpaced the number of feet on the street, and they have twice as many people as we do. So if they have twice as many people as we do, then that means their productivity is significantly less than the number you just quoted, right? So once again, we're dealing with a bunch of Kabuki numbers here, unfortunately. Do I believe that our reps can produce $3.5 million of revenue per year? Well, the answer is, absolutely, I believe it, because we already have a few reps that have done that in this year despite the pandemic and so on and so forth. So the answer is, absolutely. That is the kind of productivity that we can expect in future periods. As we've indicated, the number of accounts that we have is a leading indicator of what we think is going to happen in the future. And there's no reason why our people cannot be productive at this level. And you could imagine that I don't have -- there's not 1 salesperson working for us today that doesn't believe they can do this, and that's important. And we've got folks that have just -- I mean, they are pointing the way as to what is really possible in terms of generating revenue. So I don't think we're -- it's just going to take some time, right, because when we talk about this, we always revert to the average, right? And as everybody knows, when you're first starting, the average is a bit misleading because you've got people in the top 20 that put really big numbers on the Board, and then you always have the people in the bottom 20, that for 1 reason or another are slower on the uptake. And so that's the game. So for us, it's -- I'll just parrot what our Chief Commercial Officer says on a regular basis, right? It's really -- you expect the top 20 to blow out the numbers, the bottom, you're always going to have a bottom, no matter what. It's the people in the middle that are going to make a break in, and that's where we need the increased productivity to be able to make numbers in 2021. -------------------------------------------------------------------------------- David Joshua Saxon, Needham & Company, LLC, Research Division - Analyst [41] -------------------------------------------------------------------------------- Great. That sounds good. And then just on utilization, can you talk about the trends you saw during the quarter, maybe relative to the first quarter up through mid-March? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [42] -------------------------------------------------------------------------------- Yes. I'm not really sure that the word utilization applies to our business. And it's not like we put a piece of capital equipment in, and people are utilizing it, they're not utilizing it. This is about really patients walking in the door, right, and getting them into third line therapy and getting a device implanted. So that's going to be all over the board, right, depending upon the type of customer you have. Are they private? Are they a hospital employee? Do they have their own ASC? I mean, there's a lot of different motivations. But then I think what Neil, in particular, we've tried to communicate is that we've kind of put this number around what do we think an account is worth on average, and we've targeted that at about 30 procedures per year. So that's kind of how we look at the business. But once again, not all customers are created equal, some do substantially more than that and others do less. So it's a little bit misleading to talk about that. So this is about de novo patients and getting them in the door. And for us, everything is brand new. We don't have a historical context with any of these customers. We're going to now first start to see that in 2021, where we really can compare what did -- Dr. Cohen as an example, what did he do with us in 2020? Okay. Granted. There was a pandemic and all that, but how much more productive would that practice be for us in terms of procedural volume in '21. So it's too early, right, really to ask us because we just don't have the historical data, and everything has been mixed up because of the pandemic and different headwinds at different times and so on and so forth. So we'll be as forthcoming as we can. I'm just being honest by saying we really don't have that data, and I don't want to make up anything that would be potentially misleading. -------------------------------------------------------------------------------- David Joshua Saxon, Needham & Company, LLC, Research Division - Analyst [43] -------------------------------------------------------------------------------- That's fair. Just a quick follow-up on a comment you just made about the assumption that 1 account is worth about 30 implants per year. So that -- I mean, doing quick math, I mean, that -- I'm getting $250 million to $300 million annualized. Is that kind of the right way to think about it as things normalize? -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [44] -------------------------------------------------------------------------------- Yes. I think what we have said is that the number of accounts is a leading indicator, right, of what's going to happen in future periods. So sure. I mean, we look at kind of our book of business, I mean, yes, you can do quick math, and you can say, well, certainly, by 2022, we would be hoping to be able to have those kinds of numbers across the board from all our accounts. That's the future for us. There'll be some more customers that will come our way. Some are going to be more or less productive. But it is an indicator. If you don't have a customer, you're not doing the volume, that's for sure. -------------------------------------------------------------------------------- Operator [45] -------------------------------------------------------------------------------- Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect. -------------------------------------------------------------------------------- Raymond W. Cohen, Axonics Modulation Technologies, Inc. - CEO & Director [46] -------------------------------------------------------------------------------- Great. Thank you.