We've got Vericel Corporation with us, specifically Nick Colangelo, the CEO, and Joe Mara, the CFO. Thank y'all both for being here. We appreciate it. Happy to be here. Thanks. Thanks for having us. Absolutely. And this is a fireside chat format, so to the extent there's questions from the audience, feel free to raise your hand. We're happy to take those. But I think the best way to get started here would be to just turn it over to the experts and give y'all an opportunity to give us an overview of the business, the way you're thinking about it and some of your strategic priorities. Great. Well, thanks, George. Again, it's great to be here. And just by way of background, so Vericel is a leading provider of advanced therapies for the sports medicine and severe burn care market. We have a portfolio of highly innovative advanced cell therapies and specialty biologics that really are focused on changing the standard of care for patients with knee cartilage injuries and severe burns. So our lead product is MACI, which is a combination device biologic product that uses a patient's own cells to repair damaged cartilage and restore function. And it's become. We launched it in 2017, and it's become the leading restorative cartilage repair product on the market. In the burn care space, which is our other area of focus from a therapeutic area perspective, we're really focused on the treatment of hospitalized patients with severe burns. For these patients, the treatment pathway entails, first of all, removing the burn tissue or eschar, and then covering the wound so it can heal. And we have two products that address each aspect of that pathway. So NexoBrid, which we just launched in the U.S., is a mixture of proteolytic enzymes that basically recognize proteins that are denatured from thermal burns and dissolves that tissue topically applied and retains the viable tissue. And then Epicel, which is our skin product that's been on the market for about 30 years, is then used to cover full-thickness burns. So it's the only FDA-approved permanent skin replacement for large, full-thickness burns. So we think by being able to address both aspects of the treatment pathway for these hospitalized burn patients, that we really have the premier portfolio in the burn care space. And just a note on our portfolio overall, it's really very unique in that we have significant competitive barriers to entry. So as I mentioned, MACI, our lead product for cartilage repair, and Epicel for the treatment of severe burns, are regulated by the FDA as combination device biologic products. So there's no established generic pathway, biosimilar pathway, 510(k), 510(k) pathway for these kinds of products. So really, anybody who wants to enter the market has to go through pretty rigorous clinical development, and there are no near-term competitors on the horizon for either like products, for either MACI or Epicel. And similarly, NexoBrid, which is an orphan biologic product in the U.S., has patent protection into the 2030s, but also biologics data exclusivity, and then orphan market exclusivity. So we think it's just an exceptionally strong portfolio and really provides us a great foundation for growth in both revenues and profits as we move forward in the years ahead. And just a quick note on the financial profile of the company. You know, we have a really strong track record of both revenue and profit growth over the past several years. So from a revenue perspective, we've had since we launched MACI in 2017, even through the COVID years, we've had 20+% compounded annual revenue growth over those years and very strong profit growth. So we reported Q3 earnings last week, and same kind of story. We had strong revenue growth, record third quarter revenue, and then strong profitability. So our revenue was up about 18% to about $46 million. Gross margin was up about 160 basis points over the prior year. We had about $5.5 million of adjusted earnings, $7 million of operating cash flow, and we ended the quarter with about $150 million in cash and no debt, so really well-positioned. And for the year, revenues are up nearly 20%, and so we ended up raising our guidance to $192.5 million-$197.5 million for the year. And importantly, as we look out... So revenue's accelerated this year. As we look into 2024, we actually expect a higher revenue growth rate and continuing expansion of profitability just based on the strength of our core MACI business, which I'm sure we'll touch on in a moment, as well as the launch of an arthroscopic delivery system for MACI and accelerated uptake for NexoBrid. So excited about kinda where we are this year, higher growth rates next year. And as we look out over sort of a multi-year period, we expect that we'll be able to continue that 20+% compounded annual revenue growth rate, that our gross margins will move from what is sort of the high 60% range now into the 70+% range, and our adjusted EBITDA margin will go from what's kind of the mid-teens now up to 30+%. We think we're really well positioned as we move forward. Absolutely. Well, I think that's a great overview, and, you're right, we're gonna, we're gonna start with MACI. Yep. That's a significant portion of the revenue and a good area to dig into, I think. You mentioned the growth has remained really strong this year. How do you think about the drivers to that, between growth in surgeons taking biopsies- Right ... number of biopsies taken, and, biopsy conversion rates? Yeah, and it's probably helpful to take a step back and just explain what MACI is, so biopsies and things like that make sense. Yep, yep ... to those who are listening. So as I mentioned earlier, MACI's a product. Again, it's a combination device biologic that uses a patient's own cells to repair cartilage. So, you know, cartilage's injuries are very frequent. Interestingly, unlike most of the other tissues in your body, cartilage doesn't have intrinsic healing properties. There's no blood vessels that bring repair cells. There's no lymphatics that clear away the damaged tissue or cellular debris. There's no nerves. So really, a cartilage injury on the knee is like a pothole on the surface of the knee. And the starting point for MACI is, while surgeons are in there doing investigational arthroscopy or a chondroplasty, where they're cleaning up, you know, the floaters in the knee and other issues, they'll take a small biopsy of healthy cartilage. They send that to our manufacturing facility, where we isolate the chondrocytes, which are the cells that produce cartilage. We expand them, and we seed them on a resorbable collagen membrane at a density of about 500,000-1,000,000 cells per square centimeter, and that is the membrane that's surgically implanted for MACI. Yep. That's just the background. When we think about the growth drivers for MACI in its current state, as George alluded to, it's really how many surgeons out of our 5,000 targets are taking biopsies because that means they've incorporated MACI into their treatment algorithm, and it's really the breadth of our penetration into our target surgeon base. How many biopsies per surgeon are we getting? Because they typically have full schedules, and the more biopsies you get per surgeon means they're identifying more of their patients, that are eligible to be treated with MACI. How those biopsies convert into implants, because that's when we recognize revenue. And then the fourth growth driver for us is really price- Yep ... because this product is approved as a BLA, you know, we have more sort of biotechy pricing power than sort of, you know, kind of typical med tech products. So as we think about the growth drivers going forward, you know, as we entered the year, our guidance was really centered... You know, COVID obviously disrupted elective surgeries and so on, but even during that period, you know, we grew 18% in 2021. We grew 18% in 2022, and as we came into 2023, we said, "We'll grow at that rate just because we're adding so many new biopsy surgeons, plus our typical price increases." And as we've gone through the year, we've actually increased our MACI guidance, you know, three times. and you know, to right now, it's $160 million - $164 million, and really that's because we've seen outsized growth versus our expectations in terms of the number of surgeons taking biopsies. Yeah. So we've had a number of... You know, MACI's on a pretty hot streak right now. It's up 26% for the year, five straight quarters of 20+% growth, and that's really been driven by, you know, really since the COVID headwinds abated sort of after the third quarter last year, to sort of record numbers of surgeons taking biopsies each quarter, record numbers of biopsies. So that top of the funnel- Yeah ... is really what's driving the growth for us. And, you know, biopsies per surgeon have ticked up a little bit, but as you're adding so many new surgeons, you know, you tend to, they obviously are just getting started, and they ramp up over a year or two-year period. So they have lower biopsies per surgeon, but the more established surgeons have higher ones, and so it's remained relatively stable, maybe ticked up a little. And the same thing for conversion rate. How have those biopsies converted into implants? Our more experienced surgeons convert at a much higher rate. Our newer surgeons, because they're just starting, kind of convert at a lower rate. But, you know, overall, it's remained pretty steady, and then of course, we take typical price increases each year. Yeah. That's kind of how we're viewing the drivers. Right now, it's about biopsying surgeons and growth in biopsies. Over time, you know, it will continue to be biopsies per surgeon, conversion rates that will mature as our customer base matures. Okay. You mentioned the 5,000 targeted physicians. Mm-hmm. Where are you in penetrating that market, and what are the keys to accelerate? Yep, so- -that physician growth? Yeah, so we... You know, back right as COVID was starting in April 2020, we actually, you know, had gone through a pretty large targeting exercise the year before in a Salesforce expansion and had gone from about 50 reps to 76 territories, and we increased our targets' surgeons from about 3,000 to 5,000 surgeons. And we can buy CPT code data and see who's doing high volumes of cartilage repair and open procedures, and that's how we sort of expanded. You know, at the time we expanded, we were still growing pretty strongly with respect to those 3,000 targets. I think in 2018 to 2019, it was up by about 25%. We had about 1,400 surgeons out of those 3,000 taking biopsies in any given year. Cumulatively, it was higher, so a little under 50%, but growing fast, and then cumulatively, over 50% penetration. And as we moved to 5,000 surgeons, we haven't given kind of the precise number, but over the years, you know, basically, we ended, you know, last year around 2,000 surgeons taking biopsies. We said on our earnings call last week that we're on track for double-digit growth again in biopsy surgeons, so you can do the math, and see that we're again back to a little under 50% on an annual basis, cumulatively more than that, and we expect that that penetration will continue. Yeah. So, you're at a similar point- Yep. as where you were the last time you raised that target penetration or target physician- Mm-hmm - market, as well as, invested in some additional sales folks. Yep. At what point would you look to expand that target market again and see a similar investment in sales? Yeah, well, you know, I think absent sort of a new innovation with arthroscopic MACI, which I'll get to in a moment- Sure. You know, we probably are at a point where, you know, 76 territories across the country is a pretty manageable number, right? Mm-hmm. So they can get around their territories pretty easily. And, you know, even this year, we've been piloting sort of junior reps who can cover biopsies and cases while our, you know, more senior reps are out there focused on demand generation. And I think, you know, that's kind of our formula going forward. And, you know, just the increase in the surgeons that we then have to support is really driven by, you know, the prior technology that involved sort of this kind of a product was very invasive, and it was really sort of a top cartilage repair surgeon, niche-y kind of product at the big academic centers and things like that. Mm-hmm. As MACI's become simpler and less invasive, you know, you've seen that sort of broader adoption, as you also often see in the med tech space. Now, we've got sales reps who, again, have these manageable territories, and they can have a better reach and frequency on their target surgeons. Our marketing team does a great job in peer-to-peer education, and we've, you know, found that many of the new biopsying surgeons, the majority of them, in fact, have participated in one of our peer-to-peer programs. All of that comes together to expand that surgeon base. And then again, just in terms of appropriate reach and frequency, it'll be kind of like we did in the burn care space when we added a new product, you know, 6-12 new folks, but kind of deploying them differently because territory realignments, all the relationships that you have with surgeons, you don't want to disrupt those unless- Sure ... there's a good reason to do so. Okay, maybe shifting to the biopsy conversion rate. Mm-hmm. Could you remind us, it was a little volatile through COVID? Right. Could you just remind us some of those dynamics and your expectations? Yeah ... how it's trended this year in terms of it stabilizing and then your expectations going forward? Yeah, so, you know, the conversion rate pre-COVID had sort of been in the mid- to high-30% range. And people say: Well, wait, if you have a biopsy, why doesn't everybody go on and have the sort of reparative surgery? And the reality is, like all of us, when we have pain, in this case, they have pretty debilitating knee pain, but they can make a choice to say, "I'm either going to live with my pain, or I'm going to stop doing the activities that I like to do, like jogging or playing soccer or whatever." And that's our typical MACI patient, our sort of weekend warrior, younger, active patients. But they make decisions on sort of different kinds of exercises or whatever. So the conversion rate has never been and never will be 100% of patients moving on. But it was in the mid- to high-30% range, and it was ticking up since, you know, we've been running the business. Stable overall, but you see this movement in experienced surgeons, our high, you know, higher users, they're well north of 50%. The new ones, again, because you take your first biopsy till you do your first implant, your conversion rate is 0. So you're adding a lot of docs on that end. So overall, it was remaining stable at that mid- to high-30% range in COVID, pre-COVID. During COVID, as we all know, patient flow dynamics changed, and it ticked down a few points, and now we're kind of right back at that pre-COVID place or dynamic where you know, key segments of our existing surgeons are moving up on the conversion rate. We're adding so many new docs that it's kind of staying stable, but again, we think the conversion rate will mature over time as our customer base matures. And we certainly take a lot of activities, whether it's in medical affairs, and, you know, we had a publication from one of our leading KOLs last year that said, "Even between the time you take a biopsy and do an implant, those defects on the knee grow, and often you end up having more defects." And then, you know, obviously, the sales force is always out there trying to get surgeons to move forward from a biopsy to an implant. And again, our marketing programs are built around those things as well. So we're doing, you know, everything we can to get those conversion rates up, get surgeons to be a little more directive. Like I always say, when you go to the dentist, and they say, "You have a cavity, come back next week, we're filling it," I'd love our surgeons to kind of- Yeah ... all be doing that as well. So. Okay, that's, that's helpful. You touched on this a little bit, but could you speak to the differences between experienced surgeons and younger surgeons and that biopsy conversion rate? Given the growth in, in surgeons- Right ... could you talk about maybe how biopsy conversion rates have changed with the more experienced surgeons and Yeah, I mean- Matching those two dynamics. Yeah, as I mentioned, you know, again, because we have this sort of, growing surgeon base with, again, the most experienced surgeons, high-volume surgeons, you know, they typically convert at much, much higher rates than the average. And again, when you've got the new surgeons coming in, you know, they tend to convert at a... maybe it would help to kind of say, you know, we actually end up cryopreserving these biopsies. So once we process the biopsy, we isolate the cells, we do a first-pass expansion, we cryopreserve the cells, and we hold them for 5 years. The reality is, sort of if they haven't converted to an implant by, you know, a year to 18 months, they typically won't do it. I mean, sometimes, but not as often. The median time is about 6 months from-... when they move on, and that's just because it's somewhat the normal flow. You go in, you get your knee scoped and cleaned up. They take a biopsy, you come back 6 weeks later. Is it still hurting? Okay, what do we want to do? And so you're never—it's always going to be a month, 2 months, whatever. But, you know, as people kind of decide when they're going to do the surgery, it typically is, call it 4-6 months, the median, in terms of- Mm-hmm ... of when they convert. So you know, that dynamic is at play as well when you think about, you know, new surgeons. They take a biopsy, they're not going to treat a patient typically for 4-6 months, right? Even if they are going to convert. So that's kind of what keeps those rates, the dynamics that we talked about. But again, as our customer base matures over time, we'd expect that to tick up just naturally. Mm-hmm. Plus, then you've got all the initiatives, you know, from a commercial and medical standpoint that I mentioned. Okay, and you mentioned the biopsy is viable for five years. Mm-hmm. Have you seen any changes in the conversion of biopsies that were taken two, three, or four years ago, and the rates? Right ... that those are being converted? That would suggest that maybe patients are deciding to come back and have that procedure done. Or is there any way to frame up that as a potential backlog of patients that you could see coming over the next five years? Yeah, I'd say the curve has remained relatively the same. You know, prior to COVID, when we first launched MACI, you know, the prior generation product, as I said, it was called Carticel. It was a very difficult procedure because the cells were in suspension, and it's hard to fill a pothole with a solution, right? And so it was a very complex procedure, and at that point, conversion time frames were about the same as I just described. Pre-COVID, with MACI, because it's so much simpler, you know, we saw that median time come down to more like 4 months, and then COVID hit, and it sort of moved back out to 6, because again, you know, patients just weren't coming back to see their doctors, as you know, on the same cadence that they had previously. That kind of moved just in terms of when, you know, the median time moving on to an implant. Mm-hmm. At the, you know, the ones that didn't move or whatever, didn't move on to an implant, they're such small numbers at that point that you really couldn't see any trends that have changed yet. Sure. Now, we'll see over time, right? I mean, the game's not over yet, right? Because COVID, you know, we'll still be holding on to those biopsies for the next couple of years, and we'll see if, as activities resume, and people become as active as they were before COVID, you know, whether they decide to come back or not. Okay. Okay, maybe shifting to the arthroscopic option- Yep ... you mentioned this at the top. It's expected to be approved, I believe, late in the second quarter. Yep. There's presumably, though, some learning curve with getting physicians trained, and then also the time you mentioned between a biopsy's taken and, and implantation. So how should we think about growth, in MACI related to arthroscopic delivery in 2024? Yeah, and just again, sort of a, a higher level, sort of evolution here. As I mentioned, Carticel was a highly invasive, technically demanding surgery, a niche product at the top cartilage repair specialists. MACI was really a technological advancement because it was a simpler procedure. Now all you do is, you know, you get a membrane, you cut it to the shape of the defect, you glue it in, right, with a, using a mini arthrotomy rather than opening up the whole knee. So that's what's sort of you often see in med tech as these, whether they're cardiovascular stents or otherwise, as these procedures become simpler and less invasive, you get a broader surgical adoption base, right? Arthroscopic MACI is the next step in that technological innovation. So now you're taking what's a pretty minimally invasive surgery now and making it even less invasive. When you think about sort of the cartilage repair market, you know, we have an addressable market slide that starts at the top of the funnel that says there's about 750,000 cartilage repair procedures that are done each year. And by the time you come down to MACI, about half of those, you know, fit within the MACI label because it's a broad label. We know, though, that surgeons think about different types of patients and different options, depending on the size, the location of the defect, their age, will they do rehab? And then insurance, which MACI's got great insurance coverage, typically requires that the defect be 1.5 or 2 square centimeters or above to be eligible for MACI. So, you know, we get down to our 60,000 patients that are eligible for MACI. You know, as we were thinking about the arthroscopic option, obviously, anytime it's a less invasive procedure, easy for, easy for the surgeons. You know, most of the things they do in the cartilage repair space are done arthroscopically already. So of the 750,000 procedures each year, about 500,000 are these chondroplasties, where they just scope the knee, clean it up- Yeah ... shave away cartilage fragments and get rid of the floaters, things like that. Another 200,000 are microfractures. Those are done arthroscopically. So virtually everything's already done arthroscopically. The only thing, you know, MACI's not, it's a mini open procedure now. The other things they do is use cadaver products, so osteochondral allografts, where you take a plug of bone and cartilage from a cadaver knee and plug it that way. Those are open procedures. So you know, we're kind of moving even further into sort of the mainstream of how these surgeons treat cartilage repair. So we developed a set of instruments that are specific for MACI. Because we're not changing the drug substance or drug product, we didn't have to run a clinical study. We're taking the same product, same cells on the membrane, and just delivering it arthroscopically instead of through an open procedure, where we already have an instrument kit to do that. So, you know, again, and it's designed to treat 2-4 square centimeter defects. So these smaller defects on the femoral condyle, which is the end of the thigh bone, and that's the biggest part of our addressable market, and we think we'll have really the most competitive play now, because clinically proven product that can be delivered arthroscopically, where you can't do that with things like osteochondral allograft. So we're really excited about that opportunity. So yeah, we had said publicly we'd complete a human factors study. Again, we didn't have to do a clinical study because it's the same drug product. You just have to demonstrate that surgeons can follow the instructions and deliver the implant. So that's already been completed. We said we would submit it to the FDA by the end of the year. It's a Prior Approval Supplement to the BLA, so it's a 4- to 6-month review period. So yeah, late in the second quarter, as you mentioned, is when we would expect to have the instruments and an approval, hopefully from the FDA. And then because of the timeframes for when you take a biopsy to when it goes to an implant, we'd expect the revenue impact later in the year. Now, there's kind of two aspects to that as well. So we've got all these biopsies that haven't converted yet, but we receive a biopsy. There's a biopsy transmittal form that, you know, identifies the size, the location of the defect. So clearly there'll be some biopsies for defects that would fit within these arthroscopic instruments. And so we'll obviously go back and have discussions with surgeons around that. Yeah. And then, you know, there's also the prospective aspect, where they'll start looking when they're, you know, doing those investigational arthroscopies for defects on the femoral condyle that are 2-4 square centimeters. And that's kind of the existing MACI surgeons, right? Where they have biopsies they've already taken. They'll start thinking about, you know, that size defect on the femoral condyles. There's also a whole set of other surgeons who only do or predominantly do arthroscopic procedures that will be new customers for us and will increase our targets. For them, it's definitely going to be more of a prospective thing. So again, I'm sure we'll get some immediate adopters out of our current group- Mm-hmm. -who helped us design the instruments and participated in the Human Factors Study and so on, but the new ones, it will really be forward-looking revenue. Okay. And I believe you mentioned on the earnings call, there's 2,000-3,000 surgeons that only do arthroscopic. Yep. How many surgeons of your current customer base would shift to arthroscopic delivery, would you expect? Yeah, so there's, you know, so when we going back to the sales force sizing and our targeting exercise, we bought data on 12,000 surgeons. We were calling on 3,000, we added 2,000 more, and we just looked at the intersection, because you can buy codes of cartilage repair procedures and open knee procedures. And we said, "Who's doing high volumes of cartilage repair and open procedures?" That's our target list. There was a group of about 5,000 surgeons who did only arthroscopic procedures, or there was no open data for them. And in some ways, it's kind of a generational thing. The younger fellows coming out now, they do everything arthroscopically. Yeah. So they don't even think about MACI, you know, for cartilage repair, just because they don't do those kinds of o- Mm. Open procedures. So of those 5,000, there were probably 2,500 that did high volumes of cartilage repair, and of those, you know, we're going through that process right now to say: Who among those do we think would be good targets? And I don't know if it'll be 1,000, 2,000. We'll probably be somewhere in that range- Okay ... of new surgeons that we will add to our target list. So that's one piece of it. For existing surgeons, as we did our market research, you know, we had non-users, we had current MACI users, and regardless of their current usage, either if they're users and they did higher or lower volumes, or they just weren't using MACI right now, you know, they view this as a pretty innovative development in the cartilage repair space. And if they're current MACI users, they'd expect to do more procedures, and then obviously, if they weren't MACI users, they would expect to start shifting some of the things they currently do over to the MACI arthro procedure. Okay, that's helpful. Maybe to take a little bit of a step back and put some of those comments together, beyond 2024, how should we think about the longer-term opportunity that arthroscopic delivery creates in terms of MACI procedure volume? Yeah. Well, as I mentioned, of the 60,000 patients that make up our current addressable market each year, about 20,000, or a third, basically have the defects that I described, 2-4 sq cm on the femoral condyles. And, you know, MACI's right now kind of a go-to product for if there's larger defects, 4 sq cm or above, I mean, those are big defects on the knee, or patella cases. So the back of the kneecap, where you have cartilage, there's often injuries there as well. So that's kinda the go-to for MACI right now. Then we have double-digit share in those patella cases, which are about 10,000 per year. There's twice as many femoral condyle defects of the size I described, so 20,000, and if we had the same share in those patients, we'd essentially double our business over the next several years. So we think, you know, we've got the core MACI growing very strongly because of the great clinical outcomes and the ease of the procedure and the great reimbursement, and then you add arthro on top of that, you know, we think it's gonna have a pretty meaningful impact on the business and the company, going forward. Okay. And as we think about the potential impacts to, to margin, could you give some detail on maybe any pricing differences with arthroscopic, how, those tools, the arthroscopic delivery tools- Yeah -change that margin profile, if those are manufactured in-house or- Right -how, how we can kind of think about some of those puts and takes? Yeah, so just by way of background again, you know, the MACI, because it's a biologic product, you know, is, is reimbursed under a J code, so like a typical biotech product. And, you know, the reimbursement for us is north of $50,000 per implant, and that's not gonna change with arthroscopic delivery. So- Mm-hmm... the surgeons don't have to buy the product like they do with other medical devices. They can, you know, we have a specialty pharmacy that distributes it, which is required under state pharmacy laws. And, you know, if they want to buy and bill, we can do that as well, which happens in about 20% of cases, if they happen to have a contract with that patient's payer. But typically, that whole reimbursement of the product itself is kind of outside of kind of the surgeon or the facility. The surgeons do get reimbursed for the procedure under a CPT code, and there's a facility and so on. So the price of MACI itself won't change or the revenue for us. Okay. You know, the reimbursement to the surgeon is gonna be pretty similar because there's an implantation code. So from that perspective, things will be the same, and they really just kind of have an unfettered option to just say, "I want to do this case open or this case arthroscopically," depending, again, on the size and location of the defect. So it really will expand their options. In terms of the instruments themselves, you know, we work closely. We have a, as I mentioned, an implant kit right now where when a surgery is done, and, you know, we've innovated a little bit on the instrument side. Nothing like we're doing with MACI arthro, where we have, you know, custom cutters, so they can kind of hold up an instrument, score the cartilage, and then stamp on the membrane. It's the exact same size, so anything that makes it simpler and faster for them is great. Yeah. So we've already done that stuff, and we work with a vendor who has helped us with those instruments to design our MACI arthroscopic instruments. And, you know, they're commercially gonna manufacture them to start. And, you know, that's incorporated their ability to supply us the commercial instruments, is kind of built into our timelines for launch. Yeah, just and just to add on the margin piece of that. So, you know, we wouldn't really anticipate any meaningful change in our margin. So as Nick alluded to earlier, you know, as we think about this year from a gross margin perspective, we're in that high 60% range. As we think about the mid to long term, we think we get to that 70% plus. We're obviously not too far from that right now. So, you know, I think all of this, I'd say, is incorporated, and it's not meaningfully different as we think about the margin profile. Mm-hmm. Mm-hmm. There could be some ebbs and flows in quarters just based on seasonality of our business, but, you know, big picture, you know, this really doesn't have an impact on our, our long-term trajectory. Okay, okay. Maybe one last question on MACI. I have to ask the obligatory GLP-1 question. Right. I thought y'all did an excellent job on, on the earnings call, kind of covering some of those, those details. But can you just remind us why you don't expect that to be a- Yeah... headwind to MACI adoption? Happy to do it. Actually, the day of our earnings call, my former employer, Eli Lilly, had their GLP-1 product approved, which was interesting and actually something I worked on when I was at Lilly and in their diabetes and obesity group. So we were developing their obesity strategy at the time. And so obviously, you know, across industries, this is having an impact. Yeah. There were a lot of discussion around what the potential impact is of these weight loss drugs. And as we said on our earnings call, we don't expect these products to have any impact on the MACI business, and that's because of what I alluded to earlier, which is, you know, the typical patient for MACI is a young, active, otherwise healthy patient. The average age in our clinical studies was 35 or something like that, and the bell curve is kind of teens to early fifties of patients who are being treated. The BMI for those patients in our summit pivotal study was about 26, and we, you know, we have the data on all our patients, obviously. And as I mentioned on the call, for patients we've treated from 2020 through the present, the average BMI for those patients was about 28. So both of those are below the BMI that's required to even be eligible for those weight loss drugs if you don't- Yeah... have other weight-related comorbidities. So our typical MACI patient isn't even eligible to be treated with these GLP-1 products. Yeah. Secondly, you know, most payers require patients, so MACI's covered under a medical policy, so you have to be a certain age, you know, a certain kind of defect, ability to do rehab, and one of the requirements typically is a BMI less than 35. So as we said, you know, to the extent more patients are using these products, it may actually bring more patients into potential treatment for MACI. And even from our addressable market standpoint, when we got down to those 60,000 patients, we actually excluded patients with high BMIs. So again, that could actually increase the addressable market for us over time. Okay, okay. That's great. So a lot of exciting things going on with MACI. Yes. Some nice growth opportunities there. Maybe switching gears to another exciting growth opportunity, NexoBrid in the burn care franchise. Can you talk about the commercial strategy for that product? Maybe remind us of the timeline for when you started commercializing in late September, and the sales force you've hired, the specialty distributors, as well as the initial targeted burn centers— Yeah, some of those details. Yep, happy to do it, and, you know, again, I'll take a step back for a minute. One of the sort of unique parts of our business is we have these sort of high-value products and concentrated call points, right? So for MACI, you know, I mentioned the reimbursement we get per implant, really to be able to generate— already $160+ million in revenue with, you know, 76 reps. The rep productivity on a revenue per rep basis is pretty darn high, right? Yeah. Similarly in burn care, you know, there's a pretty large addressable market for us. So there's about 500,000 burns in the U.S. each year. About 40,000 patients are hospitalized. At the top of the funnel, about three-quarters of those will have to have some kind of eschar removal, so about 30,000 patients a year. Average, you know, revenue per patient in our, you know, for NexoBrid is about $9,000. So it's about a $300 million market opportunity. And then as we get down to Epicel, which is used in these very large, typically 40% body surface area burns or greater, you know, the price point, you know, it's north of $4,000 per graft, so it's a pretty significant, you know, amount of revenue per patient, about a $300 million market opportunity. So over $500 million in market opportunity with two products combined and very concentrated call points. So there's only 140 accredited burn centers in the country. Obviously, we already have this infrastructure built with Epicel. We typically, for those patients, because they're kind of the catastrophic burn patients, focused on a subset of the 140 burn centers that would typically see Epicel patients. You know, just because a burn center is accredited, if they're not used to treating an 80%, 90% burn patient, they usually move them to a larger regional burn center. So we really focused on half of those burn centers with Epicel, and it's a pretty small commercial footprint, probably had mid- to high-teens number of reps, clinical support specialists, and management team. When we added NexoBrid, obviously we're going to pick up those other centers that we're not in. So we added, you know, 6 reps. They'll each call on 12-ish burn centers and just sort of overlaid them. And over time, they'll also, you know, sell Epicel. So right now, the Epicel reps sell Epicel and NexoBrid because, you know, Epicel is a pretty heavy training lift, you know, you need more time to train. So our NexoBrid reps will focus on NexoBrid to start, but be trained on Epicel over time. So that's kinda how we... You know, the synergies, both from a treatment pathway perspective of these products, but then from a commercial investment and utilization standpoint, is just outstanding. So that's kinda how we've approached sort of our commercial efforts for the two products. Okay. Okay, and could you touch on maybe the percent of annual burn patients that you currently, based on the burn centers you're already in, that you currently have access to? And then also, how many of those burn centers already have experience with NexoBrid? Yeah ... either from a trial or the BARDA contract? Yep, that's. So, you know, right now, to launch NexoBrid, we're gonna, as I said, we focus on the eschar, Epicel hospitals, and we're gonna continue to focus on those that routinely treat Epicel patients. The first launch wave is about 90 of the 140 burn centers that we'll focus on. We tier them to tier one, two, and three, depending on. You can get admissions data and claims data to see who's doing the high volume of burn care treatments as well. So, you know, that's roughly two-thirds of the burn centers. They have a higher proportion of the patients, likely, so maybe it's 75% or 80% of the burn patients that would be eligible are the ones that we're gonna, you know, treat first. As you noted, you know, the product was approved last December. Commercial product from our partner became available, sort of in late September, so we're really just in the first few weeks of launch. From our perspective, you know, what we're focused on when we look at our KPIs or key performance indicators, are, you know, at the burn centers that we're targeting, identifying a champion who is gonna bring the product through the P&T or the Pharmacy and Therapeutics committee, which they have to do to get the product into the hospital pharmacy. And then kinda getting those materials, which we put together, into the surgeon's hands to go have a P&T committee meeting at their institution. We're actually at or ahead of our goal for the year through October. Now, because product availability was delayed, you know, from our partner, you know, some of those things that we had ready to go for our initial launch timeline in June, or product availability in June rather than September, you know, those got deferred or delayed, but, you know, we've seen that activity ramp right back up. We've had a number of P&T Committee approvals since product became available several weeks ago. So, you know, this quarter, even when we thought we'd sort of have product availability in June, we said revenue will really come in the back half of the year because you have to get through all these individual hospital P&T Committee processes so that they can access the product. So we're kind of there now and sort of just shifted out to the right a little bit, saying, you know, we're getting all the foundational stuff in play. Obviously, patients have been treated, committee approvals, but each quarter you're going to continue to build on that. So really, the revenue is gonna really start showing up in 2024, and it should build throughout the year. Okay. Okay, and just to maybe put a finer point on that, still obviously very early innings with NexoBrid, like you mentioned, but how should we think about the cadence of penetrating that $300 million market in 2024, and then also long term? Yeah. So, you know, Nick, Nick touched on this a bit, but, you know, first off, again, I mean, it's a pretty meaningful kind of market opportunity of $300 million, as we think kind of mid to long term. You know, we think this certainly has the potential to change the standard of care in eschar removal and really provide a second high growth franchise for us, you know, kinda in addition to MACI. So, you know, as we think about this next year and in, into 2024, as Nick talked about, it's always a bit difficult to kind of predict how a launch, you know, curve, you know, initial uptake looks like. But, well, we did have a bit of that manufacturing delay, so things are pushed out a little bit, but I think we're really set up well now as we head into 2024. You know, Q4 could be that foundational quarter for us. So, you know, from a framework perspective, how we think about this is really from two dimensions, which is we think about the breadth of usage. As Nick talked about, there's about 140 burn centers. We're initially targeting 90. So as we get to the end of next year and beyond, you know, our expectation is, you know, a significant number of those have P&T Committee approvals, and ultimately a subset, hopefully, a meaningful subset of that, our expectation, will start using the product. And then it comes down to sort of the depth of penetration within their center. So there's about 30,000 patients annually are going to start using it. You know, how often will they use it, which will then drive kind of not just the ordering patterns from hospitals and additional hospitals, but reordering patterns and then using it more and more. So, you know, I think it will take a little bit of time, you know, as we get into the year to get going, but, you know, our expectation is that will continue to build, starting this quarter and then into next year and beyond. Okay, that's, that's really helpful. And then, as we think about gross margins, you talked about NexoBrid as being accretive to that, that consolidated gross margin target, or concurrent consolidated gross margins. Yeah. How should we think about that relative to your 70% target? How should we think about the incremental margins for NexoBrid, given the initial sales force investment, but kind of there's already a little bit of a commercial infrastructure in place? How should we think about that margin piece? Yeah, I mean, I think there's probably two dimensions as we think about margin. There's gross margin, which you're alluding to, and then, you know, we look at our adjusted EBITDA margin, kind of more of a bottom-line perspective. And I think, you know, again, I think just to echo what Nick said, I think it's very helpful as we think about the P&L, to have an infrastructure in place from a commercial and, and corporate perspective, but then a specific burn care infrastructure in place. So, you know, this is not a kind of huge investment, you know, it's a handful of reps. We certainly want to make sure, you know, there's some marketing expenses as we get going, but, you know, pretty concentrated market and call points. So it's not a significant investment from a, from an operating expense perspective. I think the other piece is, from a gross margin perspective, you know, based on our economics on NexoBrid, you know, they're pretty strong, so it actually fits right in with our kind of 70%+ gross margin perspective when we think about the royalty, which is one component on NexoBrid, and then we also pay a supply price, as well. So it actually fits in nicely with that 70%, and, you know, it should kind of be part of that increase as we go forward. And then lastly, just to echo, you know, what Nick was talking about, you know, our expectation that not just gross margin, but again, Adjusted EBITDA will continue to improve over the next few years and get to that 70% gross margin and 30%+ on Adjusted EBITDA. Okay, and I think we're almost out of time. Maybe if I can sneak in one last one. You've got about $150 million of cash and equivalents on the balance sheet, no debt, positive operating cash flow in the near term. How should we think about capital allocation and your appetite for M&A? Yeah, I'll start on that one. So, you know, again, I think really strong financial profile, so it's great to be in a position with $150 million of cash on investments right now. You know, as we think about capital allocation and sort of spend and investment, you know, first off, whether it's, you know, some of the questions you've had around, you know, investing for new launches, lifecycle management, that's more within our existing P&L and our operating expenses, so that's covered. We are using a portion of our capital as we are building out a new manufacturing facility, so that's underway, and then, you know, we'll see an increase, a meaningful increase in that in 2024 as anticipated. And that's really driven by kind of the need to make sure we have the capacity to hit our long-range plan targets. So that's been something that's kind of been planned and underway for a while. You know, and the last piece is, you know, just thinking about M&A, and, you know, certainly, that's something we'll continue to evaluate. You know, we're certainly active, thinking about different opportunities, you know, whether that's in sports medicine, burn care, could be another, cell therapy, type product. But, you know, I would say there, you know, we're well-positioned with a very innovative portfolio, and as we touched on, a very strong financial profile. So certainly, we'll continue to look at that as we think about mid and long-term growth, but I think we'll, we'll remain very disciplined there, I would say as well. Okay, great. I think we're out of time. Thank you all for being here. Thank you both for being here, and we really appreciate it. All right. Thanks, George. Thanks, George. Appreciate it.