Organogenesis Q2 2023 Earnings Call Transcript

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Provided by Quartr
August 9, 2023

There are 5 speakers on the call.

Operator

Welcome, ladies and gentlemen, to the Second Quarter of Fiscal Year 2023 Earnings Conference Call for Organogenesis Holdings, Inc. At this time, all participants have been placed in listen only mode. Please note that this conference call is being recorded and that recording will be available on the company's website for replay shortly. Before we begin, I would like to remind everyone that our remarks today may contain forward Statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including the risks and uncertainties described in the company's filings with the Securities and Exchange Commission, including Item 1A Risk Factors of the company's most recent annual report and its subsequently filed quarterly reports. You are cautioned not to place undue reliance upon any forward looking statements, which speak only as of the date made.

Operator

Although it may voluntarily do so from time to time, the company undertakes no commitment to update or revise the forward looking statements whether as a result of new information, future events or otherwise, except as required by applicable securities laws. This call will also include references to contain financial measures that are not calculated in accordance with Generally Accepted Accounting Principles or GAAP. We generally refer to those as non GAAP financial measures. Reconciliations of those non GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release in the Investor Relations portion of our website. I would now like to turn the call over to Mr.

Operator

Gary F. Gilhaney, Senior Organogenesis Holdings President and Chief Executive Officer. Sir, please go ahead.

Speaker 1

Thank you, operator, and welcome everyone to Organogenesis Holdings' 2nd quarter of fiscal year 2023 earnings conference call. I'm joined on the call today by Dave Francisco, our Chief Financial Officer. Let me start with a brief agenda of what we will cover during our prepared remarks. I'll begin with an overview of our 2nd quarter revenue results and an update on our key operating developments in recent months. Dave will then provide you with an in-depth review of our 2nd quarter financial results, Our balance sheet and financial condition at quarter end.

Speaker 1

I will then discuss our initial thoughts on the recent local coverage determinations or LCDs, The related uncertainty regarding our 2023 revenue and profitability outlook and the steps we have taken to address the reclassification of our products that will be impacted if these LCDs remain unchanged and go effective in September. Then we will open up the call for your questions. Beginning with the revenue for the Q2, we reported net revenue of $117,300,000 for the Q2, which came in above the high end of the range of the guidance that we provided on our Q1 earnings call, driven by sales of our Advanced Wound Care products at the high end of our expectations and the sales of our Surgical and Sports Medicine products exceeding the high end of our expectations in Q2. 2nd quarter total net revenue decreased 3% year over year, which was driven by a 3% decrease in the sales of our Advanced Wound Care products and a 5% decrease in sales of our Surgical and Sports Medicine products. Advanced Wound Care product sales were driven by better than expected demand for our non PuraPly products in the 2nd quarter with sales of our well established highly differentiated PuraPly brand being right in line with our expectations for the period.

Speaker 1

Importantly, our Advanced Wound Care product sales results exceeded our expectation in the hospital outpatient setting and were in line with our expectations in the physician office in Q2. As expected, we leveraged our diversified portfolio and leadership position in wound care centers and physician offices across the U. S. To increase the number of accounts served in both the hospital outpatient setting and the physician office setting. Additionally, we delivered mid single digit growth in units sold year over year in Q2, driven by double digit growth in the hospital outpatient setting.

Speaker 1

We are proud of the team's execution in Q2 and believe we are navigating the dynamic marketplace effectively. And as discussed, we expected a transitory impact on our growth in sales of Advanced Wound Care products in 2023, driven primarily by the impact of key products in the physician office setting working through the nationwide launches and recently published ASPs. And to date, we are pleased that these national launches have performed better than expected. This gives us further confidence that we have the right strategy to maximize Our competitive position as a leader in the Advanced Wound Care market and remain well positioned in the coming years. Turning to an update on our operational progress in recent months.

Speaker 1

We continue to focus on and invest in expanding manufacturing capacity overall for our product portfolio and pipeline and specifically for developing manufacturing capability for our dermograph and Transyte products that were previously manufactured in California. By way of reminder, we are working with development firms to assess building additional manufacturing space at our Massachusetts headquarters and in parallel are looking for alternatives for existing manufacturing space within the region. As previously communicated, we expect to have a definitive plan by the end of the Q3. Our ongoing Phase 3 clinical trial of RENEW for the The efficacy phase of the trial was completed in July and we continue to expect to achieve the last patient last visit milestone and complete the trial by the end of the year. We've also made progress with respect to the 2nd Phase 3 study for RENEW.

Speaker 1

We have received FDA approval for the protocol and to proceed with the 2nd Phase 3 trial. This will be a 4 74 subject trial With a design similar to the 1st Phase 3 trial, major start up activities are well underway with our current contract research organization and other study operations vendors and we remain on track for 1st patient enrollment by the end of the 3rd quarter. We received positive response from the FDA in a Type B meeting regarding questions we asked relating to the CMC aspects of the RENEW product, including confirmation of the testing approach and the manufacturing of RENEW. As previously discussed, We expect to have a subsequent discussion with FDA regarding the clinical data requirements for the BLA and we intend to propose The current Phase 3 trial combined with the published 200 patient RCT as valid scientific evidence and sufficient for a BLA approval. As a reminder, our plan is based on our belief that moving forward with a second trial as soon as we hear from the FDA will enable us to leverage the major operational advantages of continuing with the current active investigators.

Speaker 1

This for calendar year 2024 that was published in July. We are pleased that the Centers for Medicaid and Medicare Services has acknowledged the concerns raised by stakeholders in the town hall meetings in January of 2023 and is seeking additional input from stakeholders before making any changes to the payment policies for Skin Subsitute. As we have urged on many occasions, CMS should pay for all skin substitutes using the ASP methodology. Manufacturers are already required to provide ASP pricing information And as the Office of the Inspector General made clear in its March 2023 report, transitioning Allskin substitute to ASP pricing has the potential to substantially reduce Part B expenditures. We also believe that transitioning skin substitutes to ASP based payments would improve patient access, enable physicians to prescribe treatment options based on the individual needs of the patient and provide the best outcomes for patients and the healthcare system.

Speaker 1

With that, let me turn the call over to Dave.

Speaker 2

Thank you, Gary. I'll begin with a review of our Q2 financial results. Unless otherwise specified, all growth rates referenced during my prepared remarks are on a year over year basis. Net revenue for the 2nd quarter was dollars 17,300,000 down 3%. Our Advanced Wound Care net revenue for the Q2 was $110,100,000 down 3% And net revenue from Surgical and Sports Medicine products for the Q2 was $7,200,000 down 5%.

Speaker 2

Gross profit for The second quarter was $91,000,000 or approximately 77.6 percent of net revenue compared to 78% last year. The change in gross margin was driven primarily by lower sales volume compared to the prior year period. Operating expenses for the Q2 were $81,300,000 compared to $82,800,000 last year, a decrease of $1,600,000 or 2%. The decrease in operating expenses in the 2nd quarter was driven by a 2 point $3,000,000 or 3 percent decrease in selling, general and administrative expenses, offset partially by a $700,000 or 7% increase in research and development costs compared to the prior year period. 2nd quarter GAAP operating expenses included a modest reversal of non operating items consisting of employee severance and Benefits as well as other exit costs associated with certain restructuring activities.

Speaker 2

This compares to $600,000 of restructuring related charges in the prior year. Excluding restructuring items and non cash intangible amortization of $1,200,000 in both periods, non GAAP operating expenses for the 2nd quarter decreased $800,000 or 1% year over year, driven by strong cost management pursuant to our strategy to prioritize investments in areas that enhance our foundation for future growth, including higher clinical study related spending in support of our RENEW studies. Note, we have a detailed reconciliation of these non operating and non cash items in today's earnings press release. Operating income for the Q2 was $9,700,000 compared to $11,900,000 last year, a decrease of $2,200,000 Total other expenses net for the Q2 were $600,000 compared to $800,000 last year or a decrease of $200,000 Net income for the Q2 was $5,300,000 compared to $8,700,000 last year, a decrease of $3,400,000 Adjusted net income in the second quarter was $6,100,000 compared to $11,300,000 last year, a decrease of $5,200,000 And as a reminder, adjusted net income is defined as GAAP net income adjusted to exclude the effect of amortization, Restructuring charges, GPO settlement fees and resulting income taxes on these items. Adjusted EBITDA for the 2nd quarter was 15,400,000 or 13.1 percent of net revenue compared to $18,600,000 or 15.3 percent of net revenue last year.

Speaker 2

We have provided a full reconciliation of our adjusted EBITDA results in our earnings press release. Turning to the balance sheet. As of June 30, The company had $89,500,000 in cash and cash equivalents and restricted cash and $69,000,000 in debt obligations compared to $103,300,000 in cash, cash equivalents and restricted cash and $70,800,000 in debt obligations as of December 31, 2022. We also have up to $125,000,000 of available borrowings on the revolving credit facility as of June 30, 2023. With that, I'll turn the call back over to Gary for

Speaker 1

some closing remarks. Gary? Thanks, Dave. And before we open up the call to your questions, I want to share some initial thoughts on recent developments in the area of Medicare reimbursement and coverage. On August 3rd, local coverage determinations or LCDs were published by 3 Medicare administrative contractors.

Speaker 1

The LCDs address skin substitute grafts, cellular and or tissue based products or CTPs for the treatment of diabetic foot ulcers and venous leg ulcers in the Medicare population. Specifically, the LCDs require that a covered product be a skin substitute and be legally marketed. More than 130 products have been identified as not covered in these MAX jurisdictions, including 5 of Organogenesis commercially Our PMA approved products, Apligraf and Dermograft remain on the list of covered products. We believe that the 5 commercialized products that were listed as not covered were improperly excluded from the list of covered products We are engaging with all relevant parties to move these products to the covered status in advance of the effective date of these LCDs, which is September 17, 2023. The recently published local coverage determinations From Novitas First Coast Services and CGS to limit coverage for treatment of diabetic foot ulcers and venous leg ulcers To include only Apligraf and Dermigraf presents a significant amount of uncertainty regarding the revenue outlook for these products in these regions.

Speaker 1

Further uncertainty remains as it relates to potential impact on demand for our products when used for the treatment of DFUs and VLU wounds. As such, we are withdrawing the fiscal year 2023 guidance previously provided on May 10, 2023, we believe that the 5 products that were listed as not covered were improperly excluded and we are engaging with all relevant parties in advance of the effective date of these LCDs. We intend to provide further information at the appropriate time in the future. With that, I'll turn the call over to the operator to open up the call for questions.

Operator

Thank you, function is turned off to allow your signal to reach our equipment. We do ask that you limit yourself to one question and one follow-up. And our first question will come from Ryan Zimmerman of BTIG. Ryan, your line is open.

Speaker 3

Okay. Can you hear me okay?

Speaker 1

Yes, we can, Ryan.

Speaker 3

All right, great. So Gary, let's start with the LCDs. I think you're going to have to give investors more color about What's going on here given the withdrawing guidance? And what I first want to know is Why do you believe they were improperly excluded? What can you share with everyone to suggest that they were improperly excluded?

Speaker 3

And then the second question is part of this and there's going to be a few here, but you're withdrawing the guidance. I recognize there's uncertainty, but you need to help people understand what is the payer mix Of your revenue base, how much exposure do you have to Medicare? How much exposure do you have to 3 max? And if we can start to break that down, I I think we can at least kind of excise the full risk from this change.

Speaker 1

Sure. Let me start, Ryan and then Dave can jump in. So the reason why we believe that we were improperly There's 2 requirements primarily in the draft guidance as well as in the final guidance. One is that your products are a skin and we clearly I have all of the evidence and have provided all of the information that's regarding skin substitutes. So we clearly Our products are skin substitutes, and we believe we meet the definition Easily as it relates to a skin substitute.

Speaker 1

I mean that is what our products are. That's how they perform. They provide a scaffold for healing. They are not removed. They stimulate the wound for healing through cell migration and growth.

Speaker 1

So that hurdle, Which was not identified necessarily in the pre or the draft ruling at all as a requirement. It was not. It's one that kind of showed up in the final draft, which is a procedural problem, but we'll talk a little bit about the procedural problems later. 2nd is that your products are legally marketed that you have FD you meet the FDA requirements to be on the market. And clearly all of our products meet the FDA requirements to be legally marketed.

Speaker 1

So we are a skin substitute. That's a hurdle that we feel very strongly we can overcome and we are legally marketed. Obviously, all of our products are legally marketed. So This is an error. It's clearly an error in our opinion and that we will take any and all action to move these products onto the covered list.

Speaker 1

We will, number 1, engage directly with the MAX to inform them of the errors that we believe they've made. We're also preparing a legal memo that we'll be sending to CMS explaining the errors and all of the process issues and procedural violations that we believed optimistic that our efforts will resolve these coverage issues based on the strength of our arguments that our products clearly meet the characteristics of a skin substitute And that we are legally on the market. Dave, you want to comment about?

Speaker 2

Yes, sure, Ryan. So obviously, it was a really difficult decision for us To suspend the guidance here, particularly with as you've seen a strong H1, it was good in Q1, good in Q2 and we had good momentum in the business and Frankly, before last Thursday, expected to reaffirm our full year guidance today. So unfortunately, what's happened is, As Gary mentioned, the final LCD has really introduced a high level of uncertainty around we're confident in our ability to address this, but the timing of that is unclear. So that impact to revenue and profitability It's unclear at this point. So that's why we took out guidance.

Speaker 2

As far as kind of framing it up, We're not going to disclose how much revenue we do in those MAX, but there is a subset of that revenue that's particularly related to DFUs and VLUs. And our estimate in that arena is about for the first half of twenty twenty three was about $35,000,000 to 40,000,000

Speaker 1

So I hope that helps.

Speaker 3

That was just to be clear that $35,000,000 to $40,000,000 is what you did In DSU and VLU of the 5 products that are impacted across your global Revenue, not constrained to those MAX. I just I want to be crystal clear here, Dave, so that people understand and they can kind of frame this up.

Speaker 2

So those are the products that are impacted in those MAX related to DFUs and BLUs.

Speaker 3

Okay. So that's the first half. So conceivably $70,000,000 to $80,000,000 is coming out over the next four quarters. In a worst case scenario environment?

Speaker 2

That's correct. In a worst case scenario, although as Gary pointed out, We have

Speaker 1

a very strong argument against that. Yes. I mean There's also I mean if you think about it, Ryan, if I could just So Apligraf is obviously still approved. So Apligraf in these markets, if you think about The other restrictions of the LCD, which is for application. So Apligraf As a result of this, assuming the 4 applications stand in my opinion has significantly more value than it ever has in these LCDs.

Speaker 1

If you only have 4 applications to solve this wound, Apligraf is the best product in wound care. The only product with PMA approval for DFU, VLU. And if you look at the 2 pivotal studies that we have, the average Number of units per patient was 3.6. If you look at, we have a 14,000 patient Retrospective study for all wounds, the average is 2.5. So if a clinician is looking at a DFU and VLU and has To solve it with 4, I would argue that Apligraf should be the first product they consider in all of these MAX.

Speaker 1

The other thing that you need to consider as well is PuraPly is also used above the knee. And In these MAX, we still have Furoply sales above the knee as well as VA's Critical Access Hospital. So, the number Dave gave you clearly is the correct number. But going forward, there are other mitigating factors We would be pushing pretty hard if in worst case scenario.

Speaker 3

Okay. Yes.

Speaker 2

I'm sorry, just to be clear, because I know you really wanted some clarity on that, but the 35 to 40, you've multiplied that by 2, that's for 24 if it's the worst case scenario and this doesn't get resolved. Obviously, it's only 4 months in the first half is the way we talked about that.

Speaker 3

Right. That's a good point. And you'll have some Obviously, some you'll lap it by September of next year. But I'd love to hear you, that's helpful. A couple of follow ups And I'm going to keep rolling just because I think people want to understand this clearly.

Speaker 3

What is your ability or confidence Gary to Swap out some of those sales of Affinity and Purify to Apligraf And dermograph, I mean given that you did suspend marketing or manufacturing excuse me of dermograph and like how much If we're again trying to size up risk, how much can you get back through substitutions of your existing products If these dynamics hold.

Speaker 1

So we're still working through that. I'll let Dave comment if he has any more color. But obviously shifting our share of voice, shifting our focus to Apligraf and PuraPly above the knee would be a major area Of reallocation of time and resources. So we're going through that process now, but I can't give you an exact number and Dave, I don't know if you have any more color, but we clearly expect both above the knee sales of PuraPly and Apligraf sales to go up.

Speaker 2

Yes. I mean, as Gary mentioned, I mean, we just found this out on Thursday morning, so we're still working through some of this stuff. But clearly, as Gary mentioned, there's other MAX that are covering our products Above the knee in these existing MAX that we're talking about. And then to Gary's point about Apligraf being the first choice, we really have a fair amount capacity opportunity here within our existing facilities, probably north of 30% to increase that capacity without any With minimal CapEx requirements. So to the extent that that demand starts to flow in from a swap out perspective, we certainly have the opportunity To capture that demand.

Speaker 2

I think also as you mentioned just redeploying resources in different places as we've talked about before that share of voice is

Speaker 3

Okay. Last one for me, I'll hop back in These proposals came out in late 2022, if I'm not mistaken. The question is kind of to what extent did you have an idea that this was potentially coming? What drove the decision for them to publish now? Can you kind of just give us some context around kind of how this came about?

Speaker 3

It seems as if maybe it caught We're caught off guard.

Speaker 1

So you're correct. The draft ruling came out over a year ago and then they amended it. So we responded to the draft proposal. So in that draft proposal, They were looking for FDA compliance, that you are legally marketed, that you have FDA Approval or clearance for the products that you have, PuraPly, our 510 product, we obviously have a 510. It's been cleared.

Speaker 1

We provided that information. That product historically was called Fortoderm and we thought there was some confusion around Watch 510 ks. So we provided all of that information and felt very comfortable with PuraPly. And again, regarding the other products, We provided the FDA regulations and guidance from the website, which were the requirements for the 3 60 ones, And we met all of those requirements. So we provided the information PuraPly looked like a pure error to us and I think it perhaps may have been, but we felt very comfortable that what we provided as well as the comments that we submitted In May of 2022 and in November and the town hall meetings at every one of the MAX that we felt Pretty comfortable that there really wasn't going to be an issue for us.

Speaker 1

And now we find out that well, not being we're not a skin substitute in their mind and they Somehow misinterpreted the data and brought Skin substitute requirements into the discussion, which I believe for the first time. Okay.

Speaker 3

I'm going to hop back in queue. Thank you.

Speaker 1

Sure, Ryan. You're welcome.

Operator

And one moment for our next question. Our next question will be coming from Drew Ranieri of Morgan Stanley. Your line is open.

Speaker 4

Hey, Gary, David, thanks for taking the questions. Maybe just a couple more. Hey, Maybe just a couple more following on Ryan's line of questioning there. But you kind of touched on the revenue implications For the or sizing the risk that you see, can you maybe hit on the profitability impact here? I know it's There are a lot of moving pieces here, but could you just kind of help us think about that side of the equation as well?

Speaker 2

Yes, absolutely. I mean, it's one of the reasons why, again, it's this lack of clarity on the revenue and also the profit. So From a gross margin standpoint, that will be predicated on the amount of volume and the mix shift that will happen within the business. And again, we kind of identified this again last Thursday morning, so some challenges from that standpoint. I'd say on the cost side though, we continue as always, we'll be prudent in any investments that we make And particularly with the current revenue headwinds.

Speaker 2

So we're looking at all those components there. And obviously, as we've done in the past, we'll do Everything in our power to preserve profit as we go forward.

Speaker 4

Got it. And With the September 17 deadline under kind of like the worst case scenario and it kind of fully takes a stack, What options do you have looking ahead to maybe change the rule over time or like how permanent could this be? Would it just be a year and you can revisit or just any kind of timeframe around that?

Speaker 1

I'll start. So there really is no specific timeframe. You can request Through CMS, which we will, for the LCD to be rescinded, you could also request Through CMS to have perhaps the articles changed. There's been precedent for that as well to my understanding. You also can address it directly with the LCDs.

Speaker 1

And then once issued, once it becomes effective, you can ask for reconsideration after that 45 day period, to reconsider the entire LCD. But at any time, you can request A change in the LCD article or go to CMS if you believe There was actually an issue in how it was implemented. There are no specific timelines on how they have when they have to respond though, Drew. So that's always a bit of a challenge, but you do have the opportunity to go both to CMS and to the LCDs

Speaker 4

Maybe just to shift gears a bit. And Gary, you touched on PFS coming out with the proposal, And it doesn't seem like there really is going to be a meaningful change this year, obviously. But Heading into this LCD event, can you maybe just talk about like what expectations you were seeing in the business now that The PFS rule was a little bit more benign than many kind of expected. I guess I'm just trying to get a sense of like you have this event On the LCD side, but just help us maybe better understand too what you're seeing on the underlying business and maybe what your expectations were around there? Thanks for taking the questions.

Speaker 1

Sure. And I'll let Dave jump in. But clearly, as Dave mentioned, the trends in the business were strong. 1st quarter was strong. 2nd quarter was strong.

Speaker 1

We beat the high end of our guidance. We were ready to reconfirm guidance. And then obviously we had this issue that brings some doubt into the last quarter. So the business has been strong. Account additions have been strong.

Speaker 1

Our national launches of our products that have become published, which is part of our strategy, have exceeded our expectations. We don't see as much in the way of staffing issues. We're starting to see some improvement in staffing and census Yes, in both the office as well as the outpatient setting. So good trends for the business, for sure. Yes, I mean, I think you

Speaker 2

hit them all, Gary, but I absolutely agree. I think the first half was really strong for us. It was definitely in excess of our expectations on the top line. Again to Gary's point, good account growth as well, which is the backbone of the demand profile for the business and good flow through on the performance as well. So we've been very pleased as Gary mentioned too.

Speaker 2

The national launches that we were concerned about through that transition period has A lot stronger than we had anticipated. So we had a lot of momentum coming out of Q2. And as Gary mentioned, I think I mentioned it earlier, we were very bullish Reaffirming the guidance as we go forward and this obviously event occurred on Thursday.

Speaker 4

I lied. I have one more question or one more topic. Apologies. Thank you for that. But maybe just on the surgical business, surgical and sports med, With a competitor kind of being in recall right now, can you maybe talk about some of the trends you are seeing in that business and maybe what your expectations are To maybe capture incremental share and just on renew, sorry to pile on here, but just to make sure I heard you correctly, The last visit milestone you're still expecting year end 2023 for the trial.

Speaker 4

Can you remind us what you're thinking in terms of That or readout for that or any publication strategy around RENEW for the first Phase 3? Thanks for taking the questions.

Speaker 2

Yes. So Drew, I'll start on the surgical. It did exceed our expectations in the quarter, so good performance there. I think Obviously, with some opportunity there with that recall, we're still in a kind of a rebuild mode as we lost some of the products in bone fusion Back in the midpoint of 2021. And so therefore, we really don't have the significant infrastructure yet to take advantage of A change in the marketplace like that.

Speaker 2

So we continue to look for opportunities. I think it opens doors, but didn't get a lot of traction in Q2, but again better than what our expectations

Speaker 1

Yes, regarding the RENEW trial, so yes, last patient, last visit at the end of the year, We're rolling into the second trial. So we don't have anything this year as it relates to readout or an efficacy readout. There is a designed in the current trial and efficacy readout, I believe in the first half of next year. And then once that information is available, we'll disclose anything that's well in any way unblind the study, But that could be helpful to investors.

Speaker 4

Got it. Thank you.

Speaker 2

Sure. Thanks, Drew.

Operator

One moment for our next question. And our next question is a follow-up from Ryan Zimmerman, BTIG. Your line is open, Ryan.

Speaker 3

I'm back. I just didn't get enough. So I just want to follow-up on the prior questions. And if I'm doing the math right, Dave, it's an impact of 4 months. And if you're running at $35,000,000 to $40,000,000 for the first half of the year, Simple math would suggest it's something like a $25,000,000 impact in the last 4 months of the year.

Speaker 3

1, is that the right way to think about what this headwind could be?

Speaker 2

It is, Ryan. The only thing I'd mention is Obviously, there's a little bit of seasonality between the first half and the second half. So, it might be a little bit north of that. But outside of that, that's the way to think about it.

Speaker 1

I mean the other thing just from a market perspective, there's a lot of misinformation and a lot of noise in the market already Regarding the change and that's creating some confusion. And whenever there's confusion, you've heard us talk about this often, whenever there's a reimbursement Change or even perhaps a threat of a change, the market reacts and things start to slow down a little bit. So There's always that one component that we try to assess when we come up with these numbers, but that's just To be fair, that's also an issue

Speaker 3

that we have And then the second question is just the products that are excluded are Exclusively for DFU and BELU. And so looking at these proposals excuse me, these finalized LCDs, I mean, you're still selling PuraPly in those given MAX for anything above the knee. And just kind of what's the Is there any exposure in your mind for those cases? Or is that clearly not in the scope of these

Speaker 1

It's our understanding and I think it's most folks understanding that it's only DFU and DLU. There's been no Nothing in these LCDs either in draft or in final form that have indicated other than that in my opinion.

Speaker 3

Okay. Very helpful. Thank you.

Speaker 2

Sure.

Speaker 1

Yes. So I mean in closing, this in our opinion was clearly an era and we are aggressively Going after every avenue to get this rectified and we will update you when appropriate if anything changes. So Thank you very much.

Operator

Thank you. Again, we're showing no remaining questions. This does conclude today's conference. Thank you for your participation.

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Earnings Conference Call
Organogenesis Q2 2023
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