Sientra [SIEN] Conference call transcript for 2022 q1
2022-05-12 22:45:11
Fiscal: 2022 q1
Operator: Good day and welcome to this Sientra, Inc. First Quarter 2022 Earnings Conference Call. All participants will be in listen only mode. . After today's presentation, there will be an opportunity to ask questions. . Please note, this event is being recorded. I would now like to turn the conference over to Oliver Bennett. Please go ahead.
Oliver Bennett: Thanks, operator. Good afternoon, and welcome to the Sientra’s first quarter 2022 earnings conference call. I would like to remind everyone that in our remarks today, we will include statements that are considered forward-looking statements within the meaning of United States security laws. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current assumptions and expectations of future events and trends, which may affect the company's business strategy, operations or financial performance. Actual results may differ materially from those expressed in or implied by the forward-looking statements. The company undertakes no obligation to update or review any estimates, projections or forward-looking statements. A detailed discussion of the risks and uncertainties that the company faces is contained in its previously filed annual report on Form 10-K and its quarterly report on Form 10-Q for the first quarter that ended March 31, 2022 to be filed with the SEC and available on the company's website and at sec.gov. I would also like to note that the entry uses its Investor Relations website to publish important information about the company, including information that may be deemed material to Investors. Financial and other information about Sientra is routinely posted and it's accessible on the company's Investor Relations website at www.sientra.com. Today, on our call, we have Ron Menezes, Sientra’s President and Chief Executive Officer; Andy Schmidt, Sientra’s Chief Financial Officer. I will now turn the call over to Ron. Ron?
Ron Menezes : Thanks, Oliver. Hello, everyone. Our seventh consecutive quarter of growth was fueled by record high Reconstruction performance. This result was a validation of our strategy to focus on the recall market. This quarter has set the foundation for ‘22 with the reemergence of this highly valuable market, which will support our long-term growth. We're now seeing hospitals go back to pre-pandemic farms will continue to add accounts and grow market share in this important segment. We had record Q1 revenue of $21.4 million of 70% increase over same quarter last year. We're also thrilled to over 50% year over year increase in the Reconstruction channel. The Augmentation of cosmetic market, we hit an all-time high market share of 13%. The company also had 60% gross margins as a result of increased Recon sales and improved operational efficiencies. As we'll look into the rest of ‘22 and beyond, we're focusing on three key areas. First, accelerate market share growth within Reconstruction and Augmentation. Second, continue to invest in commercial and R&D to support current and future growth. And lastly, to transform Sientra into innovative aesthetics company, offering an enhanced portfolio for plastic surgeons. Our existing accounts continue to perform extremely well and drove more than 90% of our revenue in Q1 ‘22. New accounts also served as a leading indicator to a long-term growth profile and we had over 200 new accounts in the first quarter of ‘22. As a reminder for tissue expanders are now in every major GPO in the country, in order to bring a new record account, it typically takes four to six months before it receives significant sales volumes. We expect those new accounts to be accretive to Sientra’s top line growth this year and beyond. This continues growth and accounts reinforces the fact the surgeons are switching to Sientra. Driven by our value proposition, the safety profile of our products, which is backed by our 10 year clinical data, which is the best in class warranty and be the partner for choice for plastic surgeons. The benefits of our portfolio have led to the acceleration on both Recon and Augmentation share games, which offers unique and innovative technologies and tissue expanders and breast implants. Now turning to the Augmentation market. The pandemic caused quite a boom in the plastic surgery market. And now we're seeing Augmentation market returned to normal seasonality. Last year to purposely set ourselves and our surgeons up by resetting our commercial strategy, and this working will continue to grow our volume. And our share of the market hit an all-time high of 13% this quarter compared to same quarter last year, where we are about 8.5%. While also double our consumer brand awareness over the past few years, growing at the highest rate in the category, and putting us in the number two position almost all brands. We’re strategically investing to educate consumers about our safety profile, which is driving brand requests to plastic surgeons for sanitary implants. Additionally, are providing more value to our Surgeon partners, but 20 of them not only about our product advantages and techniques, but on practice management, and growing their business in the highest revenue producing segments plastic surgery, breast Augmentation. We're also seeing growing interest in fat grafting the plastic surgery market, which validates our decision to acquire the novel fat grafting technology at the end of last year. Just a couple of weeks ago, but aesthetics meeting San Diego. The growing use of fat grafting in plastic surgery was a topic highly discussed a highlighted many of the sessions, the benefits of fat grafting and both aesthetic and recall breast surgery has also been a topic of recent publications. We're confident for fat grafting technology to offer patients and surgeons unique benefits to obtain safe, natural, predictable and reliable outcomes. We're very excited about this year as we build the foundation for the upcoming years. With that, I'll turn the call over to Andy.
Andy Schmidt: Thanks, Ron. Considering our Q1 ‘22 Financial Results. We recorded record Q1 plastic surgery results, which brings our running total to seven consecutive quarters of record revenue performance. Sientra posted revenues of $21.4 million as compared to $18.3 in Q1 ‘21, an increase of 17%. Gross margin for Q1 ‘22 with 60% which is a very strong performance as compared to 55.4% for the same period last year, and 54.9% for the total year 2021. The key driver for gross margins is Product and ChannelMAX. Our Q1 ‘22 results so strong performance from a Reconstruction space, which we expect to continue to perform strongly in 2022, as supported by hospital wins in 2021, and new hospital wins in 2022. Consistent through 2021 and into 2022, we experienced price stability across our entire product line and improved product cost performance. We have moved past our transition expenses in Q1 ‘22 related to our distribution center move and expect to see the results of the improved cost dynamics throughout the year. Switching to the operating expense. Total GAAP operating expense for Q1 ‘22 was $28.9 million, which compares to $21.9 million in Q1 ‘21. That said our Op expense compares to the Q4 ‘21 period of $26.1 million, the increase being related to both non-recurring G&A items, and as expected increased expenses associated with an increased sales force to optimize 2022 customer acquisition opportunities. Total GAAP loss from continuing operations for Q1 ‘22 was $18 million as compared to a $56.6 million loss for the previous year period. Q1 ‘21 included a non-cash charge of $42.7 million associated with the change in value of our previously defined derivative instruments. During 2021, we corrected for the derivative instrument accounting. Considering the Q1 ‘21 results without the derivative counting, a comparative is a loss from continuing operations in Q1 ‘22 of $18 million as compared to $13.9 million attributed primarily to the investment in sales and marketing into 2022 periods. Adjusted EBITDA for Q1 ‘22 was a $11.8 million loss as compared to a $7.3 million loss for Q1 ‘21. Again, attributed to both our investment in our sales initiatives and non-recurring G&A charges in the current period. Switching to key balance sheet items, we ended the March 31, 2022 period with a cash balance of $38.9 million. This compares to a balance of $51.8 million on December 31, 2021. Year to date, cash used in operations was $17.9 million. However, $6.5 million of that amount was attributed to an increase in accounts receivable due to increase in sales in our transition and ERP systems in Q3 of 21, which caused the delay in delivery customer statements. We expect recapture much of that increase in accounts receivable in 2022. We also increased inventories by approximately $1.3 million to support significant Recon hospital wins which require consignment inventory. This is an as expected increase in compares favorably to the $13.8 million increase in inventory in 2021 to address increase in sales in support our business recovery from the 2020 COVID shutdowns. Total debt on March 31, 2022, was approximately $84 million and total outstanding shares were approximately $62 million at period end. Turning the guidance for 2022. We iterating our past communication, we expect plastic surgery revenue in the range of $93 million to $97 million, reflecting growth of 15% to 20% compared to sales $80.7 million in 2021. In regard to operating expense guidance, we are guiding 2022 GAAP operating expense to be $105 million to $109 million, representing an increase of 15% to 20%, compared to GAAP operating expense of $90.7 million in 2021. Non-GAAP 2022 operating expense is expected to be $90 million to $94 million, representing an increase of 18% to 23%. compared to non-GAAP operating expense of $76.3 million in 2021. At this point, I will turn the call back to Ron.
Ron Menezes : Thanks, Andy. With strong momentum behind us we have many exciting catalysts on horizon. In ‘22, we expect to continue to expand our market share a number of accounts in both recall and Augmentation, while also focus on driving towards profitability in 2023. But further growing our top line by investing in areas that will drive future growth. We'll plan to fuel our future by transforming Sientra into a full aesthetics company, leveraging the full potential of our existing portfolio and the new fat grafting platform. We're going ahead. I'm very confident that we'll be on track to double our revenue within the next three years. And with that, I'll open up for Q&A.
Operator: We will now begin the question-and-answer session. . The first question is from Margaret Kaczor of William Blair. Please go ahead.
Margaret Kaczor: Hey, good afternoon, guys. Thanks for taking the question. Maybe I just wanted to start up a bit with you know what's included in your guidance, if you can give us a sense of Recon versus Aug and whether that's shifted at all given the momentum that you are seeing in the Recon business, or even kind of underlying market trends and all…
Ron Menezes: Hi, Margaret, welcome back.
Margaret Kaczor: Thank you…
Ron Menezes: Margaret, we are all our model was a 55/45. You know, that's what we planned for the year. This quarter, it came in closer, almost a 50/50 between the two of them. But we did model 55. Aug and 45 Recon for the rest of the year.
Andy Schmidt: Sure, just what Ron said, you know, we're taking a look at 2020 to understand the return to seasonality. And we saw that their Q1 in terms of Aug and Q2 is we're launching through. We're seeing strong performance from both sectors. So it'll be a bit of a wrestling match between the two. But Recon is very strong, you see it in their gross margins. It's very exciting to see that space take off, but Aug we expect to perform equally as well.
Margaret Kaczor: Okay, so if I kind of keep going down that track, right, so can you give us a good sense of underlying market growth within Reconstruction? And then similar, you know, within Aug to the best of your abilities, I know it's tough in the marketplace, and then just kind of the pace of market share gains as we go throughout this year. You know, 500 basis points is spectacular. But can you keep going at that level and what might kind of stop you or maybe even heavy accelerate from there. Thanks.
Andy Schmidt: So Recon, Margaret. Recon, we don't have the data. Q1 is going to release that data next week. And I'll have that and one of the upcoming investor meetings, we will have a shared data, which I'm very, very optimistic or share at that time. And that includes all of us the market for first quarter. For Augmentation, as I've been saying the last six months, we did expect and we saw seasonality first quarter back to 2019 levels. In as you notice, we don't really rely on the market growth to advance our performance, we saw our share growth dramatically increase to 13%, from 11%, at the end of the year. So it's nice to have a market behind us. We're not waiting for the market. But you'll see our market share the last two years double. So that's we're focusing on what we can we do from our side?
Margaret Kaczor: Okay, great. Thank you, guys.
Operator: The next question is from Alex Nowak of Craig-Hallum. Please go ahead.
Jason Kreyer: Good afternoon, guys. This is Jason for Alex. Thanks for the questions. I guess starting, you know, you said you saw the seasonality kind of return in 2019 levels. Like going forward with likely to decrease discretionary budgets, you know, maybe a recession on the horizon. How do you see demand holding up for you? And I guess what have you seen historically, that kind of guides this opinion?
Ron Menezes: Good morning, Jason. Let's look at Aug. First, it was separate Aug and Reconstruction. Aug, like I said, it's back to seasonality, which means that Q1 and Q3 are the lowest quarters, Q2 and Q4 are the highest quarters. So we expect you to come back and back to a strong quarter, as individuals get ready for the summer. And in a day to expect the Q3 to go back down. Our doctors are very, very busy still. I was in San Diego, just two weeks ago at aesthetics, American Aesthetics Conference. And they're telling me there are two three months booked ahead. So I don't know if they're planning recession yet. But they are being very busy. Reconstruction, as we stated on their opening remarks. It's the market is back. Hospitals are busy, and individuals have delayed their Reconstruction are going in and getting taken care of. And they're very, very, very booked as well in that regard for Reconstruction. So I see a very strong recall market throughout this year. And I see Aug right back to seasonality.
Jason Kreyer: That's helpful. Thanks. And I guess just concerning your Salesforce, you know, what was the sales team reception to being more Recon focused, you know, any concern amongst the Aug reps? And you know, what was the excitement level of coming away from the sales meeting at the conference?
Andy Schmidt: Yes, Jason, this is a strategy that we implemented in beginning of 2021 to really pivot this company and focus on Reconstruction. So we been doing that since beginning of last year, adding new accounts, training representatives. And the great thing is, as we add new reps, and we did add 11 new representatives to begin to ‘22. All of them have Reconstruction background. Some of them docs -- the majority of them have come from med device companies with extensive OLE RX experience. So it is part of their job. The individual that calls in the hospital also calls in the office for the Augmentation side. We did expand as well. Our Reconstruction managers who have seven before had for Reconstruction managers. So we're very excited about the support we'd have right now in our marketing team as well as more resources and more programs to drive that educational component to our hospital surgeons. Last year at the Sientra Summit is a program that we do to help our surgeons that are focused on Reconstruction, learn more learn from each other. We had about 35 surgeons, we expect over 100 surgeons attendance programs this year, and is that we can program they take time for their own time to attend this program. So you Reconstruction is part of us. Reconstruction is what Sandra stands for her. We are very focused Augmentation as well. And we're very excited about performance, not just in this quarter Augmentation, but for the past six quarters in Augmentation.
Jason Kreyer: That's good to hear. Thanks. And then just lastly, for me, you know, Andy, can you speak to pass the shore up the balance sheet at all, you know, you laid out a path to profitability. But will you need to raise additional capital to bridge you there? I guess what are you kind of thinking about from the balance sheet perspective?
Andy Schmidt: Sure. So, you know, when we look at our legacy debt facilities and capital strategies, they've been effective over the last several years, but keep in mind they were put in place in 2018. So they're designed basically to take the company from 2018 to essentially 2023 to 2025. When we look at those current strategies, we have ample capital for the year 2022. But we're looking at different ways, different strategies to increase access to capital to provide a view of 2025 to 2027. It's basically time for a refresher that what was in place in 2018. And we have a lot of options. So we're working through that in real time right now. And we will report back obviously, to you all into the field once we come to a landing spot.
Jason Kreyer: Got it. Thanks for the questions, guys.
Operator: The next question is from Jon Block of Stifel. Please go ahead.
Jon Block: Thanks, guys. Good afternoon. Hope all is well. And he made me just a couple on the P&L to begin with the 60% GM was really solid and in a step function above where you had been uneasy, a lot of it's mixed, but maybe just talk to us. I mean, do you think we're now working off this level of E sound like you, for a lot of reasons, expect Recon to remain strong? And that's the higher gross margin component? So, you know, do we think about a six handle for GMs throughout 2022? And then on the non-GAAP OpEx? I think I got the numbers, right, I think you're calling for 90 million to 94 million in the P&L and the press release, but you did 25, just over 25 in one queue, and you're still being quite active on the R&D front. So you know, how do we step down off that run rate in terms of where we were in one queue, and that just got a quick follow up?
Andy Schmidt: Sure. So let's start with growth, gross margins. 60% is part product mix. But a big part of this is the work we've done in our distribution center, is we said, you know, during the launch of that big move and third quarter of 2021, that we had work to do to find the efficiencies that we're looking for. Paths communication was we needed Q1 and Q2 of 2022 to complete that work, we're ahead of schedule. We completed that work here and early 2022, we're seeing the results in Q1. Those results will stay with us and build going forward. So that 60%, that current product mix is solid. It can go up from there based on again, Recon performance and additional efficiencies. That won't drop much from there if we have extremely heavy Aug quarter. So that additional tick up to four to five points is with us going forward. So again, that was completing the work that we started in 2021. When we look at 2022. In terms Op expense, we have a similar dynamic, we still have work to complete in terms of our ERP change in other really significant investments, we made an infrastructure in 2021. You're seeing some of that effect in Q1 2022 Op expense, approximately two and a half million of what you saw an OP expense in Q1 is non-recurring. When they look at guidance, specifically, as you said, if you've annualized our Q1, it doesn't fit our guidance. There's a reason for that, we expect Q2 to also have some non-recurring costs. But of the 14 million to 18 million and non-GAAP increase in Op expense, approximately $8.5 million to $9 million of that amount is non-recurring. That's where we start looking at the second half of 2022. In terms of basically measuring out or Op expense are basically making that look more, more reasonable. And that's basically going to be the foundation for 2023, when we talk in terms of very little increase in office expense in 2023 in our long-term modeling has much to do with their early 2022. Taking care of some business taking care of some of the restructuring work that we did in 2021. That will be behind us and we'll see it normalized. That's the right word. And by the way, we now include a non-GAAP to GAAP operating expense reconciliation. In our press releases, we'll do so every quarter. So the street can understand how we basically get to non GAAP operating expense.
Jon Block: Got it, very, very helpful. And then, you know, Ron, for you maybe just more higher level or strategic. I mean, I guess anything you want, is there anything to talk about in terms of AlloX2 Pro in any dialogue with the FDA, but to zoom out? You know, you clearly got a lot of traction and Recon. I think there's been a lot of air time given to a future competitor. But if and when they get there would be specific to all, so if you just give us your thoughts on, your Recon portfolio versus others. It should get stronger with pro and do you think anyone's really, they're even chasing you in that part of the market. Thanks, guys.
Andy Schmidt: Thanks, Jon. We are focused on becoming the leader in Reconstruction. And you mentioned one of the products Pro. We're in discussions with FDA and It was submitted that I've typed in came December. So we expect that to continue to move forward as we talk about the project. And then on the other part two is our fat grafting technology, or the majority of surgeons use some kind of fat grafting and Reconstruction. So we're going to have our representative walking in with a advanced the Ultra, so the only dual port tissue expand in the marketplace that reduces reoperation reduces aroma and reduces infections, and really makes it a critical advantage for us, then we have breast implants, that has advantages with discussing the past. And obviously, you have a fat grafting. So this is all going to be happening within the next 12 months as we launch a fat grafting. So we have this product that we discussed in the pipeline is strong, we are looking at different opportunities as well focus on Reconstruction. We'll be also very clear on Augmentations or critical segments. For us, it's done very, very well for us in the past, we gain market share quite a bit this past three months. We see Augmentation, as well as a path for sustaining this company. But the critical part is because we have such an advantage into Reconstruction with the clinical data that we have. And I share an example, we won this, well, no military base contract was so proud of that. And usually, as you've heard in the past, it takes four to six months to get a contract to really start seeing revenue. It just takes a while. But because the surgeons in that base were so impressed by our clinical data by AlloX2, they actually quickly start using AlloX2 quickly start using a breast implants. They felt that for the patient, it made more sense to quickly go to AlloX2 versus worried about using the inventory for the previous manufacturer. So that's the kind of data that makes it sustainable, long-term growth and long-term focus on being the number one company in in the Reconstruction area.
Jon Block: Perfect. Thanks, Rob.
Operator: The next question is from Chris Cooley of Stephens, please go ahead.
Chris Cooley: Good afternoon, and thanks for taking the questions. Just to for me, if I may, maybe one I know we just had the aesthetic meeting. But just when we think about the pipeline, as John alluded to. Just kind of curious if you could give us some color there about the contribution a quarter from the new six-tab version of Dermaspan and more broadly expanders as a whole. And similarly, if in Canada, we're still expecting approval here in the second quarter, as well just wanted to touch base on those two fronts, and then have a quick follow up.
Ron Menezes: Hey, Chris, we just launched the Dermaspan, six tab. And we saw a very high demand in the last week in March, we basically did a really nice job selling most of them out and they obviously are taking care of the needs and demand in discord as well. We also continue to see increased demand and interest for AlloX2, we have several well-known networks, hospital networks in the US that are continuing to talk to us about the clinical data and find a ways to add AlloX2, and Dermaspan six tab. So those are the kinds of things that we see immediate impact that will continue to pay for the future as well. And then obviously, all the work efforts that we did last year was seen now in the first quarter the results of those accounts. So we want in third or fourth quarter of 2021. So we're excited about where we go from a Reconstruction standpoint.
Chris Cooley: Appreciate that additional color. And I just wanted to circle back as well just to kind of try and dial in the model going forward here a little bit tighter, you know, post the fourth quarter, any update that you can provide just as it pertains to the non-surgical side of the portfolio. And specifically, just think about scar management. And I'll hop back into you, thanks.
Ron Menezes: Yes, sure. I'm sure you're talking about BIOCORNEUM, and BIOCORNEUM did extremely well last year. We expect similar performance this year, Chris. I don't know if we broke that down by accordions last year.
Andy Schmidt: We did not yet but we provided was, you know, it started out in the mid seven figures is basically a cash cow. And we see it as a bigger contributor going forward.
Chris Cooley: Thank you.
Operator: The next question is from Kyle Bauser of Colliers International Capital Markets, please go ahead.
Kyle Bauser: Great, thanks for taking the question. And for all the updates so maybe I'll switch to fat grafting so is from our checks. Sounds like physicians and perhaps even consumers are quite price elastic in the fat grafting space. So to drive adoption, pretty key, at least according to a couple KOL that you can show better efficacy of fat retention. So it's great that you're running the clinical trial, you're kind of all over this. I'm just wondering, could you talk a little bit again, about what the industry averages for fat retention from fat grafting with traditional methods? And what do you think would be a reasonable threshold to achieve to drive meaningful adoption, I mean, they just need to be statistically significant, or use their clinically significant threshold that might make more sense, just kind of curious how you're thinking about that.
Andy Schmidt: Hi, Kyle. Most products in the marketplace, including the two are market about two companies and the homemade products by surgeons, about 40% to 50%. After 12 months, there, we'll see you know, it's about 40% to 50% retention, that's been pretty much the threshold that they go by. The data on the system, the fat grafting system we acquire from US General, is that 71%, up to 12 months. Now, that's where we're trying to duplicate that in that extensive study, so a little higher in order to see that, to make sure that is the case, we do very confident because they had beautiful data, which was approved by the FDA at 71%. So we're going to be doing the studies in more patients to see that fat retention. And that's going to be kind of the game changer, you're going to be able to apply and use fat grafting for Reconstruction, that a patient can last majority of them over 12 months. You can also see that as well, in different parts of the body, part of the body transformation, and buttocks and other parts of the body potentially down the road as a filler as well. Most synthetic fillers out there, they usually are good for 12 to 15 months. Now we have fat grafting, which is a patient's own tissue, that could be 70% for about 12 months. So you really got to see very consistent fat grafting for predictable fat grafting. That's very different. What's in the marketplace right now.
Kyle Bauser: Appreciate that. Yes. And then I follow up. Can you remind me, what some of the top reps in implant business are generating sales per year, and roughly how long it takes it to ramp a new rep on average? Now, it's kind of varies. Thank you.
Andy Schmidt: Yes. So last year, we were very proud of that close to 1.6 million per rep. A year and a half ago was 1.2 million per rep. We think the 2 million per rep is what I like to be eventually. And we have reps that have $3 plus million territories, we usually have to divide it because it becomes very difficult for that one representative cover. So we you heard me stating we added 11 new individuals, some of them are going to areas you think it makes sense to add new representatives, South Florida, parts of California, etcetera. So we feel that $2 million per rep is a good target for representatives in as it goes well above that makes it very difficult to manage. In your second question about how long does it take? In the past, Kyle, you probably say six a month as somebody walks in started, meet the customer customers, establish the relationship with customers. So I learned about hospitals. But because we're hiring mostly, if not all individuals, to have that extensive or experience. They're coming in and make an impact. Right away within two to three months, we'll see people make an impact the territory, we're teaching them the cosmetic side. But everybody coming in well-known with the connection to hospitals, we check into bringing those individuals from well, no big med device companies. And they liked the flexibility. They excited about the opportunity to come on board to Sientra. And like join a company that's fast, nimble and makes quick decisions. So they're really excited about joining us. And they're seeing the impact within the next two to three months as you join a company.
Kyle Bauser: Okay, that's great. Appreciate that. Well, thanks for all the updates. I'll jump back in queue.
Operator: The next question is from Anthony Vendetti of Maxim Group. Please go ahead.
Anthony Vendetti: Thanks. Appreciate it. Thanks, Ron. Thanks, Andy. Just a follow up on that. And then I just have two quick questions. So the goal of 2 million per rep, you increase the average rep to 1.6 million so and that was up 33% from 18 months ago. The goal of 2 million per rep is that is that 18 months from now is that is that two years from now? When do you think got the average rep to do 2 million per year?
Andy Schmidt: Yes, I can hear you making some mass calculations there, Anthony, in background. We're kind of targeting about one eight plus, this year, obviously, you know, we're now at 56 reps. So you've targeted about one, eight. And then eventually to get to that, you know, you heard me saying, we're going to double our revenue next three years. So that means some time, not 23. But sometime after that, we'll probably have to assess the deployment of our Salesforce. We're very confident on a current structure from both sales and marketing for the next 18, 24 months. When we added those representatives, we're already thinking of fat grafting launched beginning next year. But keep in mind, it's going to be the same rep that's already in that a hospital and that also the office for the cosmetic doctor, and to be talking about fat grafting, in addition to the products who have.
Anthony Vendetti: Okay, that's helpful. And then you added 200, new accounts, this quarter, is that the is that the run rate, approximate run rate, we should look at per quarter for the rest of 22. Give or take a little bit.
Andy Schmidt: Give it take a little bit. Remember, one of the things I announced the last quarter is that we're focused on expanding of market share in the current counts. We don't want people to be so focused on new accounts that they forget accounts. 90% of our revenue was driven by existing accounts, and adding accounts is important. And by to Anthony, 80% of those accounts or edit or hospital accounts. They’re Reconstruction accounts in this quarter. We have a different target. I'm not even sure what the target is per quarter, but every rep, all of us have a certain number target was supposed to add per quarter. But I can say that 200 counts is a really good number.
Anthony Vendetti: Okay, and then just last question on Origin. How is the where are you at on that to interpatient 10 clinical site study? Any update on that?
Ron Menezes: Yes, we're all the sites have been identified, we actually have about 15 patients already, you know, in the process of being enrolled. So we already started the process, we're very, very confident in our ability to finish the study. In time for the launch. Remember, the product is approved, has all indications and very broad indication by the FDA would like to have as more ways to talk about the product based on the clinical data. So again, mass general did a wonderful job with clinical data. We just want to have more data to be able to share it when they launched a product beginning next year.
Anthony Vendetti: Okay, great. Thank you so much. We'll hop in the queue.
Operator: . The next question is from Kyle Rose of Canaccord. Please go ahead.
Unidentified Speaker: Greg. Good afternoon. And thank you for taking the questions. This is Jubran on for Kyle. So maybe to follow up on that point run with over 300 accounts now added in the last two quarters, both coming in at around 80% Recon. Where does your total account base stand now? And what's the rough split there between Recon and Augment?
Andy Schmidt: Yes, Kyle , we're close to 3000 accounts. Okay, right now? So we're pretty excited about that. And I would say it's still about after that it's 60 plus percent on the rest are Recon. But trust me quite a bit.
Unidentified Speaker: Yes. And then maybe just follow up or check in in terms of, yes, US expansion to China, Japan, Middle East. You know, are those distribution agreements in place? How are approvals tracking there? Are you still targeting China in the next two plus years? Just maybe a refresher on other, US initiatives?
Ron Menezes: Yes. So let me start first in Canada, because there was a question about Canada. It didn't answer that is, we're very excited because we had our first patient Canada. We have a lot of Canadian surgeons that very excited about using our implant, we have several surgeons already bought our implants. So Canada is going extremely well. We're very excited about the future there. Middle East, we're still in negotiations there. In China, we are engaged in talking to the Chinese regulatory agency. I don't think we've changed the timeline for some time in the next few years. We're really on track for approval. We're working with a distributor already right now in China, and we're discussing with Chinese FDA, so everything's progressing extremely well in China. It will probably think 24-ish; it will be launched there and China.
Unidentified Speaker: Thanks again for taking the questions.
Operator: There are no other questions at this time. This concludes our question-and-answer session. And today's conference. Thank you for attending today's presentation you may now disconnect.
