Terry Weber: So the primary growth in that procedure, that 6.6% year-over-year procedure growth is in our existing clinics. And I would say there are two categories. One is that top tier clinic. We are continuing to expand their business and their increased amount of hormone optimization. The second is targeting that second tier clinics to move them into a top tier. And then always, as we’ve said, those new clinics provide — and I don’t give the exact numbers, but they provide that base to build over the next 18 months. So we are bringing more clinics to training quicker, and you’ll see that acceleration in the second half of the year as that Quick Start program really gets them engaged in increasing their procedures in that first 90 days. So you’ll see — but three quarters or the greater one is from our existing clinics and really working with them to grow their business and then to a lesser degree on those new clinics that they’re performing well.
Kaumil Gajrawala: Okay. Got it. How is the new clinic adds this quarter versus in the past? I don’t think you gave a number, but better, worse, on same pace?
Bob Peterson: We typically — as you know, we typically don’t give specifics on new customer adds, but one thing I can tell you, as we look at the new customer growth, and as Terry said a little bit earlier, no one’s better than Biote in bringing in new customers into the hormone business. And I can say that as we start to see — we are seeing a higher quality, new customer coming in the door. And I can tell you that we’ve never been more focused on who we are targeting and how we are indexing. So I can tell you, we are coming off of one of our best years since 2018 from an onboarding perspective of new customers. And as Terry said, a big contributor to that is our Quick Start program, which is proving to be pretty effective.
Kaumil Gajrawala: Okay, great. And maybe longer term, the — as your business is evolving with BioteRx and such, what should the — is there a different margin structure? How should we think about how the business might look — actually, there’s two big — between the vertical integration and with the addition of new products, how should we just be thinking about what the P&L will look like over time below the revenue line?
Terry Weber: [Indiscernible] about the new products — yes, the new products, and then I’ll pass it to Bob to talk about the margins in Asteria. I think if you look at 2024, I would look at it a very nominal contribution on those new products in that we are getting a transaction fee. We are not actually manufacturing those products yet. So we have acquired a 503(B). That will be in our future, but at this point, it’s a transaction fee. So what it does, though, it gives us that one stop shop. Our providers are doing GLP-1s and they are doing hormone optimization. As a matter of fact, at a new training last Friday, 100 providers, I asked how many were doing GLP-1s. Well over a third were already doing GLP-1s. So how testosterone in our core business works with that side effect of the GLP-1s and the loss of lean muscle mass, we really believe testosterone will be core to that conversation over the next few years.
So that BioteRx becomes critical in what we educate on how we teach those providers to use both sets of products, right? So I think this therapeutic wellness category is only going to expand and you’re not going to see the same type of a provider as you did 2 years ago. Your family practice providers, all of the OB/GYNs, everyone’s expected to understand how to navigate these products and their side effects. And that’s where Biote really comes in. And then I’ll let Bob comment on the integration.
Bob Peterson: Yes, and I think, Terry, you hit on it. I think right now, when we look at the transaction fee and it isn’t going to be material to our year. When you think longer term, it would be great at some point to have — to do what we are doing with Asteria to be fully integrated. But at this point, we don’t really have line of sight into executing that plan as of yet.
Kaumil Gajrawala: Got it. Thank you.
Operator: Your next question comes from George Kelly with ROTH MKM.
George Kelly: Hey, everybody. Thanks for taking my questions. So maybe to start with Asteria, just a follow-up on some of the questions that have already been asked, but I’m curious how quickly you expect to shift your core hormone pellet production to that facility.
Bob Peterson: No, it’s a really good question. When you see — when we executed the closing date, obviously, we’ve been working quite diligently to get all the strategic parts up and running. And I would just tell you, we are — we may be seeing a little bit slower uptake in the Q2 range as we’ve talked about in the past. We really want to hit the ground going — hit the ground running. I still think we are on a strong pace to deliver in the second half. And I think everything is starting to line up in place. I think just the late start based on the closing has caused a little bit of a slowdown in the beginning of Q2. Does that answer your question, George?
George Kelly: It does. Is it fair to say, by year-end the vast majority of your pellet business will be produced internally?
Terry Weber: I think what we are talking about, what Bob is trying to say is that when we are looking at state licenses, yes, I’d say the vast majority by the end of the year, George, but the only thing we don’t control is a state license from California or some of the other states that mandate their own timing and schedule as you convert licenses.
Bob Peterson: And another thing, George, just to keep — sorry, go ahead.
George Kelly: No, go ahead, Bob. I interrupted.
Bob Peterson: No, no, no. The only other thing I would say is, as we start the converting — conversion process, there will be a little bit of a lag also due to the bleed down of inventory — existing inventory within the clinic. So as Terry mentioned, very clear on how we obtain state licensure, but there could be that slight delay for people who maybe have — are over indexed on inventory as they bleed down when they start to take on new inventory, that will be another factor we’ll have to watch closely.
