Taylor Harris: Hi Nick, so where we’re at with the launch, we think there’s a pretty long runway ahead. So first quarter was truly limited commercial release, which means a few KOL-type sites. And we were in around 10 markets in the first quarter with that. As we move into the second quarter, we’re broadening a bit in some of those markets. So for example, in Australia, we’re starting to reach out more broadly in the dermatology community. We are not — we’re not yet moving to full market coverage, though. So there’s — I think over the next several quarters, there’s going to be a gradual broadening within some of these target markets. And then as we get into later in the year, we’ll start moving into some of our distributor territories.
And then there are other markets like Japan, where we probably won’t have regulatory approval in 2024, so that would be something that we layer in next year. And there are other markets that will be able to come online over the years to come. So as an example, China, that’s probably a multiyear opportunity in terms of the length of time it will take us to get clearances there. So I think you’re going to see this launch build for a fair amount of time.
Nick Sherwood: Awesome. Thank you for that color. And then switching gears, can you talk a little bit about sort of the innovation you’re driving through your R&D, where are you trying to build upon your current product lines to make them more appetizing to your current customers? Or are you also looking into – more looking into new products that can really kick things off and start growing revenues faster?
Taylor Harris: There’s – what I’d say to start with is we don’t suffer from a lack of ideas. We’ve got a really innovative team and an innovative leader in Michael Karavitis – and what the team is working on at various stages would be a combination of everything you described. What to expect in the near term, though, I would say we’re seeing good near-term opportunity is just on the clinical expansion with AviClear. So we are going to be putting some investment dollars behind some initial clinical studies in new indications. Over time, we will likely need new hand-pieces to support some of those new indications. So this is early, but we see a good opportunity to expand the utility of this system. And this is a system that’s – it’s a novel wavelength, a new wavelength for the industry, and we’re the leader. So it just makes sense to invest behind a capability set like that.
Nick Sherwood: Understood. And then for my last question, you kind of mentioned briefly the potential GLP-1 impact into the body contouring business. Can you just give any additional color or detail that you’ve heard from some of your partners and customers about that?
Taylor Harris: Sure. So just to add a little bit more color. I think this is probably the area where we had a little more weakness than expected in the first quarter. I think across the board, things were — in terms of the macro environment, we’re more in line with what we thought. But body took a step down for us, and we’ve heard it across the industry. So we’re pretty light in terms of what we sold in the first quarter. What we’re hearing is just that with the GLP-1 dynamic, you got a lot of patients who are moving on to that therapy. And so practice volumes at customer sites are down. And so that obviously creates an air pocket in the market for people thinking about investing in a new energy-based platform. Now what we also hear and what we expect is that patients aren’t going to be on these drugs forever.
And while they’re really good at debulking, they aren’t going to address stubborn pockets of fat, which are likely to be residual and – which is what the body contouring industry was designed for in the first place. So I think you’re likely to see a wave, people are riding that GLP-1 wave right now. They’re going to come off. They’re going to have stubborn pockets of fat. They’re going to have loose skin. They’re going to have – they’re losing muscle just like they’re losing fat. And we believe there’s going to be a need in the future for the energy-based device space to address. What I can’t tell you is how long it’s going to take that wave to get to shore, but we think it’s coming.
Nick Sherwood: Thank you for that detail and I’ll return to you.
Taylor Harris: Thank you.
Operator: This concludes the question-and-answer session. I’d like to turn the conference back over to Taylor Harris for any closing remarks.
Taylor Harris: Well, thank you. Thank you, everyone, for joining us. Before we conclude, I just want to thank the entire Cutera team, we’ve just got an amazing group of passionate, committed Cuterans. And so thanks for all the hard work, and thanks for everyone who joined us today. Have a good evening.
Operator: This brings to a close today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
