Unidentified Analyst: Joe, you covered some of the things I was going to ask about the single-use ophthalmic product that you announced yesterday, but there’s one thing that you didn’t cover what I wanted to ask about, which is that the economics of single-use, as you’ve discussed a number of times, is it’s a much lower price point and higher — obviously, higher volume and presumably, a more automated production. And so it’s more of a fixed cost operation as far as your company is concerned. And that in order to really make money on it, you have to have — we have to be pushing through a certain amount of volume. And often, other than the initial pipeline filling, it takes a while for your customers to develop demand for their product, they have to train people how to use it and so forth.
If this — if your customer that was subject to the agreement you announced yesterday decides to take the thing in-house or to have it produced, say, overseas, some place inexpensively. Does that make it more difficult for you to achieve profitability in the single-use category collectively, not just that product, which obviously gaining royalties is doing nothing for it, is very profitable. But might that hurt the gross margins on some other products you have because your volume would be lower?
Dr. Joe Forkey: Yes. No, that’s a great question, Rick. So if our plan was simply to move forward with an expectation of manufacturing single-use products in every case, then it’s true, this would make it more challenging. Although I will add, there’s a little caveat there because a large part of the volume economics comes from sourcing of the components, the materials that go into it, part of the BOM. And there are opportunities, I think, even with our individual customers who may choose to pay us a royalty to manufacture themselves or with a third party. We still have a unique relationship with those customers, and I think there are still opportunities where we may aggregate the demand for certain components and be able to step in, in the supply chain and still supply it to them at a lower cost if we’re aggregating the demand from all of our customers.
And so that may be another place where we can continue to benefit from the economies of scale. The other thing I’ll add is that with this new agreement, there’s nothing that says that going into the future, we might not still make the decision to expand the company in a way that we’re in a better position to manufacture ourselves, right? I think we’re going to have to see a little bit how the next agreement like this one pans out and what kinds of opportunities we have to move forward. One of the things that was really beneficial with this technology agreement is that we were able to get started in the single-use space without having to make a large investment on a low labor cost facility overseas and all of the start-up and stand up that that requires.
Once we get to the point where we see that, that might be a useful thing to do, there’s nothing that says that we can’t come back to these existing customers and pull those projects back into a facility like that. Again, I don’t know exactly where we’re going to end up. But the nice thing about this agreement is it hasn’t eliminated the possibility of moving in any of those directions, but it has given us an opportunity to start into the single-use market in a way that were guaranteed some bottom line profit no matter how this goes moving forward.
Operator:
Robert Blum: Gary, this is Robert Blum here. I’ve just got one question I know that hadn’t sort of been touched on already and I’ll turn it back over to you if there are any questions. Joe, can you just sort of comment a little bit on sort of the integration of Lighthouse? It’s been sort of a year now. Any sort of general updates or commentary you can provide on that for us?