ReShape Lifesciences Inc. (NASDAQ:RSLS) Q3 2023 Earnings Call Transcript

ReShape Lifesciences Inc. (NASDAQ:RSLS) Q3 2023 Earnings Call Transcript November 10, 2023

Operator: Good afternoon and thanks for joining the ReShape Lifesciences Third Quarter 2023 Conference Call. I would now like to turn the call over to Michael Miller from Rx Communications.

Michael Miller: Good afternoon, and thank you for joining the ReShape Lifesciences third quarter 2023 earnings call. I’m pleased to be joined today by Paul Hickey, President and Chief Executive Officer; and Tom Stankovich Chief Financial Officer. Paul will provide an overview and update on the company’s activities, which will include a discussion with Dr. Caroline Apovian, a member of ReShape’s Scientific Advisory Board. Then, Tom will review the financial results for the period. I’ll then turn the call back over to Paul for some closing remarks, after which we’ll open the call to a question-and-answer session. As a reminder, this conference call as well as ReShape Lifesciences’ SEC filings and website, including the Investor Information section of the website, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

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Actual results could differ materially from those discussed due to known and unknown risks, uncertainties and other factors. These and additional risks and uncertainties are described more fully in the company’s filings with the Securities and Exchange Commission, including those factors identified as risk factors in the company’s most recent Annual Report on Form 10-K. As an additional reminder, ReShape’s stock is listed on NASDAQ, trading under the symbol RSLS. I’ll now turn the call over to Paul Hickey, President and CEO of ReShape. Paul?

Paul Hickey: Thank you, Mike, and thanks to all of you for joining us this afternoon for our third quarter 2023 earnings call. After I provide an overview and update on ReShape’s activities, we will be joined by a member of our Scientific Advisory Board, Dr. Caroline Apovian, Co-Director at the Center for Weight Management and Wellness in the Division of Endocrinology, Diabetes and Hypertension at Brigham and Women’s Hospital in Boston, and a Professor of Medicine at Harvard Medical School. As an expert in key opinion leader in her field, I’ve asked Dr. Apovian to provide her clinical viewpoint related to GLP-1s and their impact on the care continuum for obesity. So most important takeaway from this call is for all of our investors to understand that we remain dedicated to achieving profitability by executing our growth strategies and maintaining our emphasis on creating a shareholder value.

Yesterday, I visited with surgeons from one of our centers of excellence in Louisville Kentucky. Now, next Lap-Band dual vagus. This site has implemented the Hive platform and also is part of our co-op marketing program. Despite the pressures from GLP-1 adoption this center is on pace to have year-over-year Lap-Band procedural growth in 2023, validating that our marketing initiatives are working. There’s much look forward to as we move towards 2024 and we are optimistic about the growth potential for the company. Before I recap our third quarter and subsequent highlights, I’d like to comment on important events occurring within the obesity market today. As most of you already understand the global obesity market is growing, at an alarming rates and carries with it significant medical repercussions and associated economic costs, obesity remains a complex lifelong disease that requires personalized treatment to ensure long-term weight loss goals are achieved.

I’m sure you are also aware of the growing popularity of GLP-1 agonists that have brought significant benefits to those suffering from type 2 diabetes and help those who are obese. We believe that GLP-1 adoption is expanding the medical weight loss market by vastly reducing the stigma that often occurs around obesity and medical intervention including bariatric surgery. The GLP-1 related big pharma marketing efforts and resulting adoption has helped increase the numbers of people seeking medical attention for this disease, especially by those who have avoided surgery in the past. Given the increasing body of evidence pointing to the fact that weight loss through the GLP-1 usage has limitations related to comorbidities and accessibility, we believe that the market opportunity for the Lap-Band will increase.

From a continuum of care perspective, individuals with obesity and GLP-1 therapy are likely potential candidates for Lap-Band bariatric surgery as the next viable anatomy preserving weight-loss treatment. Certainly, I will have Dr. Apovian speak to her personal experience, which is representing what we are hearing from physicians across the US that the GLP-1 adoption while potentially delaying surgical consults in the short-term is increasing the number of patients who would consider bariatric surgery. In other words, once GLP-1 agonists patients get a taste of weight loss, yet have issues with the drug’s accessibility durability or tolerance, they will contemplate bariatric surgery, especially imminent ways surgery procedures like the Lap-Band.

Now before I introduce Dr. Apovian, let me take a few minutes to update you on our progress related to our three primary growth pillars. As I recall, our first pillar is to operate our business with a disciplined metrics-driven approach to drive predictable revenue expansion through a sustainable and scalable business model. The second is to continue to expand our product portfolio and pipeline across the care continuum. And our last or third pillar is to continue to validate our evidence base weight loss solutions leveraging our Scientific Advisory Board for key insights on strategic initiatives. Our first pillar, remains paramount for reshape to deliver shareholder value and ultimately profitability. As we consider the impact of GLP-1 adoption for weight-loss treatment, which has put pressure on several markets including bariatrics, it was necessary to take a hard look at our operations, make significant cost reductions while ensuring growth and that our company adheres to key P&L metrics.

Thom will later detail the expense savings, we have identified realized and are planning for. But in summary, we have identified and implemented effective November 1 cost reductions totaling approximately $8 million, representing more than a 40% reduction in operating expenses for 2024. We are optimizing our marketing spending while making additional reductions in consulting services, totaling approximately $2.4 million. We have also executed a reduction in force of approximately $1.2 million. We have decided to temporarily pause our reshape care program, and achieve an estimated savings of $0.8 million while we continued our efforts to secure a self-insured employer to provide ReShape care to their employees. We have also planned for a $0.9 million of reductions for incentive compensation and other payroll-related amounts.

All part of streamlining our team significantly, but without affecting revenue. Our Board is aligned with our strategy and will also take a 50% reduction in their compensation. Taken together, these reductions will allow us to focus and invest in our growth drivers while at the same time, extending our cash runway. These changes are bold, necessary and indicative to our commitments to our first growth pillar, I established late in 2022. In point of fact, with these 2024 reductions, the company’s core operating expense reductions between 2022 and 2024 are estimated at $22 million or 70%. In addition to the necessary cost reduction initiatives related to our first growth pillar, we made significant progress with our newly improved digital lead generation and patient engagement campaign.

As I mentioned earlier with Lap-Band Louisville, we have seen an increase in the quality of patient needs while successfully reducing costs in targeted markets, for our surgeon advocates operate. In particular, our exclusive partnership with high medical allows us to advance lead optimization software that can enhance patient engagement and increase patient volume. This software utilizes AI SMS patient self-service technology, which in combination with our targeted direct-to-consumer marketing campaign helps individuals effortlessly overcome new patient intake challenges. As a result, patients can easily book appointments with medical professionals at any time. Let’s now discuss our progress executing our second growth pillar. We are well positioned with our current FDA approved Lap-Band system, which provides a minimal invasive long-term treatment for obesity and is safe for surgical alternative to more invasive weight loss surgeries.

This past June, we filed a PMA supplement with the FDA for the next-generation Lap-Band 2.0 Flex. This product has been designed with physician feedback in order to improve the patient experience. Like the current Lap-Band the Lap-Band 2.0 Flex can be adjusted post-operatively to increase or decrease the band opening depending on the patient’s tolerance to ban therapy. Additionally, Lap-Band 2.0 Flex has a new feature called Flex technology, which acts as a relief valve enabling larger pieces of food to pass through the narrow passage more easily. Specifically, the Band momentarily relaxes before returning to its resting diameter while minimizing discomfort caused by swallowing large pieces of food. We anticipate approval from the FDA by year end or early 2024.

We believe based on surgeon feedback, that our Lap-Band 2.0 Flex will be a growth catalyst for the company’s Lap-Band franchise once approved. Also of note, in September, we signed an exclusive royalty-bearing license agreement with Biorad to manufacture, commercialize and distribute the Obalon Gastric Balloon System in India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka and the Maldives. The license agreement provides for $200,000 in upfront payments from Biorad to ReShape and ongoing license payments of 4% on a gross sales of the Obalon Balloon System in the territories. The agreement is important as it represents the first step towards re-introducing our patented Obalon Balloon System. And we believe that Biorad, with decades of experience manufacturing distributing medical devices in the vast cell-data the Asia market, potentially reaching approximately 20% to 25% of the world’s population, as an ideal partner to expand the reach of our technology.

We expect this agreement will lay the groundwork catalyzed the successful relaunch and commercialization of the Balloon System in markets worldwide. By given the scope of our second growth pillar to expand our portfolio and global distribution, we have recently engaged the Maxim Group on an exclusive basis to identify strategic merger and acquisition opportunities that provide synergistic partnerships. Engaging Maxim and executing on this initiative is very high priority for me and the ReShape Lifesciences As for our third growth pillar, we continue to work closely with our Scientific Advisory Board or SAB comprise an internationally recognized experts and surgeons in the obesity and metabolic disease fields. The SAB is fully engaged in helping us develop our launch strategy for our Lap-Band 2.0 Flex and marketing our suite of weight-loss solutions.

At this time, I’d like to introduce Caroline Apovian from Brigham Women’s Hospital and Harvard Medical School. As previously mentioned, Dr. Apovian is a member of our Scientific Advisory Board and has been a key opinion leader and an expert in the field of bariatric surgery for decades. She’s also nationally recognized experts on nutrition, metabolism and obesity medicine Caroline, I’d like to ask you given to everyone your background and then discuss your view on the recent changes in the field of obesity treatment including the adoption of GLP-1s and the overall impact you feel they will have on that surgical procedures available today. But also like to hear about your experience with combination therapies comprising GLP-1s and other gastric surgeries including Lap-Band to help those who plateaued with their weight loss.

Dr. Apovian.

Caroline Apovian: Thanks, Paul. Good afternoon. As Paul mentioned, I am the co-director of the Center for Weight Management and Wellness in the Division of Endocrinology Diabetes and Hypertension is Brigham and Women’s Hospital. And I’m a Professor of Medicine at Harvard Medical School. My interest in obesity began 35 years ago, when I was a fellow in Nutrition & Metabolism at the New England Deaconess Hospital after completing my internal medicine residency there. I was lucky and honored to have studied under George Blackburn. So he’s considered the father of nutrition and obesity medicine. And since that time I have focused completely on obesity and nutrition. Obesity is a disease and its many serious complications exert a heavy toll in both human and economic terms.

More than a third of adults in the United States have obesity back in 42% of the population and they are subject to elevated rates of type 2 diabetes, Hypertension, Dyslipidemia and Cardiovascular disease. The 42% of Americans who suffer from obesity with a BMI over 30 will likely go on to develop type 2 diabetes and heart disease. The negative effect on quality of life is enormous. GLP-1 and other, we call them news is nutrient simulated hormonal therapy are having a tremendous positive impact in that more people than ever are asking about treatment for their obesity. We have learned almost all that we know about GLP-1 and other gut hormones from our experience with bariatric surgery, which works by altering the secretion of gut hormone. In addition, we’ve learned from laparoscopic banding that the use of GLP-1 and other new initiatives would be complementary with the Lap-Band to facilitate long lasting weight loss.

We’re utilizing as many of the GLP agonists as we can is there analogs of naturally occurring gut hormone that can be helpful in reducing body weight by now up to 20%. And even more since today approval by the FDA of Zap [ph] about. Unfortunately, insurance companies and the government haven’t kept up with the science and don’t really embrace obesity as a disease. So these powerful drugs are not ubiquitously covered and they’re certainly not covered by Medicare or Medicaid. In just the last year at our center for Weight Management Wellness at the Brigham we’ve seen more than 10,000 unique patients just on the medical end. So not bariatric surgery, bariatric endoscopy but the medical weight management and saw 10,000 patients. I believe that the utilization of GLP-1 the new shares will ultimately increase the number of patients who would consider surgery.

In other words, well first of all we’re the 10,000 patients are certainly coming and seeking medical treatments but I’m able to convince those patients with BMIs over 40 over 35 but more than I used to that surgery really is a better option for them. And I’m seeing this anecdotally over the past six months. And also once patients are new just yet understand that they can lose weight by altering the gut hormone and they feel so much better. Again yet have issues with accessibility, durability, tolerability thereof. They may contemplate bariatric surgery more often and we are seeing this to be true. And that includes minimally invasive procedures like the lab there. And we have been able to convince many patients with BMIs over 40 that surgery met remains their best option and we’re seeing this again in the last six months or so since certainly – since the advent of Wegovy and Mounjaro.

Now even though this is true bariatric surgery is still underutilized in the United States, only 1% of patients eligible for the surgery get the procedure done annually, 250,000 procedures done annually. If the same thing happened with Cardiac surgery, we would say this was negligent, but the problem is overlooked with coping city. Bariatric surgery is like getting your gallbladder out, but patients feel they have the erroneous idea that this is aggressive surgery and that people regain their weight which of course is not true. Many patients also don’t see their obesity as a disease. The nurses are helping patients understand that they have a disease because they take the medication they feel full for the first time in their lives. And if they want to continue feeling that way and losing more weight, they understand now that they are understanding more and more we consider bariatric surgery including the Lap-Band.

In order to effectively treat obesity, it’s imperative. The combination of interventions such as diet exercise medications like are nutritious endoscopy and bariatric surgery including the Lap-Band being employed at different stages of a patient’s weight loss through. Combination therapy including GLP-1 and uses for those who plateau with their weight loss from bariatric surgery will help individuals get back on track. That said to ensure patients receive the appropriate treatment, it’s crucial for medical and surgical societies to collaborate on the development of guidelines that stratify patients based on BMI and determine which medications and procedures can be used alone or in combination. I certainly hope that these insights that I have got now from my 35 years of experience and most importantly over the past few years, hope that these insights have been helpful and look forward to answering questions later during the call.

I’ll pass the call back to Paul.

Paul Hickey: Well, thank you, Caroline [ph]. That was — I think it hit the spot and I think that was appreciated by the listeners and I’m sure there’ll be questions for you. But as a leader in your field, I truly appreciate your participation and hearing your opinions firsthand. So before I turn it over time just a few more thoughts, based on what you heard so far. We do remain very confident that with our Lap-Band and expected future offering in the Lap-Band 2.0 Flex. That we as a company are uniquely positioned with the least invasive safest and most durable weight option for those patients that have historically had an aversion to medically managed weight loss and surgery. Given the growing body of evidence pointing to the fact that weight loss due to GLP-1 usage has limitations related co-morbidities and accessibility.

We believe that the market opportunity for Lap-Band will increase. And from a continuum of care perspective, these patients are likely potential candidates for bariatric surgery, as a next viable weight loss treatment. I’d now like to turn the call over to Tom Stankovich to provide a recap of our financial performance. Tom?

Tom Stankovich: Thanks, Paul. And once again thank you all for joining our webcast this afternoon. As a reminder, a full discussion of our financials is available in our press release and 10-Q. As Paul mentioned earlier, in November, and in response to continued pressure on the company’s revenue caused by the adoption of GLP-1, we are reorganizing the company. I’ve identified cost reductions of approximately $8 million or more than 40%, just for 2024 alone. Specifically, a reduction in force of approximately $1.2 million in November and December and $300,000 more budgeted cost phasing in early 2024, as well as $900,000 of reductions in incentive compensation and other payroll related amounts have been implemented across all expense categories.

Core operating costs in total have been reduced by approximately $5.4 million, which includes reductions in selling and marketing costs of $2.4 million without affecting our continued marketing spend optimization, costs related to the pause of ReShape care about $800,000. Expenses related to G&A totaled $1.3 million, primarily in professional consulting fees and insurance costs. R&D expense grew $900,000, which primarily includes consulting and reduced admin fees. Additionally, third quarter 2023 core operating expenses were 37% lower than the third quarter of 2022. Taken it all together, with actions thus far, we’ve made significant progress reducing our core operating expenses, cutting approximately $22 million or 70% between 2022 and 2024.

A full discussion of our actual financials is available in today’s press release and 10-Q. So I will just take over a moment. I will just take a moment to review key financial metrics for the third quarter ended September 30, 2023. Our revenue totaled $2.2 million for the three months ended September 30, 2023, which represents a reduction of $600,000 compared to the same period in 2020. Growing popularity of GLP-1 prescription drugs for weight loss treatment is the primary reason for the decrease in sales volume in the US and internationally. We have focused our new marketing strategies through targeted and AI supported digital media campaigns near bariatric surgery centers, while reducing cost and increasing efficiencies. We expect that these efforts will come to fruition during the fourth quarter of 2023 and beginning of 2024.

Our continued focus on increasing demand for the Lap-Band system and recently launched three new sizes of calibration tools will grow revenues. Additionally, we anticipate receiving FDA approval for the Lap-Band 2.0 Flex late this year or early in 2024 followed by a US product launch that should contribute to increased sales going forward. Gross profit for the three months ended September 30, 2023 was $1.3 million compared to $2.1 million for the same period in 2022, a decrease of $800,000. Gross profit as a percentage of total revenue for the three months ended September 30, 2023 was 60% compared to 75% for the same period in 2022. The decrease in gross profit percentage is due to the decrease in sales volume primarily related to GLP-1 drugs coming to market.

Nevertheless it is the highest gross margin percentage in any quarter this year as some of our cost reductions have had a positive impact on gross margins during the third quarter. Sales and marketing expenses for the three months ended September 30, 2023 decreased by $800,000 to $1.8 million compared to $2.6 million for the same period in 2022. The decrease of $800,000 is primarily due to a decrease in advertising and marketing expenses as we re-evaluated our marketing approach and have moved to a targeted digital marketing campaign. General and administrative expenses for the three months ended September 30, 2023 decreased by $1.7 million to approximately $2.1 million, compared to $3.8 million for the same period in 2022. The decrease is primarily due to a reduction in payroll-related expenses and personnel changes and reductions in professional services.

Additionally other reductions included intangible asset amortization as the company impaired its finite intangible assets during the fourth quarter of 2022 and a decrease in rent and insurance costs for the expired lease of our former Carlsbad California location. Research and development costs for the three months ended September 30, 2023 remained consistent with the same period in 2022 — and Professional Services. Non-GAAP adjusted EBITDA loss was $2.9 million for the three months ended September 30, 2023 compared to a loss of $4.2 million for the same period last year. We ended the quarter with $1.5 million of cash and cash equivalents and remain debt-free on our balance sheet with a $2.8 million in net proceeds from our recent public offering in October and the cost reductions detail during the call, we will preserve cash and extend the company’s cash runway.

As we finish 2023 and move into 2024, we anticipate our revenues increasing and a continued reduction in our operating expenses. With that, I will now turn the call back over to Paul.

Paul Hickey: Thank you, Tom. Before we open the call up for Q&A, it’s important to reiterate as both Tom and I have detail that we have and will continue to significantly reduce operating expenses across all categories, so we can invest in our growth initiatives. The bold steps we have taken to reorganize the company will help to ensure sustainability and scalability. We continue to prioritize investments, including marketing automation to support scalable lead acquisition, segment and consumer centric messaging be an updated website for improved patient engagement and a frictionless booking system with qualified providers while further reducing lead generation costs. Taken together, we expected to increase Lap-Band procedures and ultimately revenue.

We will continue to develop and offer a portfolio that is differentiated from the competition with transformative technologies that consist of selection of patient friendly non-anotomy changing lifestyle enhancing products programs and services that provide alternatives to a more invasive bariatric surgeries to help patients achieve healthy durable weight loss. At the same time, we will continue to work with our world-class scientific advisory board to continue to execute on our plan for success in a global market that is changing in historic fashion to normalize safe and effective treatments for obesity. This concludes our prepared remarks, so now we would like to open the call to your questions. Operator?

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Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from the line of Anthony Vendetti from Maxim Group. Your line is open.

Anthony Vendetti: Thank you. Thanks for that overview Paul and for also Dr. Caroline Apovian. That was very helpful to hear your view. Maybe starting with Dr. Apovian, obviously, there’s a lot of news around the GLP-1 today Lilly’s was approved for weight loss or obesity. And there’s also as you discussed there’s comorbidities, there is a potential adverse side effects we don’t know at what level at this point, right, other than what the studies are showing. And we’ll I guess, we’ll find out over the next 12 months or 24 months as this rolls out. What is your expectation? It’s obviously impacting sales for the Lap-Band from bariatric procedures as patients and consumers decide tried something new. Do you think it’s a 12 month process before they realize maybe a the cost or the side effects for some of them are not worth it is it two to three years before some of that sort of data starts to set in or are some of the apathy for GLP-1?

Maybe it starts to set in or the initial, sort of, shiny new toy starts to wear off it. What’s your best guess on have certainly your guess is much better than mine, but what’s your best estimate as to when all this sort of plays out? And then just trying to get a good understanding of that.

Caroline Apovian: Yeah. Well what I’m seeing we have five doctors, three nurse practitioners, two PAs and RD in our medical practice obesity medicine. We saw 10,000 new patients last year. What’s coming via the decrease in bariatric surgery came from COVID first of all. The COVID numbers went down as you all know are starting to recover and but part of it is most I don’t see the decrease in bariatric surgery. I am seeing an increase. Well bariatric surgeons in my practice are telling me there’s a decrease, but it takes a while for that 10000 patients we saw last week just in the medical arm. We’ll get through the program. We have 4,500 patients on our waiting list just for medical treatment. They’re trying to get in and they have to wait eight months to one year.

You see one of our medical practice providers. Why is that? There aren’t enough obesity medicines specialist in the United States to the quell this is demand. Therefore, all the great new newshes that’s fantastic, but the primary care providers can’t — they don’t have the resources in your practices to prescribe. Because of the prior authorization headache, which requires new FTE just to process the prior obligations. And then they don’t know how to give the drug. They don’t know how to provide diet and exercise. So it’s a big — the primary care is just don’t have resource. So it’s relegated to obesity medicine specialist. There only 6,500, 7,000 obesity medicine specialists in the United States. So what I’m trying to say here is that we all have a backlog.

And once the patient gets in over the past six months what I have seen and my colleagues have seen is that we are able to get them in as a new patient and we give them the patients with a BMI over 40 or over 35. We’re looking them in the face and saying I know you want to go on Wegovy, I can’t give you Wegovy. There’s a shortage. Plus when the shortage is relieved. Yes I can give you Wegovy you realize you’re going to have to be on it for the rest of your life and you’re going to get a 16% weight loss. Or I guess I lost 15 pounds on Wegovy and I want to lose more. Your BMI 50. The way you’re going to lose more is bariatric surgery until I’m able with all of these patients because of a shortage because of the fact that they realize that they need to be on an injection for the rest of their life or because of they got weight loss.

And they got the 16% weight loss that Wegovy can give but not more, and in a patient needs to lose 100 to 150 pounds that’s not going to work. So I’m able now to convince the patient to get a consultation with one of our bariatric surgeons and we have 10 of them and they have appointments next week where is I have an eight months to 12 months waiting list.

Anthony Vendetti: Okay.

Caroline Apovian: All right. So what’s happening, but it’s good – yes, you’re right it’s going to take some time to get the patient through. On top of that we have the laparoscopic adjustable gastric band. I have always wanted to combine the Lap-Band with a GLP-1 and now a news because now we have Zepbound and we have double duals and triples coming down the pike. Because then you get the restriction of the Lap-Band with the change in gut hormone [indiscernible] with the multitude of new shows that are coming down the pike. So this is going to provide a less, let’s say, less aggressive form of surgery with a medication that can hopefully achieve weight losses of more than 20% or more than 25%.

Anthony Vendetti: That’s very helpful. So, in the situations where they want to lose — the patient’s goal is to lose more than 16% or 20%, do you — how often do you recommend bariatric surgery versus the Lap-Band with the GLP-1? And are there instances right now where you’re just recommending the Lap-Band without the GLP and then you can do the GLP-1 later. I’m just wondering how are you right now guiding or advising your patients?

Caroline Apovian: It runs the gamut. Because what you need to understand about our center is we have bariatric surgery, but we also have bariatric endoscopy with Chris Thompson, the world leader in endoscopic devices and procedures. So, — but within bariatric endoscopy, we are definitely — and with bariatric surgery, we’re definitely adding GLP-1 to both of endoscopic and bariatric surgery procedures. What we are what — and the Lap-Band. What I do recommend initially is if you’re going for bariatric surgery uses a sleeve gastrectomy or the electrostatic adjustable band and certainly not — or even the endoscopic procedures, we don’t add a new right away. We wanted — because we don’t want to get excessive weight loss because you’re going to lose muscle and fat.

You lose muscle and fat anyway especially with the more aggressive bariatric surgery procedures like the bypass even the sleeve. The sleeve the bypass and the [Indiscernible] diversion, you’re losing almost half muscle. Because you’re losing it so fast. You don’t want to do that that causes sarcopenia and a lower resting energy expenditure and it’s there. And those patients don’t do well what you want to do is get a good amount of weight loss with one procedure if you’re going to use the procedure. And then when you plateau — either plateau or you don’t lose as much as you want it, which is often the case or you do great, but then a year later you regain some weight then you add the news. Okay. So, you don’t want to do anything at once.

Paul Hickey: Anthony, this is Paul and Dr. Apovian, thank you for that — all the answers you provided. I wanted to add one more point. Maybe you can add to it as well. When — in terms of the numbers of people that you’re saying just kind of reminding and I know we’ve talked about this before where there’s as mentioned during the call, there’s only 1% of the people that in prior years, decades, 1% that could have surgery — are seeking out surgery. And our belief is and I think that’s what Dr. Apovian was a firming that there’s more people now beyond that 1% that are seeking care, specific with the GLP-1 being as popular with the big marketing push from big pharma. And then it’s the timing I know that I love to have an answer to right, but the timing for nationwide on average centers that are unlike Brigham and Women’s and the Center of Excellence that Dr. Apovian has formed over the years I’m sure has ways of managing their timetable that are completely different across the board.