George Sellers: Okay. Great. Thank you all again for the time.
Nick Colangelo: All right. Thank you.
Joe Mara: Thanks, George.
Operator: Thank you. One moment for our next question. Our next question comes from Jeffrey Cohen with Ladenburg. Please go ahead.
Jeffrey Cohen: Hi, Nick and Joe. How are you?
Nick Colangelo: Great. Well.
Joe Mara: Good, Jeff.
Jeffrey Cohen: A couple of quick ones from our end. So, when you talk about MACI Arthro and the surgeon population expanding out from 5,000 to 7,000, how do we equate that or think about the overall TAM as there’s certainly some other levers out there? Is that a 40% greater TAM or what might we think?
Nick Colangelo: Yeah. So as we talked about previously when you look at our 60,000 patient TAM clearly MACI’s a go-to product in patella and larger defects on the femoral condyle or other areas of the knee. We do get business on these 2 to 4 square centimeter defects in the femoral condyle, but just our penetration rate there is lower and we think MACI arthroscopic will allow us to have deeper penetration there. So, for MACI Arthro, it’s really about sort of deeper penetration into the existing addressable market of $3 billion plus. The TAM expansion for MACI occurs when you move to other joints and that’s where MACI ankle comes into play. And as I mentioned in my prepared remarks, that’s about a$1 billion addressable market opportunity for us with around 20,000 eligible patients per year.
Jeffrey Cohen: Okay. Got it. And then, lastly, first, could you talk about cash a little bit? You had a strong Q4 with $10 million of free cash flow. Any thoughts on cash? I know that some portion of that would be for the facility, but any thoughts there?
Joe Mara: Yeah. So I think we talked about a pretty strong year from kind of a cash flow perspective. I think it was great to end the year at a higher place than we started, even as we started funding the building. I think as I talked about the prepared remarks, I mean, this is more the year where you’re going to see some more substantial kind of capital or cash kind of allocated to our new building, but we also expect to continue to generate kind of new cash — additional cash and sort of self-fund that. So that’s probably the key dynamic, I would say, as you think about the cash flow in 2024.
Jeffrey Cohen: Okay. Perfect. That does it for us. Thanks for the questions.
Joe Mara: Thank you.
Nick Colangelo: Thanks, Jeff.
Operator: Thank you. One moment for our next question. Our next question comes from Swayampakula Ramakanth with HCW. Please go ahead.
Swayampakula Ramakanth: Thank you. Good morning, Nick and Joe. Most of my questions have been answered, but I just have a quick question regarding how to think through NexoBrid, not just over 2024, but even beyond. Just like what we had seen with Epicel, I remember even about a year, year and a half ago, you folks were not quite sure how to talk through the dynamics of Epicel, but now you’re able to give guidance for the year. And also I listened to what Joe had talked about special centers and specialty centers and how the product moves through it. So should we expect similar dynamics or since you have had some learnings with how to commercialize Epicel, NexoBrid probably will get to a decent dynamics earlier than what you had experienced with Epicel?
Nick Colangelo: Yeah. Hey, RK. I’ll try to parse that out and just the variability that we had seen — have seen historically with Epicel is really just a matter of a smaller patient population that you’re typically treating, right? So, if you have a few more or less treatments per year when the average treatment is pretty significant in terms of revenue it can bounce around a little bit and that’s why we kind of historically said before, again, COVID sort of disruptions that starting out high single-digit or low-double digits for Epicel is usually safe ground and we typically outperformed that. So, it’s really kind of reverting back to kind of what we did previously. With NexoBrid, of course, you’re really sort of playing more at the top of the addressable market funnel where there’s multiple times more patients, 30,000 we believe out of 40,000 hospitalized patients each year are eligible for NexoBrid treatment.
And so, yeah, once you get through, as Joe was talking, sort of the initial dynamics around specialty distributor stocking, hospital stocking, you have kind of a more mature customer base that has more kind of normalized or routine treatment protocols, then you kind of — we would expect, as we’ve said for a long time, that it will help dampen any variability that you would see with Epicel as NexoBrid kind of revenues grow over time. So, nothing has changed in terms of our belief on how that will play out and sort of our excitement around NexoBrid.
Swayampakula Ramakanth: Thank you. One quick question. So, do you think you have better leading indicators with NexoBrid than obviously it’s difficult to do that with Epicel, but is NexoBrid in a better place in that sense?
Nick Colangelo: Yeah. Well, again, yes. The answer is definitely yes. Because, again, as we kind of get into sort of, you can kind of think about we have a certain number of centers, right, 140 burn centers. We’ve got certain tiered targeting of those. As you onboard those, they get P&T committee approvals and then they start to make their initial order and you see penetration into the patients that they see. You’ll see sort of routine or more routine reordering patterns. And we’re just so early in this right now that those patterns haven’t emerged yet, but once they do, we certainly will have sort of more visibility in terms of forecasting as we go out.
