AOTI, Inc. (AOTI.L) 2026-09-30 Earnings Call Transcript

Morning, and welcome to the AOTI half-year results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time using the Q&A tab situated on the right corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll. I would now like to hand you over to CEO Mike Griffiths. Good afternoon.

Yes, good afternoon. Thank you for joining us here. I am Mike Griffiths, and here is our CFO, Jayesh Pankhania, and we are going to be walking you through our mid-year presentation here.

Morning, everyone.

Morning. Still work to the day now. Making lunch. We will walk you through. This really is a transformational growth year for the company. To remind everybody, we have a unique multi-modality therapy called TWO2, Topical Wound Oxygen, and we are already the leader in the topical oxygen space. It is differentiated by not only its clinical utility, but also the fact it delivers longer, more durable healing of chronic wounds, which has significant cost and health economic benefits as well. We already are generating significant early revenues with strong profitable growth in the sectors that we are in. The most transformational news for the company is the impending Centers for Medicare & Medicaid Services, which is the Centers for Medicare & Medicaid Services in the U.S., coverage for the therapy, which was announced as a provisional Local Coverage Determination in July of this year, which is now in a final process that will complete by July of next year. Our existing commercial infrastructure, we have been honing and making adjustments to such that we can maximize our footprint and improve our best practices to attain as much operational leverage as possible across the different segments we are able to do business in today, which will also prepare ourselves well for when this broader coverage is in play. We are also unique in the fact that we are building an outcome-based at-home category within the advanced wound care space. It is a unique thing with us that allows us to deliver and engage with patients, prescribers, and other stakeholders, including payers, so that everything that we do in the patient's home, it demonstrates the same durable healing outcomes that we have shown through our extensive clinical trials. Jumping to the numbers here and the performance, Jayesh will get into this in more detail in a second. We saw robust underlying profitable revenue growth of nearly 19%, well ahead of our peers in the advanced wound care space. Remember, this is in the face of quite turbulent times in the U.S., particularly in the wound care space over this last year. We have gone through a number of organizational and operational changes to hone our sales structure and optimize our go-to business practices, which are still in the process of being completed, that will not only improve our sales performance in the short term, but will prepare ourselves for the future that is coming with this broader coverage. As I mentioned earlier, actually at the end of the period, but in July, Centers for Medicare & Medicaid Services published the long-awaited coverage determination, which was saying that topical oxygen is reasonable and necessary for treating Medicare patients. Medicare are the patients that are over 65, the elderly population, which as you can imagine, have a broader prevalence of chronic disease. So a significant milestone, and now it is working through that process to a final coverage determination and availing ourselves to bill patients. We continue with our market access progress, not only in the restructuring of the sales organization and honing our best practices, but also in increasing the number of states where we have Medicaid Provider IDs. Unlike Medicare, Medicaid is the federal government programs for low income and for people with disabilities and has actually more enrolled lives, close to 80 million enrolled lives compared to Medicare. Again, we keep expanding into that sector so we can avail ourselves as those opportunities open, and it is a state-by-state administered program. Last but not least, our evidence base, which is second to none in demonstrating sustainable, durable outcomes, has been bolstered by a very large real-world study of over 3,000 patients that demonstrated across all our extremity wounds, diabetic foot ulcers, venous leg ulcers, arterial wounds, et cetera, very consistent, not only healing the non-healing wounds, but durable healing with significant reductions in reoccurrence over greater than 12 months. Again, we have an evidence base second to none, and the differentiated message clinically second to none. If we go to the business overview of where we stand, I just want to remind people a little bit about the opportunity. In the U.S. particularly, but it is like this in most countries, the way healthcare is being delivered is by delivering economics associated with activity. You provide services, and you get paid for providing services to treat patients or treat diseases. In the U.S., they refer to that historically as fee for service. You get paid for what you do, and sadly, in some cases, you get paid for the more you do. This has helped drive the spiraling costs of the U.S. healthcare system, which are in excess of $5 trillion a year spent on healthcare, which is around the same as the GDP of Germany and more than 25% more than the GDP of the United Kingdom. So huge amounts spent on healthcare, and 90% of those costs goes to managing patients with chronic disease. So there is an enormous burden that is getting bigger and quite honestly is unsustainable. The shift is what people want to move towards is outcome-driven economics or outcome-given care. You get paid for delivering better outcomes to patients and obviously, hopefully likewise to payers, and you can reduce that health burden. We are uniquely positioned because we are, as AOTI, establishing an at-home platform that allows us to deliver these outcomes, and it is based around three very distinct pillars. The first is our unique differentiated Topical Wound Oxygen therapy, where we are delivering durable synergistic healing, with evidence second to none that shows not only durability and a reduction in reoccurrence and resources, but consequently significant reduction in costs. We are also unique in the fact that we are an accredited home care provider. When our therapy is ordered, we manage the patients, set them up at home. So we control the value chain all the way to the patients at home. Then the last component of that, which is key to our ability to scale, is our Eyes on the Wound platform that allows us then, with data analytics and AI-driven technology, to engage more actively and proactively with patients and provide reports and information back to prescribers and to payers so that we can demonstrate on every patient what is written on the tin we deliver. So when we show these durable outcomes in studies, it is not just academic. We deliver on every patient and can really deliver then that value proposition back. This creates enormous strategic advantage, but also incredible barriers of entries to others trying to follow. So what is the size of the market predominantly here in the U.S.? Now, if we look at a bottom-up analysis based on real claims, today our serviceable obtainable market, prior to us being able to build a broader Medicare and other associated coverage, is focused on two sectors, the Department of Veterans Affairs nationwide in the U.S., and New York State Medicaid. The Medicaid portion, as I said, is the low income and disabled people, which get covered by government healthcare. If you look at that accounts for, we estimate conservatively from a bottom-up, difficult to heal lower extremity wounds, about 28,000 wounds. We have around 6,000 wounds, so less than 20% penetrated. It is a $400 million opportunity that we have tons of upsides. Us honing improving our performance and execution in those sectors has lots of upside to grow in the short term and near term. With the decision now for Medicare to deem topical oxygen reasonable necessary, and the process of that coverage determination to complete and flush through the systems, this will open up not just Medicare, but all other payer sectors, and we believe will drive that then to an addressable market of about 1.8 million wounds or a 65-fold increase. This is why it is transformative. It is an enormous multiplier of opportunity that we can then take advantage of. Also, quite uniquely, we took a very phased approach to go to market in the U.S. Rather than wait until we have broader traditional Medicare coverage, which a lot of companies would do, we focused in on the Department of Veterans Affairs and New York State Medicaid first, where we have been able to get reasonable traction, as I said, just under 20% penetration today, so plenty of upside. What we have then been working on as our market access is expanding into more state Medicaid, remember, the lower income portions, which can make decisions on their own in the state level prior to Medicare making nationwide decisions for the over 65 population. We were getting good progress and traction there, and this is where we have seen significant headwinds from the One Big Beautiful Bill Act and the administration's focus on ratcheting down support for Medicaid. Again, still part of our strategy, but certainly an area that has been constrained somewhat to date. With the news now of CMS coverage determination coming into play, which as we said, statutorily has to complete as a final LCD by July 23rd of next year, this will now open up access to not just the Medicare, the over 65, where there is the most prevalence of chronic wounds, but will also is used as a bellwether for all other payer groups and will help improve access to not just Medicaids, but commercial and other payers in the U.S. system as well. It really is a transformative part of our strategy. This sort of articulates a little bit the process and the timeline of where we are. The process is the Centers for Medicare & Medicaid Services published a proposed Local Coverage Determination, and it says local, but it is all four of the regional local carriers publishing together, so effectively is national coverage. It then went into a 45 days statutory public comment period. As part of that, there was an open public comment meeting where there was universal support for the coverage determinations, a very, very positive support indicating that they should move forward. They now have, as I said, statutorily a year from the date of that publication to finalize the Local Coverage Determination. There is another mandatory waiting period before the code becomes effective and billable. Obviously, in the background during this period and potentially afterwards, they will be deciding on what level of payment, they will deciding on how to flush it through as it goes into the fee schedule, et cetera. There is work that goes on, and obviously, we will be working with our advocacy teams to maximize our input to support that process in the background. Again, a very clear definable timeline to broad and more nationwide access. As we continue obviously to work in the background on market access, our focus is honing our commercial execution in the sectors today that we said that we have clear coverage policy, which is the Department of Veterans Affairs, and particularly New York and New Jersey Medicaid. As we have announced before, we have made a number of changes to our sales and our commercial team structure. One of them has been is to take what were sector-specific sales teams, either focused on the VA or focused on Medicaid, and make it more geographic so they can focus on all the business that they can avail themselves to, be it Department of Veterans Affairs, be it commercial, Medicaid, et cetera, in their territories. Honing then the best practices from our best performing reps so that we can improve productivity. By productivity, we mean the number of patients each rep has on being serviced with our therapy every month. We know that if we can improve productivity of our lesser performing reps either more to the medium, which will move the medium up closer to our higher performing reps, obviously those productivity improvements will drop to the bottom line now, but will set ourselves up well with the same prescribers that we want to have ordering our therapy when Medicare comes along, because it allows us to broaden our call points to those same prescribers. As I mentioned earlier, part of our platform, our Eyes on the Wound platform, is a technological platform that allows us to manage engagements with patients to guarantee we deliver the outcomes, but also to demonstrate with data analytics that we deliver those outcomes to both the prescribers so they see progress, but also to the payers that want to make sure that if you are doing things in the home care environment, patients are using it, so it is effective. This slide is really to sort of demonstrate based on just percentages of the population how much these different segments mean in the U.S. If you look at where we are today, we are in the Department of Veterans Affairs and New York Medicaid. If you look by population, that is less than 5% of the U.S. population. It is already a $400 million opportunity. With Medicaid, as we've been expanding more and more and now have 27 Medicaid states, we have the potential to grow significantly in that sector. With the Medicare predicate, we expect that now progressively to improve our access to Medicaid states. Then if you look at Medicare is split between what they call fee for service, is where the federal government you bill and they pay you directly, or Medicare Advantage, which are managed care insurers that manage those patients for the government. It's not 50/50, but it's close to 50/50. You can see we are looking at then when we will have access to those populations staged over time. Last but not least, there's also a commercial sector, which is regular insurers managing people predominantly that are working for companies which have a lower proportion of chronic disease, but not none, because it's a large number of patients. So over time, the Medicare coverage decision will progressively allow us to open up more and more of these sectors, and they will then come in, as you can see. We've tried to illustrate that going out from 2030 onwards, we should have access to pretty much all of these sectors to drive the business. We won't be playing in 5% of the U.S. market, we'll be playing in 100% of the U.S. market. As I mentioned earlier, we have a sales infrastructure that used to be sector specific that's now geographic. They're focused on in the geographies. You can see how they're distributed across the U.S., and it allows us to have some presence in about 27 states, which is consistent with the Medicaid Provider IDs. That touches about 80 odd percent of the U.S. population, the majority of the U.S. population. So we are able, if we can hone our practices and bring along prescribers in those different states with the current patient mix that we can service, those prescribers also then have Medicare patients. Such when Medicare is available to be billed, they are able to give us those Medicare patients because they have seen the outcomes and believe in the therapy. So all the work we do now and the honing of our best practices doesn't have just an immediate effect on performance and productivity and obviously margins, but it will really pay dividends as we expand with broader Medicare coverage. Just to finish off here, this is an illustration of what does this really mean. The only other sort of analogy we have in the wound care space was KCI, who were the developers and the introducers of negative pressure wound therapy back in the late '90s, early 2000s. Then in end of 2000, they received their Medicare coverage. As you can see from that then was quite exponential and explosive growth from that point. Such within five years they took themselves to effectively a billion-dollar company and this product line then sort of teed up just under $1.5 billion. Here we are now to give you some idea. If you do it the right way, if you have therapies that are effective and we have far more barriers to entry with our outcome base and home approach than they had, you can establish not only a very large business, but they have maintained that dominant position and that size of business even today, which is 26 years later, 25 years later, they are still the dominant player with a close to $1.5 billion product line around negative pressure. Again, give you some idea of what the potential is if we do execute effectively. Now I am going to pass it over to Jayesh as he is going to walk you through the financials.

Thanks, Mike, and good afternoon, everyone. I want to leave you with three key messages from this slide. We have had robust underlying growth of around 18.8%. Underlying means excluding our Arizona Medicaid segment, which we have ceased taking on new patients, and I will come onto that in a little bit more detail. We have also had positive operating cash flow and improving net debt. We have improved our EBITDA margins. Just to say on the revenue side, our reported growth was still very good at 10.8% and was driven by VA and Medicaid. Our EBITDA grew 16.6% to $3.6 million, and our margin improved by 50 basis points to 10.1%. That is driven by our revenue growth and our sales rep productivity that Mike talked about earlier. Also changes to the commission scheme to really drive the right behaviors and drive that top line offset by investments to support future growth activities. On the operating cash flow side, we saw positive operating cash flow of $0.9 million, which is an improvement from the same period last year, which was a $4.7 million cash outflow. That was driven by strong VA performance, which is paid on the provision of service, so almost cash straight away. Improved working capital in the form of better DSO and deferring inventory purchases into the second half, but also ceasing taking on new patients in Arizona from 1st of April 2026. Arizona is a Medicaid state that we have been unable to collect our billed revenue. I will come onto that in a bit more detail later on in the deck. Our net debt saw a slight improvement from the end of the year by $0.2 million to $6.3 million. Our cash is remaining relatively stable and that is all due to the improved VA performance and working capital I mentioned earlier. Cash at June was $13.8 million, compared to the year end of $13.4 million. In terms of the components of the underlying growth, the biggest contributor to growth is our VA business, which grew 16% and contributed $2.8 million of growth. That was driven by our commercial restructure, which has shown improvements in productivity since the same period last year, but also the impact of DOGE we have seen abating as well. The business is getting back to historical levels of growth. The second largest area of growth was our Medicaid business, which is primarily driven by New York and New Jersey Medicaid. That sector grew 21.5%, but our expansion plans are still hampered by the U.S. healthcare headwinds and the One Big Beautiful Bill Act. We're trying to get coverage in new states. It's taking much longer than we previously experienced. Our other segment, which is a non-material segment, has contributed about $0.3 million to growth, and that primarily came from the U.S. commercial segment. In terms of profitability, as I mentioned earlier, our EBITDA was $3.6 million at a 10.1% margin. You can see that improvement has been primarily driven by revenue growth and improved gross margins. Our gross margins improved by 1.1%, and there was two main reasons for that. The first is that we are much more efficient at using our fleet of controllers and concentrators to deliver the service to the patients, but also better utilization of our consumable stock as well. The new commission plan contributed a bit to improving EBITDA as some reps missed their quotas. In the new plan, if you miss your quota, you don't get the full commission rate that you would otherwise get. That's offset by primarily investments to support growth in the future. These are investments that'll help us drive that top line once we get that CMS market access, and that flushes out to the rest of the market. Those investments are investments in headcount either in the sales rep community, but also areas to support sales rep and billing activities and things like that. Also other items like marketing and market access and product evaluations. I think one of the important observations on this slide is that you can see the operating leverage that we're going to get. If you weren't making those investments in growth, you could see that our profitability could be up to 20% rather than 10%. As we scale, we should be seeing our profitability improve along those lines. In terms of cash flow and net debt, I've mentioned before we had strong operating cash flow due to VA performance, improved working capital, and ceasing the treatment of new patients in Arizona. We also had a lower capital expenditure than we had expected because of our more efficient utilization of our fleet of rental units. The primary item on capital purchases there is our Eyes on the Wound development. Then we have a small accrual on our exit fee for our loan, which forms part of the reconciliation. Just talking about Arizona, for those of you who aren't aware, we've been in discussions with Arizona State Medicaid and Arizona insurers where we have not received payment for treatment of patients due to a whole load of reasons that are impacting Arizona Medicaid, which have been caught up by cyber breaches, Medicaid insurer turbulence, and CTP fraud, and multiple Medicaid director changes. We took the difficult decision on the 1st of April to cease the treatment of new patients from Arizona Medicaid. That helps to not have more of a working capital buildup and helps our cash position going forward. I just want to say that we're working closely with the Arizona State Medicaid Agency for formal coverage policy for our therapy and to recover the historical claims going forward, and we're confident in collecting that historical debt. Consequently, as a result of ceasing to take on new patients in Arizona Medicaid, we reached an agreement in September to revise our revenue and EBITDA covenants of our Rodeo loan just to prudently bring them down because we're no longer going to get revenues from Arizona going forward. Then finally, for the outlook for the rest of the year, I just wanted to say that 2026 is a transformative year for us. We received the draft LCD from CMS, and we're expecting as well we're going to move towards the final LCD within the 365-day period. That'll really open up the market for us, as Mike mentioned. We've also been optimizing our sales structure to deliver the full potential of that market opportunity. For the full year, we're expecting our 2026 EBITDA to be in line with current consensus, which is $6.8 million as at 29th of September. We're confident with our net debt and cash outlook for the full year. We're expecting to continue our top-line growth in line with our guidance set at the time of our FY 2025 results. That's underlying mid-teens growth excluding Arizona Medicaid or low single-digit growth on a reported basis. I'll now hand back to Mike just to say some closing comments.

Thanks, Jayesh. Just to summarize, this is a very exciting time for the company. The long-awaited and the transformative or transformational growth driver, which is the broader Medicare coverage and what that does not only to avail ourselves to the Medicare, the over 65 population, but also opening up access to broader other payer groups like the Medicaid and commercial payer insurers, as it's used as a gatekeeper, means this opportunity grows exponentially, 65-plus fold in the coming few years as that finalizes and flushes through the system. What we are doing is honing our ability to do business and evolving and rolling out technology in our Eyes on the Wound platform to maximize our ability to proactively engage with patients, to interact with digital architecture back to the patient records, and to demonstrate to both payers and clinicians that when we deliver durable outcomes in studies, we actually do that in the real world, and those true clinical and cost-saving benefits are really realized on every patient. This separates us apart from other players in the space and opened up enormous opportunity as we're in the patient's home to help manage their comorbid conditions in the future. With that, I think we will finish the presentation, and we will go to the Q&A.

That's great. Thank you very much indeed for your presentation. Let me just turn on your cameras back up. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your Master dashboard. Mike, Jayesh, if I may now just hand back to you to take us through the Q&A, and I'll pick up from you both at the end. Thank you.

There was a question regarding what Medicare is going to pay for the therapy. I think a very valid question. It highlights that we're currently, if you look at where we are today, we're reimbursed under Federal Supply Schedule contract in the Department of Veterans Affairs around $3,000, $3,100 per month for the therapy. That really acts as a backstop because that is most favored nation pricing, and Medicare usually will not go there, and they certainly can't go below there. That's a backstop. In every other sector, including the significant business we have in New York and have had in Arizona and certainly have still in New Jersey and other states, Medicaids, with managed care insurers, with the commercial contracts we have and business with Cigna, and now beginning with Blue Cross Blue Shield, I'm up in the Northeast. Our reimbursement is nearly always around double or more than that. Obviously what we will be advocating for in the process through various channels is reimbursement consistent with the prevailing rates in the marketplace, and our expectation it will be somewhere between the VA price and that price, but that has yet to be determined, and as you can see, that's part of what will happen between now and the finalization of the LCD. Regarding fee for service and insurance, generally the pricing will be consistent across because once Medicare sets a fee schedule price, then the insurers follow that. They don't have to follow it for the commercial sectors and other sectors, but certainly they would for Medicare. It also sets a precedent that Medicaid states may or may not follow at their discretion. Okay. It was, what is the maximum patients rep we can sync to? We're saying it's currently, I think on the highlight here, around 20. That's our average patients per rep. We think that that has the ability to stress significantly. If we look at our highest performing reps, they are producing as much as five times as many as that, and obviously we don't expect everybody's going to be as good as the best. But we certainly believe the ability to drive the average and potentially double that in the future, it won't happen overnight, is very reasonable, and that is without Medicare. This is our underlying performance in the current environment. Once broader coverage comes and, as you remember, most of these prescribers, the majority patients that they would have will be Medicare. If we do our job to deliver outcomes and prove the therapy's effectiveness to prescribers, those prescribers become, as we tend to refer to them, not necessarily adopters, but they become sticky prescribers that want to give you more patients. The majority of patients they generally have will be Medicare. When they're able to give you those patients, if they believe in the therapy, the likelihood they will, in which case, we could see a significant growth in productivity even due to that. We believe there's the ability to significantly compound the improvements in productivity from where they are today. The more we do today obviously have immediate effect on performance and what drops to the bottom line, and that will only, we believe, get better with a higher average reimbursement, but also with more patients per rep average moving up.

How superior is your therapy?

How superior is our therapy? When you look at our therapy, we demonstrate in both our randomized controlled trials and our real world data now, very large, 3,000-plus patients, that we not only heal, we heal 6 times more effectively than standard of care, which is certainly better than other adjunctive advanced wound care modalities. But we're the only one that can also demonstrate in both randomized trial and large real world data that we have as much as a sixfold reduction in reoccurrence over 12 months or longer, with over 80% reduction in hospitalizations and 70% reductions in amputations during that same time period. We're very unique in the fact that we can deliver these durable outcomes, and it's due to the multimodality, intermittent cyclical pressure approach that we have that's unique to us. Very differentiated from other topical oxygen therapies and other therapies in the wound care space.

There's a couple of questions on recovering receivables from Arizona. I think that, particularly around timing of recovery, it's really difficult to say timing. I think that we are confident of recovering that debt. It's a complex situation, and we're working with Arizona Medicaid to provide both coverage going forward, but also helping us to recover that debt as fast as we can.

Okay.

How do the reps ID the prospective patients?

The reps, we actually call our sales reps not sales reps, we call them wound care consultants, because we take a very consultative approach with the clinicians. So in the various types of call points, which can be wound care centers, whether at outpatient centers where patients are coming in to be treated for their wound, whether diabetic or vascular venous related, or in long-term care facilities or facilities where these patients reside with wounds. We work with the various caregivers, and there's a broad array of people associated with wounds from different types of surgeons to podiatrists to nurses and advanced nurse practitioners. We work with them for them to identify patients that they believe have failed to heal with standard care. If the patients are not progressing to healing with standard care, that's when advanced modalities are warranted, and that's certainly the criteria within CMS's coverage determination. Now they have a choice of what they can use. They can use negative pressure wound therapy, they could use skin substitutes, they can use full body, big chambered hyperbaric, or now, moving forward in Medicare, like in other sectors, they can use our therapy. They would then decide to order the therapy. So what we do is we engage with those prescribers. As you can imagine, you get a new prescriber, a new clinic, and they give you a couple of patients to test you out. It's our job to demonstrate those outcomes and performance on those patients. If we do our job right, the patients heal, the clinicians are usually astounded by the progress and the durability of healing, which means they want to give you more patients, and it grows from there. That is how you take someone who is new to the therapy, make them a doctor, and then demonstrate to them what the therapy and what the company can do, and then they become the sticky prescriber that wants to give you more patients.

You want to talk about the value?

Yes. So there was a question regarding the value-based trial that we announced. So this is our state-of-the-art RCT of the same quality as we did on DFUs for venous leg ulcers, which are another indication. Now, want to make it clear from a regulatory, both CE mark and MDR and also FDA regulatory clearance, we are clear to treat any acute and chronic wound. So we are not earmarked just for diabetic foot ulcers, although that is a lot of focus. Venous leg ulcers, we treat many of, probably as much as 15% of the patients we treat have venous leg ulcers today in the U.S. We also have very strong evidence. We have controlled studies looking at venous leg ulcers and showing significant healing and reductions of pain and durability of healing. The very recent study we mentioned, that 3,100 patient study, real-world study, had in it 660-odd venous ulcers as well. One of the largest studies done in venous ulcers ever, demonstrating the same durable healing efficacy. But we are to have evidence of the same quality, the same double-blinded placebo-controlled randomized style, conducting what we call the VALUES study, which is looking at the same outcomes of venous ulcers. Where it sits at the moment, we are still in the validation stage of the protocol. So we have a limited number of key opinion leader sites where we are fine-tuning the protocol and the delivery of it. And our expectation is to expand sites aggressively across 27 so that we can then complete that study and get broader coverage indications with CMS moving forward that will widen the opportunity for the business even further.

Okay.

So what percentage of patients fail standard therapy? If you look at DFUs, and if you look at our analysis of the market opportunity, the significant amount of data out there shows that at least 40% of diabetic foot ulcers do not heal with standard care. That is how we have calculated our market SOMs and SAM numbers on. Not taking all patients, taking the difficult ones. Now, the reality is, out of the wounds that heal with standard care or even advanced care, 40% of them reoccur again at 1 year, and 65% of them reoccur within 5 years. So the way they are being healed at the moment does not produce good quality tissue, does not produce better blood supply. So even though you heal them, they tend to break down and off to the races you go again. It is a reoccurring circle of suffering and cost and resource utilization. What is unique about ours, we not only heal them six times more effectively, but we heal them in a way with better generating quality collagen and tissue, more blood supply feeding it, blood vessels feeding it. So it is more sustainable, it is more durable, hence the lower reoccurrences that we see. If you see 40%-60% over 5 years, we are showing reoccurrence rates in the low single-digit percents with our therapy over 12 months and longer.

That is great, Mike. Jayesh, if I may just jump back in there and thank you for addressing all those questions from investors today. But Mike, before I redirect investors to provide you with their feedback, which I know is particularly important to yourself and the company, could I please just ask you for a few closing comments?

Yeah. I think for people to understand it, the wound care space is quite complex. It has been sadly had lots of challenging issues and certainly a lot of focus on it from abuse and use in the U.S. from various approaches that have been applied. We are very different to that. We are a company based on evidence, and we are differentiated by the fact we deliver long-term outcomes, and we not only do it in clinical trials, but we have a platform and a process that allows us to do that with every patient, every day. So we differentiate ourselves clinically and in the way we do our business and the outcomes that we deliver to the system. With the broader coverage now in process with the Medicare coverage determination that's being published, as it completes itself, the opportunity now expands 65-fold from what it was prior to that, and it's just a process of time for it to open us and us being able to execute against that. So it's very exciting times for the company, and we're delighted in the progress that we've been making.

Fantastic. Thank you once again for updating investors today. Could I please ask investors now to close this session, as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you all.