Photocure ASA
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Photocure ASA
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All right. Well, welcome, everyone. Good afternoon to those in the room. Good morning to those calling from overseas. Welcome to Photocure's Second Quarter 2022 results. I'm Dan Schneider, President and CEO. With me today is Rich is Erik Dahl, our CFO. A reminder that the usual disclaimers are in place for today's presentation.
All right. So the highlights, 12% revenue growth, 9% unit growth and our highest quarter and our highest month of June in the history of Photocure. I'm actually quite proud of that, given some of the challenges we face between the remnants of COVID in terms of staffing shortages and access as well as the delay in the Karl Storz launch, which we announced a couple of weeks ago. Overall, I think it was a very good results. EBITDA, positive NOK 1.4 million.
We continue to invest. We time our investments with the returns. We were not able to go live with the Karl Storz launch that some of the spend wasn't -- didn't make sense, we maintained a positive EBITDA. Studies and publications, as everyone knows, we have multiple sources of data coming in from us. We have a Nordic registry on flexible cystoscopy. We have a U.S. registry on just Blue Light in general, which is growing about 2,500 patients, around 500 - 600 patients in the Nordic registry. This one was out of the Danish registry, which isn't necessarily a Photocure registry, but it does collect a lot of good data.
There are over 10,000 patients collected to date. And this publication in its summary was basically saying they're the definite advantage of using Blue Light. Those that use it more, we'll see even greater results, greater outcomes. This was presented at [indiscernible], which is a Scandic Urologic Conference that was held in Helsinki and it was met with good reviews. On the partnership activities, yesterday we've had a lot of activity recently.
Yesterday, we announced that Acerus had enrolled their final patient in the Phase III trial. This is over 2 months ahead of schedule despite the COVID challenges in the EU and China, they were able to get the last patient in fact, a little tidbit. This patient actually had shown up a couple of weeks ago, but it was tested positive for COVID was turned away and had to come back the other day. So COVID still has its effect throughout everything that we do in the business.
But so far, if the results are good, there will be no further data needed. The intended time line on this, and Acerus has not officially put the time line out, but we believe that they will -- these patients will follow 6 months post treatment. There will be additional 6 months that they'll follow them even further as sort of an add-on piece. We believe they'll pool the data sometime mid-2023 and hopefully be able to submit to the Chinese FDA if everything looks good by the end of '23 with an approval sometime in late '24 -- and probably launch in sometime in either late '24 or early '25. I also announced on a smaller scale, an agreement with Israel. This is our first entry into the Middle East with a company called IGL Medtech.
There were around 4,500 to 6,000 TRBTs in Israel. We believe working with this partner, we believe we can actually have live product and start seeing patients by first quarter of next year. So this is a good development, and we'll continue to look for other opportunities throughout the world. On segment trends, I mean, I think it goes without saying COVID, while most of us don't see it day- to-day, it still exists, especially manifests itself in the looks of sickness and turnovers and things of that sort, either HCPs not being able to make work, HCPs being health care professionals, nurses who are doing the procedures or doing the installations may not have shown up to work that would postpone a procedure or change it.
So it continues to sort of affect us. The one thing that is beginning to resolve is the staffing shortages. They're not 100%, but they continue to evolve and get better and better as we've gone through the year. So that's the good news on COVID. All of this pending , and this was a warning coming from one of my board members who is a urologic oncologist. What we see today, 80% of the world lives is in the Northern Hemisphere, where in the summer months. We don't know what the winter months have in store for us. So we hope that COVID behind us for good, but we maintain a careful eye to it.
From a trend perspective, I said, June was our best month. Best quarter ever in the U.S. We had in our history -- in EU, we had a price increase in Germany of roughly 6%. Part of EU pricing is about optimizing the pricing. It's not a year-in, year-out increase. This was an opportunity in Germany. The last time there was a price increase in Germany it was over 6 years ago. And going through the analysis, we realized that the German market could sustain a 6% plus increase in price. So we did make that announcement in June. The German market hospitals, there was a few hospitals that did stock-in, in June, and they continue to stock-in, in July.
But overall, we believe we're in a good place in Europe as well. The organic growth, so outside of the price increase and a little bit of the stocking, there still was positive organic growth in Europe, and we look for that to continue to increase and improve. Trends in North America, as I mentioned, we had our highest month ever and the highest quarter in June. Karl Storz postponed, but we believe the launch what they promised to this point is that the launch will take place in September of their new system. They'll start, as I mentioned in the past, with replacing the 30 obsolete protection plan accounts.
These are folks who bought the machines in the last 24 months with the intention of having those swapped out for the new machines. They are approximately 30 of those accounts. Those are in the first order of business to get swapped out. Behind them will be new accounts. We have a highly robust queue of new accounts wanting to bring Blue Light but withheld for -- well, either with help because they want to wait for the new machinery or secondly, the old machinery is not available any longer so they have to wait for the new machinery. So we have a very robust pipeline there.
And then the third order of business is of the 200-and-some-odd accounts out there that haven't either an OPP or otherwise getting them converted over as well over due time. So that's really exciting, and we're looking forward to that launch in September. On the Flex surveillance side, it's continuing to grow importance, both in the U.S. and incidentally in the EU. Now in the EU, we do not have a Flex system available, and we're working on that. Karl Storz did not file the MDR, so there is no flexible cystoscopy of systems available in Europe.
However, in the U.S., we do have the current system. There continues to be a growing interest in Flex, particularly on the heels of COVID, where access to ORs or patients was getting limited. They found the advantage of using Blue Light Cystoscopy in their offices, doing biopsies in small lower-grade full rations. So we believe that this is going to continue to grow, and we're happy with the trend there as well. On these placements, we placed 5 Flex. It's been fairly consistent over the last several quarters. We believe that's going to continue going forward. We've had no placement on the rigid because there is no inventory at Karl Storz in the old equipment. The new equipment, there'll be plenty of inventory.
And I was asked the question recently. Will this be a drip launch or full-on launch? And the answer to that, it's a full-on launch. They have built the inventory. I've seen the data, the reports. They're waiting for a final shipment, one component from Germany that's landing and maybe landed this week. Once that hits, they have plenty of inventory to carry the OPP and the new accounts that we have currently queued up. So we're in a good place there. Flex growing at 38% year-over-year. And in fact, 30% of the placements or more are coming out of the Flex market.
Trends in Europe. I'm actually pretty happy with Europe. When you think about Europe, think about it in terms of, I guess, boulders. You have Italy, U.K. and France, boulders that are moving down a hill and they have been moving downhill, and I'll show this in the next slide coming up. Business is going in the wrong direction. You have Germany that's sitting flat to slightly slowed up and going down as well. We picked up that business in the height of COVID in the fall of 2020, built our sales organization, didn't have all the relationships, KOLs had abandoned us, equipment manufacturers had walked away from us. That has all changed. In the short order in the last 18 months, we've been able to reinvigorate this market.
KOLs are submitting ITT. So they're submitting interest in doing studies on Blue Light technology throughout all the countries of Europe. We have the capital equipment manufacturer, specifically Karl Storz upgrading their system, but also Olympus is announced that they also want to upgrade their system and they expect their system be ready in the first half of next year. This is a remarkable change. If you think about Olympus, they had abandoned Blue Light, and we're pushing NBI in the past. They have now decided, no, no. The customers want Blue Light. Blue Light is the better technology, and we need to upgrade our system on [ St. Par's Richard Wolfin ] Karl Storz.
So 2 new technologies being launched Karl Storz later this year and Olympus first half of next year. So when you put those things together and you think about this market, think about the amount of headwinds they went into within the smoke or in the mask of COVID as well, having limited relationships. I think we've done extremely well. I'm looking forward to continued momentum and growth in Europe. We -- on the pricing side with Germany, that is not going to be a yearly thing. We're looking throughout all of Europe looking for price optimization when Hexvix was rolled out in Europe by GE Medical, way back when in 2008-ish, there wasn't really a -- there's a blueprint to doing this properly, and it basically hadn't been done.
So we're going back to try to optimize all the pricing by the countries, keeping in mind the reimbursements and the demands, et cetera. So more to come on that as time goes on, but we always are looking for the right decisions. As I mentioned in my bolder analogy, I mean, what we are facing out of France, U.K. and Italy was just a downward hill. These boulders are rolling down and eventually going to bottom out, and there was going to be no more sales.
We've had to stop the boulders and turn them around and send them back up the hill. And I think this is a great way of displaying that all 3 of those growth countries are moving in the right direction. And then when you think about Germany also is beginning to make its moves going in a positive single-digit growth trajectory, and we think that will continue to improve as well. With that, I'll turn it over to Erik.
Thank you, Dan. Well, as usual, we will start the financial review by reviewing the 2 main segments, North America and as well as Europe. And then we will follow up with the consolidated income statement and headlines from the cash flow and the balance sheet, obviously. Foreign exchange had a significant impact this quarter as well on the results. In short, the FX impact for the second quarter was a revenue of positive, approximately NOK 3 million and for EBITDA, negative NOK 2 million. And year-to-date, revenue impact was approximately NOK 3 million, also positive, and the EBITDA impact was negative NOK 3 million. And just to notice, when I give a number, it's in Norwegian Kroner, unless I give a different currency in the presentation.
So, looking at segment performance first and starting at North America. The North America segment includes Canada from 1st of January this year. In January, we launched Canada in January as our own commercial organization established and started then the direct sale for Cysview. And this sales was previously partnered to Bio-Science in Canada. We have not restated 2021 financial segment numbers to include Bio-Science in North America as these were deemed as non-significant. Total revenue for the year 2021 was less than 1% of U.S. sales, the same year, so not significant.
We have, however, restated the in-market unit sales. So that is included in the numbers that you see on this slide. In-market unit sales in North America in the second quarter increased year-over-year 3% and U.S. unit sales alone increased 4% year-over-year. Revenue increased 24% in the second quarter, of which U.S. had a 22% growth, and the revenue growth was mainly driven by volume growth by foreign exchange, a significantly stronger U.S. dollar and also a price increase. Sequentially, from Q1 2022, North America volume increased 17% and revenue increased 27%, reflecting organic growth as well as the surge of the pandemic, the first 2 months of the first quarter.
Year-to-date volume in North America increased 3% and revenue increased 18%, driven mainly by foreign exchange and the U.S. price increase. Second quarter direct costs increased year-over-year, NOK 8.6 million or 27%. And this increase reflects, first of all, the strengthening of the U.S. dollars, but also operational items such as the investment in the launch in Canada, the preparation for the launch of the new scope from Karl Storz, medical programs and initiatives to develop relevant data; and finally, high activity level, resulting in a year-over-year revenue increase of 24%.
The contribution was negative NOK 2.5 million in Q2 and negative NOK 11.1 million year-to-date and EBITDA was negative NOK 11 million in Q2 and negative NOK 28 million year-to-date. And we are not, as I said before, we are not where we want to be over time. However, the potential in U.S. market is great, and it makes sense to continue our efforts in the market, balancing our investment with the growth potential. Also, our European business had a strong development in the quarter. Volume increased 11% in the quarter and 6% year-to-date. Driving the second quarter growth was Germany, but also priority growth markets as Italy and U.K. had significant volume increase in the [indiscernible].
A part of the Q2 volume increase in Germany was driven by an announced price increase from the 1st of August, which has resulted in customer building inventory in the second quarter. And our estimate is that approximately half of the European volume increase in Q2 is driven by building inventory. So year-to-date, the impact is about 3 percentage points. And this estimate is obviously uncertain, but reflects our view that we have a positive and increasing organic volume growth in the region. Revenue increased year-over-year 6% in the second quarter and will level year-to-date.
The difference between volume growth and revenue is partly driven by negative impact of FX, but also by country mix impacting average selling price as well as changes in inventory level in the channels, particularly in the first quarter. Direct costs in Europe increased year-over-year with NOK 3.3 million or 14% in the second quarter and about NOK 8.8 million or 22% year-to-date. The increase both for the quarter and year-to-date is driven by the investments in the local European commercial organization. As we got control of the Ipsen business in Europe in Q4 2020, we carefully increased staffing and costs during 2021 and considering then the limitations in business driven by the COVID-19 pandemic.
We have continued to increase headcount and costs in 2022, given improved access, but also taking into consideration staffing shortages in the health care sector. And we ended the second quarter with a contribution of NOK 31 million, which is 2% above prior year and an EBITDA of NOK 16 million or 26% of revenue -- we're going on -- starting with the consolidated income statement. Total revenue for the quarter, we crossed the NOK 100 million, so with NOK 100.6 million for the second quarter, an increase of 11% from last year. And the main drivers were volume growth of 9%, foreign exchange impact as well as an increase of average selling price. Year-to-date revenue was impacted by the same drivers.
However, the comparison with prior year was an addition impacted by the upfront payment from [indiscernible] of NOK 6.4 million in the first quarter of 2021. And this payment was for the partnership agreement with Asieris for Hexvix. Operating expenses increased 20% in Q2 compared to Q2 last year, and year-to-date, the year-over-year growth was 28%. Contributing to this increase was the investment in Folks European commercial organization required to support the European activities and sales as well as the commercial investments in U.S. and the launch of the Canadian business.
Furthermore, operating expenses, both for the quarter and year-to-date were impacted by the strengthening of the U.S. dollar. Sequentially, from the fourth quarter of 2021, the second quarter operating expenses increased 2%, which was solely driven by foreign exchange. EBITDA in Q2, NOK 1.4 million compared to last year, NOK 5.8 million. Approximately half of the decline from last year was driven by foreign exchange. The year-to-date revenue was negative NOK 12.5 million. This is lower than prior year due to cost increases, combined with the negative revenue impact from the COVID-19 pandemic, which was particularly strong in Q1 in the first couple of months in the Q1.
Depreciation and amortization was NOK 6 million in Q2 and NOK 12 million year-to-date, and main cost item is the amortization of the intangible assets related to the return of the European business from Ipsen. Net financial items, cost of NOK 4.5 million in Q2 and year-to-date, a net cost of NOK 11.8 million and net financial items are mainly driven by interest on loan of NOK 0.5 million year-to-date and the accrued interest costs totaling NOK 12 million year-to-date for the deferred consideration to Ipsen.
Furthermore, we have incurred a currency gain of NOK 2.3 million year-to-date, of which -- most of which was in Q2. Tax expenses in Q2, NOK 9.4 million as expense and year-to-date, NOK 4.1 million and tax income in [indiscernible] relate mostly to our tax asset and tax loss carry-forward in the parent company. In other words, it's not tax payable. The Q2 net tax expense is driven by currency fluctuation for intercompany items in the period. After net financial items and tax, we have year-to-date, a net loss of NOK 40.4 million compared to a net profit last year of NOK 4.6 million. Looking at cash flow, and finally, the balance sheet. Net cash flow from operations, negative NOK 2 million in Q2 and NOK 24 million year-to-date.
And this is mainly driven by EBITDA and working capital development. Year-to-date working capital development was driven by increased both inventory and accounts receivables and also reduced accounts payable and accruals. And the accounts receivables and also inventory is obviously driven by a significant increase in revenue quarter-over-quarter. Cash flow from investments was in Q2 negative NOK 2.5 million, while cash flow from financing was negative NOK 8 million, which was driven by the repayment of the long-term loan and the Ipsen earnout payment. And that gives a net cash flow in Q2 negative NOK 12.4 million and year-to-date negative NOK 49.8 million. And the cash balance at the end of the quarter, NOK 273 million.
The balance sheet, a couple of words. Non-current assets, NOK 362 million at quarter end. This included customer relationship of NOK 137 million, and the customer relationship is the intangible asset identified in the purchase price allocation for the Ipsen transaction. Non-current assets also include both goodwill from the Ipsen transaction of NOK 144 million and a tax asset of NOK 49 million at the end of the quarter. Our customer relationship is amortized on a straight-line basis over ten years, while goodwill is subject to impairment testing.
Inventory and receivables, NOK 98.1 million at quarter end, an increase from year-end of 2021 of NOK 8 million. This is mainly driven by increased revenue in the quarter. And then long-term liabilities, NOK 169.4 million includes the earn-out liability of NOK 137 million. The earn-out liability represents a capitalized value of estimated future earn-out payments to Ipsen, the liability subject to a ten-year amortization or annuity. And finally, equity at the end of the quarter, NOK 475 million or 65% of total assets. This concludes the financial section.
Thank you. Great. Thank you, Erik bring it home. All right. Just a quick reminder on this market and where we are today. This is nearly a $2 billion total addressable market. We believe we have all 5 things in order, continue improving on some. We have the approval both on the surgical and on the surveillance side of the business. And post -- as I mentioned earlier, post-COVID, there continues to be growing interest in particular, on surveillance, which is, if you recall, it's about 3 to 4x the size of the operating room with the surgical business. We're accepting all national, local and government guidelines.
We continue to look for ways to improve that, but we're in good shape there. We have access, continued improved reimbursement. We continue to work there in that area. Reimbursement is key to any of these businesses, and we'll continue to try and improve it. But so far, we've done quite well. Activated awareness, patients are seeking it, physicians are seeking it. I think even more importantly, capital equipment manufacturers have realized and woken up to the idea that Blue Light is here to stay and we need to reinvest, and that's why Karl Storz, Olympus and why Richard Wolf is also engaging with us and coming out with better and newer equipment. And finally, accelerating our commercial investments.
From an organizational standpoint, we have a quite stable sales force. We don't have a lot of turnover. In fact, very little. Those relationships are strong. They've kept those relationships strong through COVID and looking forward to leveraging them as we come out of this period of time. Anticipated milestones regaining our trajectory that we continue the trajectory out of Q2. Co-launching the Karl Storz equipment. I say co-launch I mean, this is their device. But at the end of the day, we go together into these accounts and launch the new Blue Light system.
First, as I mentioned, the OPP, the obsolete protection plan accounts was approximately 30 of those. Those are 30 accounts that are already Blue Light equipped, but are going to swap out with the new equipment. So as we do that, we think we can get through that within a month or so, and then we'll start out on the new customer accounts and then eventually convert the older customers who are on old standards of care. Publishing new data, look for a lot more new data coming out. The registries are rich, they're mature. There's tremendous insights coming out of them. So look, as we go through the rest of this year and certainly into 2023 and beyond.
We'll report on our partnered companies. We've mentioned -- we talked about Acerus on the Suvirus side, look for upcoming news on Acerus on the Hexvix side and beyond with some of our other partners like IGL Medtech et cetera. And then we'll continue to evaluate strategic business opportunities, leveraging our organizational strength and in particular, our global footprint in uro-oncology, which is very unique and very special when you think in terms of the relationships that they build from a med-tech perspective, they're very, very tight. All right.
So in summary, I think a great quarter overall, a very good quarter, 12% growth year-over-year despite the staffing and COVID impacts. We have a very, very strong new pipeline coming out. So when Karl Storz gets to the point where they're launching in the end of September time frame, we have a very strong pipeline behind it and new customers that are itching to get the Blue Light. We expect the new Blue Light system for Karl Storz to launch in Europe sometime during Q3, Q4. So that will be further enhanced the efforts in throughout Europe. Continued initiatives with the regions, our commercial regions and licensing partners.
And finally, I think we are well positioned for organic growth, and I am expecting growth to start picking up in the second half of this year and continuing out after we launch the Karl Storz system.
So with that, I think I'll ask Erik to join me on stage, and we will answer questions from the audience or from online.
Okay. Anyway, thanks for everyone for coming out. I recognize it's still sort of end of summer here in the Nordics, and there's beautiful weather outside. So we'll move on to that as soon as we can. Meantime, I'm going to take a couple of questions from the e-mail questions, and then we'll also go into the room and see if there's any questions out here. So the first question coming in online. Can you give an estimate of the TAM for Hexvix in China? And roughly what percent would you expect Acerus to capture in that market?
It's a good question. It's probably a better suited question for Acerus since this is really going to be their product and their responsibility. There are about 86,000 new cancer patients, later cancer patients per year is pretty much equal to what the U.S. is. As far as the TAM, it depends on where they come out with the ultimate price in Europe, I mean, in China, certainly not at the U.S. price. So I really can't answer that completely, but maybe in a future time, we'll get that answer.
All right. Very good. If anybody has any questions in here, please just raise your hand. So all right. We'll go to the online questions again. This question, I believe, is for Erik. For the European business, sales and marketing expense account for about 48% of revenues in Europe. By the time the U.S. business reaches a similar level, would you expect the ratio to remain the same between sales and marketing.
I do expect that the U.S. will get to the same levels as Europe does or are in right now. I mean the U.S. business, looking at sales and marketing today, it's above 100% of revenue, which is obviously not sustainable. It's a major KPI. We need to look at it, and we need to work with it. And the key is sales productivity. That's what we're working on.
Okay. Great. And Dan this one is on...
Could I add one comment?
Yes, absolutely.
We have areas or regions within the U.S. that have a similar productivity, and that is very profitable. So we know it's possible.
Great. So here's another online question. Dan, what is your best argument to shareholders to keep them holding the shares until we see a more visible situation regarding COVID and the new equipment launch from Karl Storz.
I got lots of reasons. I mean -- I'll first say, personally for me, I can continue to accumulate shares. So I believe in me and I believe in my company, I believe my product. And I believe we have the best technology to say cancer patients. Beyond that, you've got multiple capital equipment manufacturers that I've told you about today that are investing millions of dollars to come out with new equipment to address the Blue Light technology and the need for Blue Light and Cysview in the treatment and diagnosis of bladder cancer.
KOLs are clamoring. COVID is underscored the importance of Blue Light technology when uncertainty of patients going into clinics to get surveillance or get surgeries is not certain. Blue Light technology offers them a one-stop kind of get it done right, the very first time, don't take your chances of white light missing something and then the patient doesn't come in for a year later. I think we're on the verge of a lot of great events coming. Some I know are out there, and we're not going to talk about today, but other ones that we already have seen. It's the capital equipment manufacturers.
It's Karl Storz launches. It's our sales force being unbridled out in the marketplace where for the last 2 years, they've had to deal with COVID. So those are the reasons I would, and I get into now. I wouldn't wait. You might miss.
Great. And actually, there's a related question about the capital equipment launches in Europe. Can you give a little more color about that? And what does that say about the market?
Yes. Well, I mean, we talked about it. Karl Storz is upgrading their equipment in Europe, and it happened sometime between sort of this third and fourth quarter, kind of around the October, November time frame, they'll launch it. It's not -- it's dramatic in impact as the U.S. U.S. had standard definition, old stuff that was over a decade old. Karl Storz has done slight upgrades to their equipment, but they're going to bring it into the 2022 standards with these new tweaks and changes are making to it, but still positive. I think what's most important to keep in mind is Olympus' commitment to come back in and redo their systems. They're all over the Nordics. They're heavy throughout Europe.
They are a major player in the world for them to recommit into Blue Light Cystoscopy is it sends a major signal to everybody that they are here -- that this is something their customers want and that the patients are asking their customers for and that we're there to support. So I think that, if anything, is probably one of the most dramatic developments going on for us. And that's what I can talk about today. And there are others who have noticed the Blue Light Cystoscopy and Cysview market, and they also are kicking the tires and thinking this is probably a market we want to get into as well. So more to come.
Perfect. Okay. And here's a 3-part question. First of all, you mentioned improving organic growth ahead. Will that be as of the fourth quarter? Or when should we really expect an acceleration in that organic growth?
I think as we get through third into the fourth quarter and going into 2023, Yes. I think the Karl Storz launch is a key part of it because right now in all honesty, we haven't really put new equipment in for -- by the time we get there, almost 12 months. In new equipment, if you think about new equipment or new accounts, they are like jet fuel to the engine. They come on, they have zero sales, and they're growing at tremendous rates. They start throwing that growth rate for the total base of business up because they're growing at a much higher rate.
Once they get to maturity, they've been around for 4, 5 years. They're not growing. They might add 5 more Blue Light scopes more patients or 5 more patients. That really doesn't flow all the way down. But you bring in a new account that those 25 in the first 6 months, it does 50 in the second 6 months, it does 100 in the next 6 months, selling those at rates. But what we suffered from for the last 18 months or 12 months is we don't have the jet fuel.
We don't have those new accounts with the high growth rates in there. So they're not as evident to everyone as to what's going on in the marketplace. But I can tell you that, that's going to be key. And I think as we launch coming out of September, October, November, you're going to start seeing that jet fuel kick in.
Yes. So here is a related question to that. How quickly do you think you can surpass the annualized new installation rate that we saw in 2019?
We're not going to give any exact predictions, but you got to think about new equipment coming in. It still has to go through value analysis committees, P&T committees and capital equipment expenditure committees. That can range anywhere from a couple of months to 6 months, in some cases because they got Blue Light already in, the accounts will waive it. But I would say you got to go to give it a good 6 months before you start seeing it really kind of kicking in. That doesn't mean we're going to -- we've got a lot of accounts that will be going, but I'm just saying from a bolus and all on regaining full momentum of the pipeline 6 months.
And just shifting gears to reimbursement in Europe. What can you say about the prioritized markets such as France, U.K. and Italy?
In terms of what?
The reimbursement status.
Continue to work on them. France, Germany, they all -- we all have access in those countries, but there's ways we're looking to improve or protect where we're at. So it continues to be a priority. We have -- we go through the pricing optimization from a pricing standpoint that individual is also responsible for all reimbursement and funding throughout Europe as well. And so we've identified various initiatives in various countries to make sure that we continue to stay in positive reimbursement and positioning on their formularies, et cetera.
Okay. Here's a question about guidance. Can you say anything about when you'll be able to issue financial guidance again?
Well, as soon as I can, to be honest, because I'd like to have guidance out there. We decided this quarter, as we did last quarter, not to give a guidance, basically because of the uncertainty in the market. But I hope -- I do hope that by next quarter, we will be able to do that guidance.
And I might add, the guidance might come in different KPIs. It may not just be in the revenue guidance or might start out with some other things. We reflect on this. We were thinking about issuing guidance at the end of last year, first quarter of this year, not knowing and not predicting Omicron. We all know what happened in the first quarter for almost everybody. we couldn't predict it. Then we thought we had Karl Storz launching in sometime in the April time frame. Well, that postponed and now we're into September. So there's been so many uncertainties as we feel like until we got control of the things that we don't have control of the at least more certainty, we can feel better about giving guidance that people can count on it. What we don't want to do is give guidance and pull it 2 months later because something else happened that we had no control over. So we want to make sure we got some certainty out there.
Great. Here's a question about the pandemic effect in the second quarter. Was it better, worse or unchanged?
Better, better. I think the remnant of COVID, I think everyone knows how to deal with COVID now. There is impact. Patients get it, they can't go see their doctor. The doctor gets -- he can't see patients or she can't see patients. More importantly, I think the rent is the staffing situations that -- that came out of COVID and the long hours that people worked and people left the industry, and they're trying to find people to replace those individuals. That still remains. And we called it third quarter last year, we said we can see this coming on, and we've been consistent. And we said that it was resolved as the year goes on. It is resolving. It's not resolved, but it is in process. I anticipate that it'll be not until early '23 before we feel like, okay, everything is staffed. They got the employees, and we don't have any glitches sort of in our process.
Okay. And actually, that's all the questions we have online. Anybody in the room with a question? No. It looks like no more questions. So I'll just turn it back over to Dan to conclude.
All right. Well, thank you very much. Look forward to speaking to you at the next quarterly update. Thank you.