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Establishment Labs Holdings Inc (ESTA) Q4 2020 Earnings Call Transcript

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ESTA earnings call for the period ending December 31, 2020.

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Establishment Labs Holdings Inc (NASDAQ: ESTA)
Q4 2020 Earnings Call
Mar 10, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon. Welcome to Establishment Labs' Fourth Quarter 2020 Earnings Call. At this time, all participants will be in listen-only mode. At the end of this call, we will open the line for a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this call is being recorded.

I will now turn the call over to Raj Denhoy, Head of Strategy and Investor Relations. Please go ahead.

Raj Denhoy -- Head of Strategy and Investor Relations

Thank you, operator, and thank you, everyone, for joining us. With me today are Juan Jose Chacon-Quiros, our Chief Executive Officer; and Renee Gaeta, our Chief Financial Officer. Following their prepared remarks, we will take your questions.

Before we begin, I would like to remind you that comments made by management during this call will include forward-looking statements within the meaning of Federal Securities laws. These include statements on Establishment Labs' financial outlook and the Company's plans and timing for product development and sales. These forward-looking statements involve material risks and uncertainties, and the Company's actual results may differ materially.

For a discussion of risk factors, I encourage you to review the Company's Annual Report on Form 10-K, which we plan to file with the SEC tomorrow, and which will be available on our website at establishmentlabs.com.

The content of this conference call contains time-sensitive information accurate only as of the date of this live broadcast, March 10, 2021. Except as required by law, Establishment Labs undertakes no obligation to revise or otherwise update any statement to reflect events or circumstances after the date of this call.

With that, it's my pleasure to turn over the call to our CEO, Juan Jose.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Thank you, Raj, and good morning, everyone. I hope everyone is healthy and continues to remain safe. Our fourth quarter revenue of $27 million represents a new record for our Company. Fourth quarter revenue increased 11% over the fourth quarter of 2019 and was up sequentially 18% from the third quarter.

Our strong results and recovery we saw over the course of 2020 are the latest evidence that we are moving beyond the pandemic and that the foundations of our growth story are very much intact. Our singular focus on women's health and the superior aesthetic and safety profile of our implants continues to resonate in the marketplace. We continue to grow our total global market share.

In October of last year, we shared a 10-year post-market surveillance data of our Motiva Implants. With now over 1.4 million implants worldwide, we continue to report a less than 1% complication rate in the key safety measures of capsular contracture and implant rupture. These results are at least an order of magnitude better than anything seen from the legacy competitor products in the international markets.

As impressive as this data is, it speaks to something beyond just a competitive advantage. It should change how women perceive the safety of breast augmentation procedures. At Establishment Labs, we believe that this is not just possible, but likely. We believe that our data and aesthetic outcomes are quite literally game changing. And as perceptions change and as new possibilities become available, the total addressable market could grow substantially.

Another area where we are working to change perceptions is in the breast reconstruction [Technical Issues]. With one in eight women afflicted by breast cancer, being able to offer a substantially better alternative is an important mission for our Company. In many countries around the world, less than 10% of women have breast reconstruction after a mastectomy. One reason for this is that the historical focus of breast reconstruction has not been on achieving an aesthetic outcome.

Our goal is not just to allow for safer breast reconstruction but to create a new standard of aesthetic breast reconstructions where the patients' aesthetic outcome matches traditional breast augmentation. Within this [Technical Issues] and have much more comfort with this important surgery. The planned launch of our Flora tissue expander is an important step in offering a better solution to these patients.

2020 was also an important year for Establishment Labs because it tested better solution to these patients. 2020 was also an important year for Establishment Labs because it tested our company and showed that we can manage well during the most difficult times. We conserved cash and protected our people while continuing to invest in strategically important initiatives. We reduced spending at the height of the pandemic, but we did not reduce headcount with our customer-facing commercial team.

Our balance sheet remains in great shape with $84.5 million in cash. Renee and her finance team managed our operating expenses and working capital well, and our cash balance increased in the fourth quarter. As impressive as this discipline has been over the last year, we are increasingly confident that the worst of the pandemic is behind us. And given the significant opportunity is still in front of us, we intend to invest in our future.

In manufacturing, just last week, we passed our annual audit under the MDSAP standard with no major observations. MDSAP is a single audit program that covers requirements for U.S. FDA as well as regulators in Europe, Canada, Japan, Brazil, Australia, and other jurisdictions. 2020 has also validated our focus on making digital part of the fabric of our Company. With our MotivaEDGE online programs, we trained thousands of plastic surgeons in 2020 and attracted many new potential customers through our best-in-class digital training and educational resources.

On social media, we have built a commanding presence with our message of women's health and improved safety and aesthetic outcomes. We have more than 10 times the social media engagement of our closest competitor. This level of engagement allows us to support a patient's journey as she conducts research and helps us provide answers customized to our specific areas of interest. Our marketing team is also focused on initiatives to leverage our online presence to provide valuable insights into women's decision making, as they seek breast aesthetic procedures. This level of digital-based activity is unmatched in our industry. As challenging as the last year has been for all of us, our strong financial results and the resiliency in our business makes us even more confident that we will have continued strong growth for the foreseeable future.

Given the momentum which has carried over from the fourth quarter, we are providing guidance for the full-year 2021 of $110 million to $112 million. This represents growth of 30% to 32% over 2020. Renee will provide more detail on our financial results and our outlook in a moment.

Before I turn the call over to her, I want to provide an update on several near-term initiatives. On February 9, we hosted a virtual meeting showcasing the significant development work we have done on Motiva Mia, our minimally invasive breast enhancement procedure. Along with strong investor and industry participation, we had over 100 plastic surgeons tune in and the feedback has been outstanding. A minimally invasive breast enhancement procedure that can be done in less than 30 minutes without general anesthesia and with no visible scars has been a goal for decades in our industry. And with Mia, we feel we have developed a system that matches that goal and one that is simple to perform, reproducible and safe.

We have learned a tremendous amount in our early series of cases. The learning curve for Mia is very fast, with all surgeons able to reduce their procedure time by 50% after performing only three to four procedures. Procedure times fell to as low as just 13 minutes. Recovery is also very fast with patients discharge in our initial series in as little as 28 minutes and back to work in less than two days, with little pain or discomfort.

Motiva Mia opens up breast enhancement to many women who previously had not considered breast surgery, and we view this technology as expansive to the overall market opportunity for breast aesthetics. Based on our proprietary market research conducted with over 4,000 women around the world, our initial estimate of the global market size for Mia is 1.9 million procedures a year. This market expansion will increase the total addressable market from $1.5 billion with traditional breast implants to more than $5 billion with Motiva Mia.

The Ergonomix2 Diamond implant used in Mia received CE mark in December, and we are now advancing with the regulatory process for the tools that are part of the Motiva Mia system. We continue to define our commercial strategy and we will share more detail in the near future.

Our Ergonomix2 round implant was also CE marked in December. The Ergonomix2 platform builds upon our successful Ergonomix implant, which has become our best-selling and most premium offering in Europe and Asia Pacific. The features of this innovative new product, including enhanced mechanical properties, advanced chemistry and improved ergonomics, we believe will result in even greater patient satisfaction. As it is so feature-rich, we expect Ergonomix2 to command a price premium over Ergonomix. Our early experience in Latin America with Ergonomix2 implants has been very positive. We are on track to begin early commercial activity in Europe with Ergonomix2 over the summer.

Flora, our novel tissue expander, received CE mark in June of 2020. Renowned centers for breast reconstruction in Europe have used Motiva Implants for years, and are looking forward to pairing them with the Flora tissue expander and the unique features it offers, including our proprietary SmoothSilk bioengineered surface. With an integrated RFID port, Flora will be the only MRI-compatible tissue expander on the market, which is a significant improvement over the current standard of care. Pre-marketing activities are under way in preparation for a broad commercial launch in Europe over the summer, and we are already in contract discussions with several hospital accounts.

Our clinical and commercial progress in China continues and we are moving toward launching in this important market in 2022. Our regulatory timelines for U.S. approval also remain unchanged. More than half of our U.S. IDE study patients in the aesthetic cohorts have now reached their two-year post-op anniversary.

I will now turn the call over to Renee.

Renee Gaeta -- Chief Financial Officer

Thank you, Juan Jose. Establishment Labs closed 2020 with significant momentum. Not only did we see strong sequential growth in sales this quarter to a new record level, we controlled operating expenses and managed our cash position effectively. I'd like to thank the team for helping keep Establishment Labs in a solid financial position. You can find additional details about our fourth quarter financials in our earnings press release and our Form 10-K, which we plan to file tomorrow.

Total revenue for the quarter was $27 million. Direct sales were approximately 49% of this total, while distributor sales, which can fluctuate based on changes in inventory levels and the timing of reorders, made up the balance.

From a regional perspective, sales in Europe comprised approximately 45% of global sales, Latin America was 29% and Asia-Pacific/Middle East made up the balance. Brazil, which is our single largest market globally, accounted for approximately 13% of total quarterly sales. Both direct and distributor sales in Latin America have rebounded and were up year-over-year.

Our reported gross profit for the fourth quarter was $14.6 million or 54.3% of revenue, compared to $16.4 million or 67.5% of revenue for the same period in 2019. The year-over-year decrease was due to the timing of certain one-time expenses related to inventory obsolescence and scrap.

As a reminder, we only report GAAP results and do not exclude these types of expenses from our results. Collectively, these items reduced gross margin by approximately 6% in the quarter and 2% for the year. Importantly, despite these charges, gross profit increased on an annual basis in 2020 to 62% from 61.3% in 2019. Average selling prices in the fourth quarter were consistent with the year-ago period. While there will be fluctuations as we saw in this quarter, we continue to expect an upward bias in gross margins over time.

Total operating expenses for the fourth quarter were $22.7 million, an increase of $1.9 million compared to $20.8 million in the same period a year ago. SG&A expenses for the fourth quarter increased $1.1 million to $18.2 million, compared to $17.1 million in the fourth quarter of 2019. The majority of this increase resulted from insurance costs and investment in digital transformation systems.

Our R&D expenses in the fourth quarter increased $900,000 from the same quarter a year ago to $4.5 million. This increase was due to the timing of clinical trial expenses and increased investment in several development projects. Strengthening our product portfolio to drive future growth remains a top priority, and we will continue to be disciplined and focused in our research and development investments.

Net loss from operations for the fourth quarter was $8 million, compared to net loss of $4.4 million in the year-ago period.

During the fourth quarter, we generated $3.1 million in cash, and from a balance sheet standpoint, our cash position remained strong at $84.5 million as of December 31, compared to $81.4 million on September 30th. The increase this quarter was primarily the result of strong working capital management.

As Juan Jose noted earlier, we are providing sales guidance for 2021 of $110 million to $112 million, representing an annual growth of 30% to 32%. As we look down the rest of the P&L, we expect to see spending increase as we prioritize investment in the development and commercialization of a significant number of programs we have under way. However, while operating expenses tied to these new programs will increase, we expect a number of cost efficiency programs we implemented over the past year will become permanent. This increased efficiency as well as our strong revenue growth should result in our cash use continuing to trend down from pre-pandemic levels, even as we increase strategic investments.

Overall, we believe our Company is in a strong competitive position, the business fundamentals are sound, and we remain very optimistic about the potential for our new products to contribute to growth in 2021 and beyond.

I will now turn the call back over to Juan Jose for concluding remarks.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Thank you, Rene. We are off to a very good start this year. The record revenue we generated in the fourth quarter and our progress over 2020 showed again that ESTA is on the right path and that it is within our grasp to be the leading company in breast aesthetics and reconstruction.

There is no other company in our industry innovating like we are or with our commitment to women's health. The field is wide open for us, but we are not satisfied with just taking share within the current breast implant market. By transforming the patient journey, breast aesthetics and reconstruction, we can expand the markets for our products.

Mia has a real potential to change the perception and accessibility of breast aesthetics, which could make our addressable markets much larger. The launch of Flora this year will begin a concerted push by us into the breast reconstruction market and we see on opportunities to significantly improve outcomes for the millions of women diagnosed with breast cancer around the world.

The next 18 months will be exciting, but so the next 10 years. We recently appointed Raj Denhoy as Head of Strategy and Investor Relations. Many of you know him from his 20 years as a Medical Device Analyst, most recently as our covering analyst at Jefferies. We are excited to have him join the team.

I also want to thank the entire Establishment Labs team for their dedication to our mission of improving women's health. The last year has not been an easy one, but the team continues to perform at a very high level, and I could not be more proud.

With that, we will turn the call now over to questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Anthony Petrone with Jefferies. Your line is open.

Anthony Petrone -- Jefferies -- Analyst

Thank you, and good morning, everyone. Congratulations to Raj on your new role and congratulations to the team on a very strong year. I hope everyone is doing well and staying healthy. Maybe to begin, Juan Jose, a couple on, you mentioned physician training virtually in 2020. Certainly a lot of companies shifted from physical meetings to virtual training, but it sounds like the number of surgeons onboarded last year notably increased.

So maybe just a little bit of detail on how many surgeons were trained virtually last year? And what is the historical conversion rate from training to active Motiva users that you've seen, maybe pre-pandemic and how that's trended during the pandemic? And I'll have a couple of follow-ups.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yes, of course, Anthony, and thank you. It was very important for us to prove that we could shift our medical education platform, MotivaEDGE, from just in-person to online that quickly. So that resulted in -- I think the latest number was over 18,000 attendees for the year in our medical education platform online, of which thousands of those were new contacts for us. Of course it's difficult during the pandemic to follow up in-person with many of them, but we are looking forward to the situation improving so that we can begin doing business with many of them.

As the year evolves, I think you're going to see us doing more in-person than now. But, I guess, what we have been able to prove is that the online medical education can also be a very powerful tool for training and for attracting surgeons that don't know yet about our story of innovation and improved safety and aesthetic outcomes. So, very glad to see the development with, I would guess, this hybrid type of a medical education. And I think it's going to help very much when we move into new things, like Mia and breast reconstruction.

Anthony Petrone -- Jefferies -- Analyst

One follow-up for you JJ and a quick one for Renee on guidance. One would be just a quick update on U.S. studies. Obviously, a lot of studies in 2020 were delayed due to COVID. So maybe just an update on timing there and how should we think about a Motiva Mia launch in the U.S.? Would those come simultaneously just considering the unveiling in February?

And the quick one for Renee on guidance would be how much is baked in for Flora? And is there any way to estimate what you've baked in for backlog recapture? Thanks.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

So, perhaps we can begin with the FDA. So, we were very happy that we finished the enrollment in the aesthetic cohorts back in August of 2019. So, the clock is ticking with that group, which represents 80% of the U.S. market. We've been progressing with the follow up, most of that happening through virtual consultation that was pre-approved with the FDA. So, we are looking forward to the two-year mark for all of those patients.

We believe we are well on track with the aesthetic indication. As we have mentioned before with breast reconstruction, there were a lot of challenges during the pandemic, so that cohort is delayed. But we continue to make progress and we hope to be able to give you some news in the near future.

Renee Gaeta -- Chief Financial Officer

Yeah. Thanks, Anthony. And then also on 2021 guidance, this is our initial view. We are certainly balancing the strength that we've been seeing from the continued uncertainty within the pandemic. We're balancing both sort of timing of those product launches that we've talked about coming this summer, but also some of the deferral recapture because patients -- not all patients can get in, there are still restrictions in certain countries. So, we are seeing continued momentum and the outlook on our business remains very good, and we're definitely continuing to capture global market share.

Anthony Petrone -- Jefferies -- Analyst

Thank you. Congratulations everyone.

Operator

Our next question comes from Josh Jennings with Cowen. Your line is open.

Josh Jennings -- Cowen -- Analyst

Hi, good morning. Thanks for taking the questions, and echo Anthony's congratulations on a strong end to 2020, and it sounds like momentum has continued in the first quarter here. Two quick ones -- two not quick ones, two questions, sorry. The SCHEER report, I think there was a committee meeting in Europe earlier this month or beginning of the month. Any takeaways that you've heard from that plenary session and on the safety of textured implants, and are there any other regulatory decisions on textured implants that could hit in 2021 in other geographies outside of Europe?

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yeah. Thanks, Josh. So just to remind everyone, the SCHEER Committee is basically a committee from the European Commission that focuses on safety across European Union. They began looking at the safety of breast implants last year. They issued a report during Q4. There was clearly associating textured breast implants with breast implant associated ALCL. So, definitely this is something that we have been talking for many years at Establishment Labs, one of the reasons for our success is our proprietary SmoothSilk surface that allows for less inflammation and less capsular contracture.

To date, we have had no cases reported of ALCL. And when we think about what can happen in the future, definitely across the globe, regulators are looking at the safety of textured devices. And we do expect to see a report from SCHEER later this year. It's hard to know with the pandemic exactly when they will be able to finalize that. But definitely our expectation is that it will happen this year that they will give the final recommendations of their report.

We are seeing other regulatory agencies acting across the world at different speeds. But one thing is for clear, textured breast implants are not the future of this industry and we're happy to be part of the future with our proprietary technologies.

Josh Jennings -- Cowen -- Analyst

Great. Great, thanks for that. And my follow-up is just thinking about the future launch of Motiva in the United States. What can Establishment do today and in the coming months and quarters or year in front of the U.S. launch in terms of creating Motiva awareness within the plastic surgeon community? I mean, clearly, the FDA dataset would be a big deal for the -- in terms of sentiment toward Motiva, but in other channels or other strategies that Establishment is considering in terms of creating the buzz and just awareness of Motiva in front of the approval and the launch. Thanks for taking the questions.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yeah, of course. We have to be very mindful of not doing pre-marketing activities. The FDA does frown on those. But at the same time, our job is to continue to put out in peer-reviewed journals the evidence on the science behind our technologies. But also, there has been more and more independent and sponsored peer-reviewed studies that have been coming out, and I think we will do so, we will see more in the future.

I think also there is an awareness globally that there are new technologies out there by Establishment Labs and those have the -- can impact positively patient outcomes. So, I think the plastic surgery community in the U.S. is well aware that something is going on. And as we get our clearance from the FDA, we will be very happy to engage with them and get them to use our products quickly.

Josh Jennings -- Cowen -- Analyst

If I could just follow up, any incremental thoughts on a potential Flora launch in front of Motiva approval in the United States? Thanks. Thanks again.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yes. So, for our tissue expander, Flora, which is the only MRI-compatible tissue expander with integrated valve, we expect to submit a revised 510(k) in the first half of this year, and we will update you on the progress on when we do receive approval. And of course, that gives us the optionality of launching that tissue expander ahead of the breast implant approval. But it's too early to tell you about what will happen, but we will definitely update you on the different milestones leading to that.

Josh Jennings -- Cowen -- Analyst

Understood. Thank you.

Operator

Our next question comes from Chris Cooley with Stephens. Your line is open.

Chris Cooley -- Stephens -- Analyst

Thank you. Good morning, and appreciate everyone taking the questions. And I'll also utter everyone else's prior [Indecipherable] phenomenal performance in a extremely challenging year. If I could, let's go back and just revisit for my first question, the -- your commentary around the reconstruction marketplace, clearly better clinical outcomes, but I'm curious as how you achieve a more augmentation or aesthetic outcome for those patients.

And I guess, I'm just trying to go farther afield here. Do you ultimately envision Motiva Mia being used in these cases or do you also envision some type of a ADM being brought on board at some point in time as these women more -- not unfortunately have extremely radiated tissues there? So, traditional implant just doesn't really work as well. So just, would appreciate any additional color you could provide on the complete suite that you think you'll have to bring to bear here in that segment and how you would achieve a more aesthetic outcome. And then I've got a quick follow-up.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yeah. Thank you, Chris. The rates of access for women in breast reconstruction globally are quite low. In some markets, they can be single digits. And part of it is awareness of good options and good outcomes in breast reconstruction. Our plan is to transform breast reconstruction over the next decade by using technology and advanced techniques to bring about what we call an aesthetic breast reconstruction, which is to bring outcomes that are closer to those of aesthetic patients.

There was a publication -- independent publication last year in PRS Open journal regarding the use of Motiva Ergonomix implants in a hybrid breast reconstruction. If you go to that article and you look at the outcomes, it is hard to think that those are not aesthetic-looking outcomes, and that's exactly what we are looking for. We are looking to take some of these initial results with our products and make them into a standard so that they can be used by surgeons worldwide. By democratizing this level of outcomes, we believe more women will be willing to have a reconstruction procedure. But we are not only looking at that, we're looking at early detection, so we can help these women ahead of time before it's too complicated to get a good outcome.

And, of course, Flora is our first technology that is uniquely suited for breast reconstruction. As we expand our technologies, you'll see us bringing other products to market. And as I said, our plan is to transform breast reconstruction just like we've done with breast aesthetics before.

Chris Cooley -- Stephens -- Analyst

Thank you. I appreciate all the additional color there. And then, maybe just for my follow-up, Renee, if I may. When we think about the year, and I appreciate it's early on, and a number of moving parts here, but it does seem like there will be some fairly significant needs for investment this year, not only from a working capital perspective but also just in terms of just traditional sales and marketing expense.

Could you maybe just help us think a little bit about maybe first half versus second half? Just any kind of granularity that you could provide there about how we should think about this ramp up in the spend from the Company's perspective, and anticipation of these really exciting new launches here come summer time? Thank you so much.

Renee Gaeta -- Chief Financial Officer

Yeah. Sure, Chris. It's a great question and we're obviously factoring in all of the different exciting programs that we have going on here, how does that look with regards to those product launches and rolling out the new advancement that were in technology that we're going to bring to the space, but also balancing where we're at with our own -- our own internal strength and what we're still seeing with the pandemic. So, I wouldn't necessarily say first half and second half, I'm not going to give sort of quarter-by-quarter breakdown.

We will see spend increase and would probably expect it as we roll out some of those additional programs over the summer, the spend would align with that. So, we're super excited about how we've come out of the pandemic, the strength that we're seeing and how our products are resonating with patients and plastic surgeons. And I think as we look forward through the rest of the year, we really want to make sure that we're investing strategically to execute on those new milestones.

Chris Cooley -- Stephens -- Analyst

Thank you.

Operator

Our next question comes from Matt Taylor with UBS. Your line is open.

Matt Taylor -- UBS -- Analyst

Hi, thank you for taking the question. So, I wanted to start and ask one about this continued momentum that you called out in Q1. I was hoping you might be able to be a little bit more specific. You mentioned that there's some countries where people are still having trouble with access. I know you're in 80 countries, I don't expect you to go through all of them. But could you give us some flavor on where things are going better versus still slow, and how you've imputed that into the initial guidance here?

Renee Gaeta -- Chief Financial Officer

Yeah, certainly. You're right. We're in over 80 countries, and then obviously the top set of those drive a big chunk of our revenue and we have to be mindful of sort of what's happening in Europe. We've seen some great response there and hopefully the vaccine rollout continues and actually increases in momentum. I think as we also look toward countries like Brazil, which for us is often times the leading country, they are seeing an increase in case volumes right now after sort of coming out of their summer, and they're carnival season, where some regional governments have recommended deferrals of non-essential surgical procedures.

So we're weighing in all of those factors and do watching it daily or weekly just to see what happens. I think as countries open, vaccines rollout, that's always positive for us, but we're still in that interim period right now where we're just trying to provide patients with our implants and procedures where we can. But in some cases, those are still restricted in our larger countries as well.

Matt Taylor -- UBS -- Analyst

Okay, great. And one of the recent developments that could be really positive for you is Allergan's exit from the number of the OUS markets and I was hoping you could provide some commentary there in terms of how quickly you might be able to capitalize on some of that or just framing that opportunity for us.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yeah. Thanks, Matt. I think this action is in some ways a logical response to the innovation gap that has opened up in the market, but we have to be mindful that it really began in over two years ago, when there was the global recall of Allergan's textures products. And the international market at that time was majority textured and of that, Allergan had a good portion of it with their textured devices.

So, the shift away from Allergan really began over two years ago. Many of those users shifted to other textured devices naturally. So, that's why we are so adamant about our medical education, about evolution from textured devices to smooth devices, and if it's going to be a smooth device, an advanced bioengineered smooth device like ours.

In saying that, you have to be mindful that we are taking market share from the rest of the competitors, including Allergan, and also that in many markets we are moving into a leadership position. So I think in a market where you don't have Allergan, our leadership position could be even stronger. So, that's probably one of the most important takeaways from us strategically.

And I think we are confident that we can continue taking market share organically and on top of that, add the new geographies like China and U.S., where we still have Allergan as a competitor.

Matt Taylor -- UBS -- Analyst

Okay, great. That's a good way to think about it and that dovetails into my kind of last follow-up here. You talked about your leadership positions. You have intermittently given some color on market shares in certain geographies, relatively high numbers. Could you update us on a few of those and where your shares are today, help us think about how your shares could gravitate higher over time based on your differentiation?

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yeah. I think that we plan to give a good update on international markets and the market share position that we have in them. But I can tell you, just to give you some ideas of how good we've been doing in countries where we launched last, like Thailand and Taiwan, we went literally from zero to being on par with the market leaders in those markets, and that shows you how quickly we can grab market share.

I think we have a good blueprint these days about going into a market and using medical education and patient education to quickly gravitate the market toward us. I do believe, though, that in the international market, you can think of Establishment Labs is well under way to a market leadership position.

Matt Taylor -- UBS -- Analyst

Great. Thanks, JJ.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Thank you.

Operator

Our next question comes from Amit Hazan with Goldman Sachs. Your line is open.

Philip Coover -- Goldman Sachs -- Analyst

Hi all. This is Phil on for Amit. Thanks for taking the questions as always. I wanted to circle back on the Mia event that happened earlier this year and ask if you all can sort of detail the steps and the timeline that are ahead to performing commercial procedures in Europe, obviously, just one of the three elements approved today and the clinical stuffs that are still ahead?

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yeah, of course. So, just a reminder, our Minimally Invasive Augmentation, the concept includes no general anesthesia, fast procedure, quick discharge of the patient, and quick recovery times. In the series that we performed in Costa Rica, we were also able to prove a quick learning curve for surgeons and that is fundamental to that timeline.

We were very happy to see the CE mark for the Ergonomix2 Diamond breast implant that is part of the Motiva Mia system. We are now expecting a -- an approval of the tools that go with the Motiva Mia system, and we're talking about the balloon that is used to create the space through a very small incision and also the Motiva injectors, so that we can safely deliver that Diamond implant through that very small incision.

For us, the approval of another group of patients in the Costa Rica series is very important. So, we are taking that group to 100 patients and procedures are happening week-to-week, and we are progressing toward that end.

Once we get the approval from the European notified body in the second half of this year, we will begin pre-market activities, which will give us the optionality of launching early in 2022. So, of course, we are super excited about these possibilities in our market research. A significant amount of the opportunity lies in Europe and we do believe that it proves that this concept that was born, as you know, more like a way to adapt our technology to Asian patients, has now proven to be a very appealing option for women who are not thinking about traditional breast augmentation, but who are probably not as happy as they could be with their breast shape or size.

Philip Coover -- Goldman Sachs -- Analyst

Okay, thanks so much. And then my second one, there was a specific comment in the Raj announcement of joining the team about helping to create value as you expand into new areas of aesthetics. Maybe it's for you, Juan Jose, or maybe for Raj [Indecipherable], I'm just interested in what the implication of that was and how you see Raj's role for the Company. Thanks so much.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yes, of course. We're very fortunate to have Raj joined the team. As we think about the future of the Company, I think that you have to understand what is it that we bring to aesthetics, and I think what we bring that is different is that angle of women's health. And we will continue to work toward that end. We always say that we are doing this initially in breast aesthetics and reconstruction, but as the opportunities come to us, we will be very mindful of what fits that angle of women's health. There are many things out there, many interesting technologies. We continue to work through our rich pipeline internally. But at the end, we'll do what it's best for the Company and the shareholders.

Philip Coover -- Goldman Sachs -- Analyst

Thanks, Juan Jose.

Operator

Our next question comes from Marie Thibault with BTIG. Your line is open.

Marie Thibault -- BTIG -- Analyst

Great. Thank you for taking the questions this morning, and I'll add my congrats to the list here, very strong quarter and congrats to Raj as well. Wanted to start here with the new Ergo2 implant, expecting that launched this summer here in Europe. Could you give us a sense of the pricing premium you're hoping to attach to that product? And how we might expect adoption with existing Motiva users to sort of rollout? Is that something that you would expect to pretty much replace their current Ergonomix use, would they be using it in specific cases, how do you see that being rolled out?

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yes. Thanks, Marie. So back in 2015, when we launched the first generation of the Ergonomix device, that came at a premium of about 50% over around SmoothSilk device. And most people thought that doctors would not pay for that premium. The important thing for us is that we were able to educate patients on the benefits of the Ergonomix device ahead of them visiting a plastic surgeon. So that made them less price sensitive because they were able to see the value in the Ergonomix device. The comfort, the softness, the tissue-like qualities of that implant are very appealing to many women. So, they found themselves in a situation where they were willing to upgrade and pay for that premium.

I think a similar thing may happen with Ergonomix2. But remember, this doesn't happen overnight, surgeons have to try the device, patients will come back with their views on the Ergonomix2 device. I can tell you from our early experience that patient feedback is extremely positive. So, we do expect to see a similar process of adoption in which patients push surgeons to upgrade their procedures to the Ergonomix2 device. So, hopefully a year -- a few years from now, we will be able to tell you that that is our number one offering, and we certainly expect that.

Marie Thibault -- BTIG -- Analyst

Okay, great to hear. I think, JJ, you mentioned that on the Mia symposium, there were over a 100 plastic surgeons who tuned in. Any surprising feedback from that group? Anything that kind of took you by surprise?

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yeah. Probably the amount of surgeons that called our sales reps saying how fast can I have it. I think that was probably the most important takeaway from that part is that, yeah, of course, plastic surgeons have been thinking about this for decades. It's a logical outcome, can we do a minimally invasive augmentation safely, quickly, can we make it through a reproducible technique. And I think that's what we've been able to create with Mia. We have now expanded the IRB series to a 100 patients. We hope that we can continue to prove what we have seen with the initial 30 patients. We are also looking at the longer-term outcomes with the patients from Japan. So, all of that together creates a really good atmosphere for a potential product launch in early 2022.

Marie Thibault -- BTIG -- Analyst

Okay, perfect. Last one from me then. You gave us some nice numbers around the split between direct and distributor, sounds like it was almost about half-half, this quarter. Wondering if there is anything to look to in terms of lumpiness from the distributors this year, any sort of cadence we should be thinking about, and then any change to your outlook and taking some of your markets direct. I know in the past that you've taken various countries direct, so whether we should continue to expect that here in 2021?

Renee Gaeta -- Chief Financial Officer

Yeah. The results from the year and even in the last quarter, especially that back half of 2020 was pretty consistent with what we've seen and how we expect it to sort of go going forward, that 50-50 split on direct versus distributor is where we will likely be fluctuating quarter-to-quarter, that's where we're at. And until we really see geographical expansion into China and U.S., that's what we're predicting for the future.

Marie Thibault -- BTIG -- Analyst

All right, very helpful. Thank you again.

Renee Gaeta -- Chief Financial Officer

Thank you.

Operator

Our next question is a follow-up from Anthony Petrone with Jefferies. Your line is open.

Anthony Petrone -- Jefferies -- Analyst

Thanks. Just a quick one on Mia pathways clinically, I'm just wondering when you consider the IDE secured for in the original U.S. study, is that the same sort of protocol we should be expecting? And the original U.S. study is 750 patients. So, I'm just wondering if that's sort of the size and sort of make-up between revisions and augmentations, so we assume a similar study approach or will it be a PMA supplement to that original data? Thanks.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Yeah, thanks Anthony. Just a reminder that Motiva MIA at this point is for the aesthetic indication only. Regarding US potential approval pathway, our initial thoughts regarding this are of a PMA supplement. So, that's how we plan to approach it. It's a little bit early to be having those conversations directly with the FDA. But I think when the time comes, we would like to confirm with them that that's the appropriate pathway for MIA. But there are many good reasons including what we have done in other high vigilance countries with MIA, and that could be a good precedent for what we do with the FDA.

Anthony Petrone -- Jefferies -- Analyst

Thank you.

Operator

That is all the time we have for questions today. I will now turn the call back over to Juan Jose for closing remarks.

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Thank you for joining us on today's call. We look forward to providing our next quarterly update in May. We wish you a very good day and continued good health. Thank you.

Operator

[Operator Closing Remarks]

Duration: 50 minutes

Call participants:

Raj Denhoy -- Head of Strategy and Investor Relations

Juan Jose Chacon-Quiros -- Chief Executive Officer and Founder

Renee Gaeta -- Chief Financial Officer

Anthony Petrone -- Jefferies -- Analyst

Josh Jennings -- Cowen -- Analyst

Chris Cooley -- Stephens -- Analyst

Matt Taylor -- UBS -- Analyst

Philip Coover -- Goldman Sachs -- Analyst

Marie Thibault -- BTIG -- Analyst

All earnings call transcripts

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