Q4 2019 Earnings Call
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Thursday Thursday
Good day and welcome to the vivre full year 2019 Financial results conference call all participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero speaking today are vivi's chief executive officer Scott Durbin Swindle senior director of corporate Communications, please note. This event is being recorded. I'll now turn the call over to Swindle operator and welcome everyone Thursday. We begin we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company in a statement that is not a state law of historical fact is a forward-looking statement. This includes remarks about the corporations projections expectations plans beliefs and Prospects. These statements are based on Jeff.
Instant analysis, as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual facts to differ materially from those described in the forward-looking statements these risks and uncertainties are described more fully in the company's annual report on form 10-K and other filings made with the SEC which are also available on the company's website any forward-looking statements represent Management's views only as of the date of this conference call and should not be relied upon as representing management views as of any subsequent date would I would now like to turn the conference over to Scott Durbin our chief executive officer?
Thank you. Jeannie. Good afternoon everyone and thank you for joining us today. I'd like to begin the call today by reviewing some of the transformational activities of 2019 including our us commercial shift to a recurring Revenue model and the significant advances in our sexual function and stress urinary incontinence clinical and programs throughout my remarks. I will speak of to some of our more recent progress and provide a high level review of our financial results for last year and I conclude with a perspective on our business going forward to begin the change to our us Commercial Business from a capital sales model to a recurring Revenue bottle made on June of last year has been extraordinarily successful. The Strategic intent of the change in commercial model was to increase physician adoption rates of Aviv system birth.
Dusing upfront costs and there.
By reducing barriers to entry or adoption the effectiveness of the new sales model was demonstrated throughout the second half of 2019 and resulted in an increase in number of systems placed per sales rep in the United States. In fact productivity per sales rep double throughout this period at a lower per customer acquisition cost between June of 2019 and December 2019. We acquired a t for new customers in the US with only six sales reps. We believe this model and the result in sales rep productivity clearly demonstrates the opportunity for greater long-term Revenue per customer lower selling cost per unit placed improved from consumable sales more predictable quarterly and annual sales growth and improved profitability, which at scale We Believe will lead us to cash flow break-even dead.
In addition to the shift to the new commercial model in early 2019. We undertook a strategic organizational realignment which contributed to a reduction in total odd breeding expenses in the first quarter of 2019 and additional operating cost savings throughout the remainder of the year, the restructuring included a reduction of approximately forty full-time employees and aligned our organization around supporting the new commercial model in the United States. We launched an expanded Suite of customer services now support new sales model and have been extremely effective and well-received by customers. These programs are designed to enhance the success of new and existing customers offering them the treatment and include a specialized customer care team the university and practice development marketing support.
Well the change to the recurring Revenue model in the US was a massive transition from an organizational and financial perspective. We're extremely pleased with the results through 2019 a total revenue for the year ending December 31st. 2019 was approximately six point six million dollars from the global placement of a hundred and thirty-seven systems and the name of approximately 7850 tips of the total hundred and thirty-seven V Systems placed worldwide in 2000. Nineteen eighty two were under the new recurring Revenue model and nearly 45% of global tip sales were in the United States total revenue for the fourth quarter of 2019 was approximately 1.5 million dollars from the global placement of 35 systems and the sale of approximately 1985 treatment tips dead.
We believe we will continue to Demeter.
Straight the growing success of this new US model going forward as we further Drive sales growth and better profitability.
Moving to our international business Commercial distribution remains unchanged through the network of distribution Partners as previously reported new distribution partnership agreements were secured last year one for Canada and a second exclusive distributor agreement for Hong Kong China Macau with Paragon meditech as part of our previously described strategic organizational realignment our International focus in the second half of last year and throughout 2020 will be predominantly directed to a growing belief system sales in key regions while supporting existing Distributors and customers and other Global markets.
Also in 2019, we achieved several significant regulatory Milestones with clearances and launches of our next Generation the 2.0 technology platform and key Global Market the believe 2.0 manufactured by new large-scale manufacturing partner, and it's consumable treatment tips have a significantly reduced cost to manufacture. Our first generation system and is projected to have a positive impact on overall gross margins going forward in December of 2019. We announced registration page in South Korea by the Korean Ministry of Food and Drug safety of the 2.0 system. Also in December, we we announced a successful launch in China of our next-generation platform wage with our new partnership with Paragon Medtech.
Mid year 2019 but even announced FDA 510 K clearance in the United States are the 2.0 system and treatment tips. We believe this regulatory clearance represents another confirmation of the safety profile of a veves cmrf technology platform proceeding these clearances in April 2019. But even now marked off for the 2.0 platform in the European Union and European economic area countries the Next Generation system and treatment tips are currently available in over thirty countries in Europe.
But these are ongoing strategy continues to be the aggressive pursuit of regulatory agency clearances to expand the commercial availability of our next Generation cmrf technology platform consumable treatment tips, as of year-end 2019. The belief system is now cleared for marketing and fifty-seven countries around the world.
On the clinical development side, there were significant advances achieved in 2019 in our pursuit of label expansions for sexual function and stress urinary incontinence or SGI. The advances have continued into twenty-twenty as we have recently announced the vivre to our Landmark pivotal clinical trial for his sexual function and women completed full enrollment in March of last year as reported the investigational device exemption or IDE to conduct this multicenter of randomized double-blind sham-controlled trial was submitted to the FDA and September of 2016 and approved by the agency in March of 2018 off the trial was initiated later in in that year in May and advanced through the agencies required staged approach that included multiple submissions to the FDA to review page.
should safety data at thirty and
90 days post-treatment for a defined number of subjects enrolled in the trial the stage-door Gated approach to Patient enrollment and the agency's review of the safety data at the specified time intervals was completed in December of 2018. The FDA had determined that the company had provided sufficient data to support continuation of the trial and there were no safety concerns that precluded the continuation of the study too full enrollment.
And just recently on March 12th, 2020. We announced completion of the trial all subjects, 12 months follow-up visits had been completed the V6 long and arduous journey is a testament to the these commitment to rigorous clinical science and steadfast pursuit of a US label for improved sexual function and women Off Top Line read out for this Landmark trials targeted for April of this year and if positive could support a marketing application in 2024 a new life commercial indication and the importance of this trial cannot be overstated an estimated twelve to fourteen million women worldwide suffer from diminish sexual function following vag childbirth who are candidates for our single session cmrf treatment and represents an estimated $68 billion dollar total available. Consumable Mark.
opportunity
with respect to our sui clinical program. We are encouraged with the progress we've made and the advances that are currently underway on the heels of the positive yet inconclusive results of liberate International reported in August of 2019. The thieves submitted an investigational testing application or ITA to the Canadian Ministry of Health in September. I received approval of the and December of 2019 and quickly initiated the trial in January of 2020. The three armed three months feasibility study Compares our cmrf treatment and a cryogen only sham to an inner champ treatment for the Improvement of sui and women enrollment in a trial was completed and announced in early March of this year in the short-term feasibility trial read out is targeted for the third quarter of 2020 and may provide us a strategic path forward.
In our pursuit of global label expansion and importantly an estimated twenty-five to Thirty million women worldwide are bothered by symptoms and leakages associated with sui representing a ten to twelve billion dollar total available consumable Market opportunity.
Is it the end of 2019 we've had a global installed base of 840 systems and had sold over 41,000 consumable treatment tips our international business continues to show strength and with the continued success in the US of our recurring Revenue rental model. We are demonstrating greater long-term Revenue per customer lower selling cost per unit placed and improve revenue from consumable sales, which we believe will lead to more predictable quarterly and annual sales a growth combined with continuing advances in our clinical development programs and upcoming trial readouts. I believe that the vivre and the incredibly talented team of employees consultants and advisors dedicated to our vision around the precipice of more broadly advancing the science and Commercial opportunity of women's intimate health
View moves forward through 2020 we continue to have four core areas and strategic Focus.
First continue to advance the success of our commercial efforts and continue to focus and improve our network of distribution Partners internationally second job more efficiently the result of our organizational realignment in 2019 has significantly reduced our operating expenses and cash burn and these efforts will continue to wage divide Financial benefits throughout 2020.
Third continuing to increase physician and patient awareness of the safety and proven efficacy of our cmrf technology and clinical data and finally fourth continuing our clinical and Regulatory progress towards additional indications in sexual function in the United States stress urinary incontinence in the United States and not internationally as a result of these dedicated efforts. We have major near-term clinical Milestones forthcoming of great significance that toppling results read out from our two Landmark sexual function trial in the US in April of 2020. And in the third quarter of this year the readout of our short-term three armed sui feasibility study.
Before closing the I feel compelled to comment on the current coronavirus pandemic first and foremost Aviv is concerned about the health safety and well-being of our employees customer distribution Partners investors and all with whom we are directly or indirectly engaged. We are committed to protecting our employees health and providing information. And God says we diligently monitor the status of this evolving pandemic to date the situation related to covet 19 is not changed our goal to advance our commercial and clinical development efforts believe has been in regular communication with our manufacturing partners and suppliers to help ensure the health of their respective employees and operations. We've established and taking necessary steps to help ensure the continued and uninterrupted supply of inventory our operations and quality service to our customers we wage.
Continue to monitor the needs of our customers and adapt our standard operating procedures as needed to address any changes that may occur our hope is that the code 19 Panthers is effectively addressed as quickly as possible to stop and prevent continued mortality and morbidity risks operator. This is the end of our prepared remarks and we thank everyone for participating in our year-end conference call today.
The conference has now concluded thank you for attending today's presentation. You may now disconnect.