Q4 2019 Earnings Call
[music].
Good evening, ladies and gentlemen, and welcome to the fourth quarter fiscal year 2019 earnings conference call for few years medical technologies.
At this time all participants are in place in listen only mode. Please note. This conference calls be recorded and that's a recording will be available on the company's website for replay shortly.
Before we begin I'd like to remind everyone that a remarks and responses to your questions. Today may contain forward looking statements are based on the current expectations a management, including statements regarding the potential FDA marketing authorization or the pause device. The success of the company's claims study the future commercialization of the punch treatment expected future clinical and regulatory timelines.
The potential receipt of regulatory clearance upon device in the United States.
Projected financial results. These forward looking statements involve inherent risks and uncertainties that could cause actual results to differ materially for most indicated including those identified as a risk factor section of our most recent annual report on form 10-K as was our most recent 10-Q finally, such factors may be updated from time to time in our filings with the FCC, which river.
Well bore website all statements made during this call or as of March 12, 2020, we undertake no obligation to publicly update or revise our forward looking statements as result of new information future events or otherwise except as required by law.
I'd now, let's turn the conference over to Mr. filter Sean.
He leaves Medical's Chief Executive Officer. Please go ahead, Sir Thank you Kevin.
Welcome everyone to Helios Medicals fourth quarter and full year 29, <unk> earnings conference call.
I'm joined on the call. This evening by Joyce Labite Count, our Chief Financial Officer, and Chief operating officer, and by doctors that vendor Calfee, Ryan who is an affiliate scientist at the height Research Institute the research arm of the Toronto Rehabilitation Institute and a member of the University Health network or you age.
Let me provide you with a quick agenda for todays call.
We will begin by having Dr. casualty Ryan provide you with a brief overview of her experience with our ponds technology and its potential role in the treatment of neurological condition.
I'll, then review our fourth quarter fourth quarter revenue results and the operating progress that we've made during the quarter and in recent months, including updates on our early commercialization progress in Canada as well as our regulatory strategies in Canada and the U.S.
Joys will discuss our force fourth quarter and full year financial result in detail and review our guidance for 2020, which we introduced in our earnings press release earlier this afternoon.
Ill then provide a few closing thoughts before jointed eye open it up for the call for questions.
With that let me turn it over to Dr. Kelcy Ryan over Q.
Hey, good afternoon. Thank you for the opportunity to speak about my experience with Paul.
My name is defender Kelcy, Ryan and I am in affiliate scientist at the Kite Research Institute in Toronto, Canada, as well as assistant Professor in the department of physical therapy at the University of Toronto.
I am a physical therapist by training and have worked in the delivery of rehab to neurological patients for approximately 25 years.
Hi is a part of the University Health network and part of the largest rehab Institute in North America.
The Kite Research Institute is a driving force in rehab research worldwide.
My role at the height Research Institute is to work at the intersection of Discovery Science marketing and commercialization with an emphasis on implementation an uptake of new technologies.
My particular research interest is neuromodulation in the restoration of upper limb paralysis after stroke traumatic brain injury in spinal cord injury.
The clinical and scientific lead of the rocket clinic, where we offer innovative therapies to patients not yet to two patients that are not yet adopted by the publicly funded system as well as ive running an active clinical research program, where we study implementation science knowledge transfer of into intensified therapies, coupled with Neuromodulation.
[noise] I represent kite within the current partnership we have with serious medical Inc. and my role is to understand the ponds experienced the product and determine how best it can be delivered to the patients that can benefit the most from it.
Essentially how can we optimize the use of this product within our current patient population and health care system.
Within our rehab Institute there is a great deal of concussion and TV I research ongoing and a strong recognition that there is an unmet need for patients outside if the globally funded program.
As well as within.
We're certainly aware of the gap for T.I.T.V. I patients and have a strong commitment to optimizing their access to novel and successful we have opportunities.
We see the ponds as a novel and potentially effective treatment opportunity not only for TV I patients, but for many others, who suffer with chronic Kate in Dallas deficit.
Hi, just become involved with healthiest medical inc. by participating into projects.
One is a clinical feasibility program, where Helios has.
It's supporting the administration of therapy to six individuals. So that we can have an experience with the product before embarking upon commercial distribution of the therapy.
This clinical experience program alone has fostered to private clinics to become commercial distributors and garner familiarity with the technology with a third clinic seeking out the commercial opportunity.
Right. So far has been flooded with patients clinicians and caregivers seeking the opportunity to receive the ponds treatment. At this time, we have enrolled six individuals into our clinical feasibility program and treatment is being delivered at three separate locations in the greater Toronto area.
Hi has created a unique model, where we are a publicly funded institute and have built take collaboration with three reputable price reputable private nor are we had clinics to deliver this program.
It has been a great success, so far and has fostered much interest in this novel therapy that we are very excited to be working with.
We are extremely happy that we are now able to deliver a new therapy and experience for ourselves the opportunity that we can deliver to our patients.
The second project, we are participating in with you is is to confirm the superiority stimulation coupled with their peak to therapy alone. We're very excited to work on the study as the data for intensification of therapy, coupled with stimulation is extremely compelling.
Our experience with the products. So far has been quite positive we have had many referrals to the program, which indicates that there is a definite gap for people suffering with Dallas impairments.
There are conventional options. However, I do not think theres anything like this on the market in Canada or the U.S. at the moment.
The time is now healthiest is ahead of the Epidurals stimulation and Transcutaneous markets at the moment the expansion of the label at this time is key in order for ponds, Tim stake its claim in the field of neurological rehab.
As mentioned, we had kite have a great deal of experience with the discovery Science and then moving technology forward into the commercial area, we see immense promise with the pawns. It is already health, Canada approved so it is available commercially while it is still being studied this allows for access to the innovation, which will define.
In the neuro rehab world.
Coupled with an intensified rehab program that has proven to be beneficial to chronic patients. It is delivered by trained clinicians. It requires no implantation it is safe and deliverable by rehab specialists.
Access to the technology is not arduous therefore by making rehab specialists the brokers of this technology.
Entry into the clinical practice and the market will be much less challenging than previous to similar technologies.
[noise]. Thank you very much Dr. Kelcy, Ryan we really appreciate Youre your insight with respect to your experience with pawn [noise].
I'm going to turn to review of our fourth quarter revenue performance now we reported total revenue of $152000 for the fourth quarter 2019, compared with $478000 in the prior year period.
Our revenue in the fourth quarter of 2019 was driven by sales to clinics that had been authorized to provide our ponds treatment in Canada, representing approximately 100, 100% of the total revenue in the fourth quarter of 29 team compared to approximately zero percent of the total revenue in the fourth quarter of 2018.
As a run as a reminder for the reason for that our revenue in the fourth quarter 2018 was comprised of license fee revenues related to the strategic Alliance agreement between help that connects and our wholly owned subsidiary and their wholly owned subsidiaries your Canada or Shira.
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Operational progress in Canada.
[noise] for anyone on Tonight's call, who is new to our story our ponds device represents the first and only device authorized and commercially available in Canada for the treatment of chronic balance deficit due to mild to moderate traumatic brain injury.
Or mm PPI.
During the fourth quarter, we authorized P. three health, a leading health care facility located in downtown Toronto to provide ponds treatment and and ended the year with a total of seven authorized clinic location exceeding our goal for the year.
We also continued to make enhancements to our commercial strategy in Canada, which were informed by the feedback and experience gained during the early commercialization of our ponds treatment in 29 gene.
We believe the enhancements of our commercial strategies leave us better position to drive improving adoption of this innovative technology in twentytwenty.
Recall that we began the commercialization of our plans treatment in Canada in March 29 team through our partnership with Health Tech connect and together, we created the hero, Canada operating entity, which was responsible for identifying authorizing and training the initial clinics in Canada to provide treatment.
We learned over the summer and early fall that we needed to evolve this business model in order to directly drive our Canadian commercialization.
So on October Thirtyth, which we acquired hero, Canada operating entity from Healthtech connect.
As discussed on our Q3 earnings call. The acquisition of Zero, Canada has provided us with complete control of the marketing and sales function in Canada, which we believe which we believe will better position us to improve our process for identifying authorizing and training new clinics, while increasing the pace of the dog.
Option of our ponds treatment over time.
As part of our decision decision to shift to a direct sales model in Canada, We hired an internal leadership team based in Canada to drive our commercial activities going forward.
The team is headed by Mark Lino, our new VP of operations in Canada and includes a commercial manager a reimbursement manager and two key employees from hero.
After conducting additional market analysis and field intelligence, Mark and his team began developing our and our new approach to expand the number of authorized clinics and in turn to increase the adoption of our ponds treatment in Canada.
A key enhancement to our new commercial strategy in Canada is based on refining the criteria for targeting the clinics, we authorized to provide ponds treatment.
Specifically, we're now targeting clinics that fit the following criteria.
First they have to have a large existing commercial focus on strictly neuro rehabilitation.
For two they have to have an established referral network with other medical facilities for the treatment of patients with neurological conditions.
And three they have to have significant reimbursement experience and payer relationships with respect to neuromodulation treatment.
Our initial focus has been the development of the clinic system in Ontario, given the population density in this region a proper approximately 40% of all Canadians live in Ontario.
We're very pleased with the traction we are seeing as a result of this new commercial targeting effort in the first two months of year 2020, we authorized seven new clinics clinic locations, bringing our authorized clinic like network to a total of 14 clinic location that will provide ponds treatment. We are currently.
Focused on helping.
Our.
Our recently recognized and authorized clinics to become fully operational so in the first two months of this year Weve authorized as many clinics as we did all of 2019.
I want to highlight one other key enhancement to our commercial strategy in Canada that was introduced for 2020.
We modified our pricing model based on market feedback from clinicians and patients throughout 2019, the new pricing model is intended to reduce the upfront costs to win fence patients to initiate treatment initial feedback from clinics and patient. So far has been very very positive.
In tandem the enhancements to our clinic targeting is expansion strategy, we continue raising awareness of ponds treatment by pursuing several marketing initiatives first we continued to pursue our digital marketing efforts to raise awareness for our treatment among patients desired trust and physical therapist and to generate referrals to our network of.
The rise clinics.
Specifically, we updated our Canadian website ponds treatment dossier and continued to develop our marketing on social media sites by creating new content for patient for potential patients and the broader traumatic brain injury community.
And second we also continue to leverage our medical affairs specialists to raise awareness among key opinion leaders like Dr. Kelcy, Ryan industry associations and advocacy groups. We're focused on collaborating with major concussion focused advocacy groups in Canada to promote the ponds treatment to their membership and their conferences and.
Events.
We are continuing to gather data.
On patient adherence and treatment outcomes as part of our strategy to generate the requisite support demonstrating the quality of life and health economic benefit of our ponds treatment.
As I've shared with you on other prior calls we've been very pleased with both the adherence to treatment outcomes for patients treated that our Canadian clinics throughout 2019.
This positive trend continues in 2020.
We believe the strong patient adherence and the improvements in balance and gate that are consistent with the results of our two clinical trials in MTB pie and based on this gather data we have produced a value dose Jay which analyzes the return on investment for insurance for insurers after the ponds treatment and we began to do.
Deploy that dose CA in our conversations with Payors and as a reminder.
Our reimbursement strategy in Canada is initially focused on obtaining coverage for ponds treatment from workers compensation payers.
And auto in long term disability insurance payers.
While this is generally a multiyear process, we're very pleased with the developments and the progress to achieve this goal, especially now that we have the data to be able to show the ROI.
Turning on an update to our regulatory strategies. This is a really important part of our conversation because it represents quite a significant change.
Beginning with Canada during the second half of 29 team, we began to pursue a label expansion for our ponds device for the treatment of gate deficit caused by multiple sclerosis or MMS.
With approximately 93000 individuals living with M.S. in Canada. This label expansion will significantly increase our addressable market opportunity.
As I messed is a progressive an incurable disease. We also believe that this patient population is highly motivated to evaluate and pursue treatment that can lessen the severity and delay the progression of their symptoms but.
For these patients are ponds treatment represents a novel approach the therapy with the potential to improve or restored later date function or in other words help their ability to walk.
We're pleased to announce the submission of a Canadian class to license amendment application for the treatment of date deficit in patients with mild to moderate mass.
Symptoms on February 27, 2020.
This application to health, Canada was supported by data from our peer reviewed published clinical studies focused on M.S.
And the real world data from patients treated in Canada, a gathered on our valid in our validated database.
Specifically, our Canadian some submission included positive clinical data from our peer reviewed published data in MF, showing a clinical a clinically and statistically significant results in a comparison of PT plus active ponds versus PT versus a placebo or.
Non stimulating pause.
With the statistical significance of P equals 0.005, and real world that gathered real world data, rather gathered in Canada, which demonstrates a clear statistical significant improvement and gate function and 39 patients treated in Canada. We've included a summary of these data in our 10-K.
Filed this afternoon for those interested in more detail.
Turning to an update on our us regulatory strategy.
As we announced in our strategic update press release on March 2nd based on the quality of this data included in our M.S. submission package in Canada, we've decided to prioritize vms indication as the pathway to pursue our first us de novo clearance of the ponds device.
The principal reason for this important decision is the large patient population in the us with nearly 1 million people estimated to be living with them as according to the amass society.
Additionally, the FDA has deemed this disease with a high unmet at this disease with a high unmet medical need and has approved the drug called Ampyra to increase gates speed for patients with M.S.
Our data, although not exactly the same compares very favourably to this already approved therapy.
So with all these factors to consider can stick to consider we believe our data are sufficient to demonstrate a favorable risk benefit profile as required by the denovo pathway.
Thus this became a more effective and efficient pathway to gain our first clearance for ponds technology in the U.S. and as previously indicated we expect to submit for de Novo classification for him as in the us in the second half of 2020.
Turning to an update of our application for the de Novo classification of ponds device for the treatment of chronic balance deficit due to MTB pie.
We made considerable progress since the since we last updated the investment community. However, the pace of this progress was longer than our team originally anticipated.
We had a pre submission meeting with the FDA in October 2019, which provided us with an important feedback to the potential design of a new clinical trial intended to address the FDA feedback from our first submission in the spring of 2019, which included a request for additional data demonstrating the benefits of the.
Ponds treatment compared to physical therapy alone.
In January 2020, we received the MD. The FDA is final feedback on the minutes from October pre submission meeting.
This included post meeting notes with additional and very specific recommendations regarding the design of the new trial.
We have since incorporated these recommendations and finalize the design the design for this new trial, we call TB double to which will be used to support our new request for de Novo classification for the MTV.
PPI W. Two will be a multicenter randomized trial in the USA and Canada, consisting of 103 subjects with balanced deficit due to MTB API. It will proceed in two phases are running phase followed by a treatment phase during the running phase all subjects will receive five weeks.
The physical therapy alone subjects will then be randomized and assign to one of two groups in the treatment phase where they will either receive up to 10 weeks the physical therapy with the ponds device or up to 10 weeks of physical therapy without the ponds device. The prime a free the primary effective endpoint will be a responder analysis.
Based on the design of the TV I double low to study we estimate that this trial will cost approximately $6 million approximately half of which will we expect to incur in 2021.
We have completed the revised protocol and have Sir you circulated the clinical trial sites for IR be approval, we expect to begin enrollment in April of this year and are targeting the submission of our application for de Novo classification for the FDA for MTV and the second quarter of 2021.
Given the estimate of the cost of the trial. We're currently evaluating potential sources of funding to continue to execute this trial in the interim we're prioritizing our submission to the for the de Novo clearance of MF and I will.
As an eye and as I mentioned earlier, we intend to submit for this indication in the second half of 2020.
With that let me turn it over to Joyce to walk you through our fourth quarter full year 2019 financial results as well as the review of our 2020 financial guidance joint.
Thanks, Phil we reported revenue of $152000 for the fourth quarter of 2019 compared to $478000 in the prior year period product sales represented approximately 100% of the total revenue in the fourth quarter of 2019 compared to zero percent.
Of the total revenue in the fourth quarter of 2018.
Product sales in the fourth quarter of 2019, we generated through the sale of that PON device pursuant to supply agreements with seven neuroplasticity clinic in Canada.
Basins and fee revenue represented zero percent of the sales in the fourth quarter of 2019 compared to 100% of sales in the fourth quarter of 2018 as a reminder, so licensing fee revenue in the fourth quarter of 2018 was a result of this strategic alliance agreement between CRL.
[noise] HPC.
Our growth.
Gross loss for the fourth quarter of 2019 was $156000 compared to gross profit of $478000 in the prior year period.
Operating expenses for fourth quarter of 2019 decreased 272000, or 5% year over year to 5.5 million.
The change in operating expenses was driven by decrease of $560000 or 28, 26% in research and development expenses.
The decrease in research and development expenses was primarily due to reduced product development cost.
The decrease in research and development expenses was partially offset by an increase of $224000 or 6% year over year in selling general and administrative expenses, primarily due to an increase in the severance expense over the prior year.
It is important to note that fourth quarter operating expenses reflect the continued benefits from our cost reduction initiatives, we've reduced fourth quarter operating expenses by approximately 11% compared to the first quarter of 2019.
Operating loss for the fourth quarter of 2019 was $5.6 million compared to operating loss of 5.3 million for the prior year period.
Total other income for the fourth quarter of 2019, what $294000 compared to $147000 in the fourth quarter of 2018.
The year over year increase in total other income was primarily driven by the change in fair value of derivative financial instruments, which was a gain of 80000 in the fourth quarter of 2019 compared to a loss of 221000 in the fourth quarter of 2018.
The change in fair value of the company's derivative financial instruments was primarily attributable to the change in the company stock price volatility and the number of derivative financial instruments being measures during the period.
For the fourth quarter of 2019, we reported a net loss of 5.3 million or 19 cents per basic and diluted common share compared to a net loss of 5.1 million or 21% 21 cents per share per basic common share and 22 cents per diluted common share.
There in the fourth quarter of 2018.
Turning to a brief review of our fiscal year end result for the full year 2000.
19 total revenue for the full year was 5.1 million that $1.5 million compared to total revenue of 8.5 million for the full year 2018 products sales represented approximately 97% of total revenue for the full year 2019 compared to zero percent of the total revenue.
For full year 2018.
Product sales product sales for full year 2019 was generated through the sales of the ponds device pursuant to a supply agreements with seven neuroplasticity clinics in Canada license and fever revenue represented 3% of sales for full year 2019, compared to 100% of sale Fleur full.
Full year 2018.
Operating expenses for the full year, 2019 decreased $2.5 million or 9% year over year to $24.6 million compared to 27.2 million in 2018.
The change in operating expenses was driven by a 1.9 million or 19% year over year decrease in research and development expenses, which was primarily due to reduced product development costs.
In addition, our selling general and administrative expenses decreased by 693000 or 4% year over year due primarily to the lower stock based compensation expense, which was impacted by that and that by the change in the companys functional currency in the second quarter of 2000.
In an 18.
Loss from operations for the full year of 2000 at full year 2019 was 24 million compared to a loss from operations at 26.7 million for the prior year period.
Total other income for the full year 2019 was 14.2 million compared to an expense of 1.9 million in 2018.
The year over year change in total other income expense was driven primarily by the change in foreign exchange gain and loss, which resulted in a gain of 14.1 million for the full year ended December 31st 2019, compared to a loss of 3.6 million in the prior year period.
Net loss for the full year 2019 was $9.8 million or 37 cents per basic and diluted common share compared to a net loss of 28.6 million or one dollar and 26 cents per basic and diluted common share for the full year 2018.
As of December 31st 2019, we had approximately 5.5 million of cash compared to 25.6 million at December 30, Onest 2018, we had no outstanding debt obligations in either period.
The decrease in cash during 2019 was primarily driven by net cash used in operating activities of $21 million and net cash used in investing activities of $769000, partially offset by 1.7 million cash provided by financing activities.
Yes.
As discussed on our third quarter conference call, we had an important strategic transaction during the fourth quarter on October Thirtyth 2019, we entered into a share purchase agreement with HTC, our commercial development partner in Canada to purchase Hero, Canada, Inc.
Under the terms of the agreement a total consideration of approximately 2.1 million in Canadian dollars or 1.6 million in us dollars.
Was allocated as follows.
A little more than half of the total consideration was for the repayment of HTC investment in heroes initial commercial infrastructure, including the establishment of five authorized ponds clinics across Canada, approximately 35% of the total consideration was related to the outstanding.
Receivable of 750000 Canadian dollars for exclusivity, which was signed as part of our original agreement in September of 2018.
Finally, approximately 25% of the total consideration was related to 55 ponds devices, which the company provided to HTC.
These amounts were partially offset by the sale of exclusivity rights granted to HTC to provide ponds treatment in the Frazier Valley in Vancouver Metro regions of British Columbia.
More details on the agreement and related co promotion agreement are available in our form 10-Q for the third quarter ended September Thirtyth 2019, and our form 10-K filed earlier this afternoon.
Let me now turn our review.
To our 2020 revenue guidance, which we introduced in our earnings release this afternoon.
For the full year 2020, we expect total revenue of approximately 2 million U.S. dollars.
For modeling purposes, the full year 2020, we expect to treat approximately 300 patients our revenue guidance assumes an exchange rate of one dollar Canadian to 75 cents U.S. dollar.
With that I'll turn the call back to Phil.
Thank you so much choice.
Okay. So stepping back it's pretty clear 2019 was a very difficult year.
Through the adversity however.
Oh, the 29 EFT as a 29 TNF da denial, we're really proud of the significant accomplishments. We made during the course of this past year.
Our team was successful in bringing our ponds technology to clinics in patients across Canada, and we were able to hone our commercial strategy as we better understand the dynamics of commercializing this innovative therapy.
We were able to develop another path to us regulatory clearance based on solid clinical evidence of efficacy and safety NMS.
Our team is focused on pursuing these opportunities as efficiently as possible and we look forward to providing updates on future progress.
Before we open it up the questions I'd like to close by thanking our employees for their exceptional effort and did and dedication in 2019.
I'd also like to thank our customers and stockholders for their support and those on the call. This evening for your interest in she us medical technologies I'm very thankful that you all have helped US provide this life changing treatments to people who needed.
Joyce and I are happy to turn it over to Kevin for the question.
Thank you.
Let's ask a question please signal by pressing star worn on your telephone keypad.
He for using a speaker phone. Please make sure that your mute function is turned off to allow the city victory truck equipment.
We do I see limit yourself to one question and one follow up.
Task.
She is we invite you to add yourself to the Q again by pressing Star Wars.
Well now take a moment with our participants to join the queue.
Once again that is star one.
Replace the question Q1 moment, please what we pull for questions.
First question today is coming from jump quarter from quarter capital. Your line is lives.
Hey, guys.
Hey, you mentioned that Theres, an approved and stroke I think you said, it's called Empire.
You compare and contrast, your data and safety with with the data that drug was approved with.
Certainly so empire is approved about four or five years ago was generating in the you asked about $700 million a year.
There their approval came on the basis of an improvement in what's called gates speed.
And so it's a measurement of your ability to walk the speed with which you walk 25 25 feet.
Their data showed that about 35% of the patient overall had about a 20% increase in their gates speed So fairly limited.
And the side effect profile was that the neurological drug was quite significant.
And the principal side effect in about 12% of patients was an increase in.
In in seizures.
If we compare that to the data that we have both from our clinical trials and and from our real world evidence about 57% 56.7 to be precise of patients had a response to to our treatment.
And for US we measure gate functions. So it's not exactly gates speed, but engaged function, we saw a 56% I'm sorry, 57% increase in in the functional capacity for your gate.
So so quite a bit quite a bit more and then the safety profile of our product after 42000 treatments.
Individual treatments, we've not seen any side effects related to the to the device serious adverse events of any kind.
And and so let me also add that when we looked in audited.
What the.
What other products had been approved through the same process. The data set that we have in MF is roughly similar to other datasets that have been supplied through the neuro division to be able to get approved and the biggest difference between this data set and the TV I dataset is right off the bat we have.
Statistically significant differences versus PT alone, that's what FDA was looking for.
And.
In in their ask of us to give them new data on the TV ISI, so quite significant differences and we feel obviously, a pretty good about our opportunity to to be able to get cleared.
Phil in in a five 10-K Denovo filing is they're part of this filing that allows you to two to bring to the FDA tension your data versus an approved drug out there as well as your data versus potentially any other therapies that have been up.
Proof.
Yes, indeed that will be part of the the preamble for four for our submission.
So that's that's all a fair game and that will be led by by our counsel, who has an enormous amount of experience dealing with this division.
It will you be able to utilize the safety said and all the manufacturing.
Parts of the the previous five 10-K filing for the TV I can you just kind of lift those sections and include them in this one.
Not quite Jeff what we have to do for the other sections as we have to make sure that everything that we had said for TV I before is also true for MF and that's why we it'll take us about three three or four months to to complete our filing because ultimately we have to compare and make sure that we process.
Actively compare human factors, if someone with him at similar to someone with.
With TV I and all of these kinds of things and then make sure that we update all of the files based on the experience that we have around the world and obviously.
I, mostly in Canada now.
And finally.
You mentioned that I think was February 27th you filed for label extension in Canada. What is the expectation of the timeline for your response to that filing.
So in a non corona virus world [laughter] supposed to be 15 days.
So I can only rely on on what our experience has been Jeff last time, our submission went in and two weeks later or 14 days later, we got cleared.
We submitted on the 27th.
We actually audited over the last couple of years.
In normal times, it looks a little more like 25 to 30 days.
But who knows with the with the Corona virus.
What what impacts that has if any we really don't know.
So our best guess is that but I've stopped predicting when a clearance is come through all I notice that we had a really strong.
Submission based on the the questions that health, Canada asked us.
Okay, and just the last follow up.
We're all aware that the addressable market for SMS is large.
Do you feel like up in Canada, assuming we get clearance is there that your pace of.
PT and patient adoption will be accelerated from what you experienced and TBR.
So here's a couple of dynamics that that we're looking at first of all patients with TV API and you know the therapy the treatment cost is quite high.
And and so patients with TV I know that next year, they won't be any worse theres no disease process going on there so essentially their patients a lot of them or patient, saying, hey, I'm going to wait for reimbursement.
The dynamics of NMS population are very different they know that next year.
Yes, there will be worse thought likely be worse off than they are today, Canada has the highest incidence of SMS anywhere in the world. So it has a really really well organized patients our patient support system advocacy and all of these things. So we believe that those dynamics are going to be better for that and then of course, we have the benefit of.
Of Montel, Montel Williams, who has amassed and.
We'll be able to go across the country and talk about finally talk about what what produced his recovery. So we think that those dynamics will certainly help us in in making sure that we accelerate things but.
Let me just to conclude with we do believe that the clinics that we just signed up with the new criteria.
We're also going to make a really big difference regardless of that dynamic.
Okay. That's it for me.
Thank you Jeff.
Hi, guys reminder, installed one to be placed him to question Q1 moment. Please let me pull for further questions.
Our next question is coming from Anthony let apart from them to management your line is allies.
Could you comment on why the increase in revenues for this year is only maybe 30% over the revenues for last year.
Since you have so many more clinics operating.
Yes, so so the way we're looking at that is the $2 million in the U.S. revenue guidance assumes approximately 300 patients will be treated when we compare that to 2019, we had 122 patients that were treated over over the course of the time on as we look.
And then the number of clinics the number of clinics has certainly increased it does take some time to get those clinics up and running in terms of being operational in general from a clinic perspective, there, they're usually booked about two months out so even once they get authorized it will take a little bit of time for them to work the ponds.
Treatment in and identify the the appropriate patients for the treatment.
The other thing from an overall revenue guidance perspective, Tony is is that our model we had a price reduction in 2020 and it's basically on what we're looking at is we're looking at $9500 Canadian for the ponds as opposed to it was closer to 14 down.
Isn't in the past so we have taken down our price we're treating more patients than we were and we'll continue to expand across but we really want to focus on the number of patients that are being treated as opposed to I'm looking at the number of clinics in clinic capacity and the rest.
Did you have a follow up Tony or.
To answer your question.
Well.
Hi, just.
It seems it seems to me that yeah.
When you get the clearance for M.S. are you also budgeting in those 300 patients treating people for M.S.
So are you, saying you won't trade anybody next year. This year. So right now since we don't have clearance.
We we don't count on on anything happening. So basically this is a forecast based on our clinics with our existing framework.
My question. If you just gave a guess this is not your official forecast, but you've indicated that people are having a greater urgency of.
Getting treated NMS speakers, so you're going to deteriorate if they don't.
You know Oh I guess.
If you get receive approval by the end of March let's say.
[music].
End of April that make too much difference.
What might revenues to be.
Addition, revenues be from this new area.
Look I feel much much more comfortable Tony and for everyone on the phone to make those predictions when we get our clearance and know exactly when it comes how it's going to come through and we'll update it as soon as that come through but right. Now just don't feel comfortable speculating, we havent been able to promote we don't know how people are going to come into the.
The system.
So there's too many unknowns right now to be able to give a it would be a wild guess.
Well so your wild guess is zero right.
Today It is [laughter].
It will be it will be different once we get our clearance well I hope the stock doesn't hit zero first.
What just second question, obviously is how you coming on financing.
So as healthy as he said that we had a $5.5 million in cash as of yearend, we expect to burn about $5 million through April and as we disclosed in our 10-K, we have cash to fund our operations into May and based on our can Uh huh.
Our strategic plan and what we're doing as we put an ATM in place in the <unk> first quarter of 2020, and we're thinking that our strategic plan has that we need about $17 million for 2020 with an additional $3 million to fund the TB.
Trial, so when we look at all of those pieces, what we'd like to do is we're evaluating that the different sources of capital we'd like to raise a portion of the 17 million that we feel that we need at a time rather than raising it all at once and we plan to execute our our plans to.
To deliver milestones so that we can create value during the year as we look to take additional funding.
And your milestones are to basically show about 2 million of revenue and get clearance in in Canada for M.S.
Right well, we think that the obviously the 2 million milestone is is a yearend on we'd like to believe that we're going to get our clearance for CMS.
And that would.
A signal strength with respect to our ability to get a regulatory clearance.
And then we expect that that would although we can't guarantee but we expect that that will give us a good response for our stock and try to do the the raised before then all of that will depend on the timing of course of Vms indication when when we hear from health Canada.
Thank you.
You bet.
Thank you once you have that star one could you. Please the question Q. Our next question is coming from Randy Hager private Investor Your line is allies.
Sure Yes.
Yes, good afternoon.
Oh, great updates actually my question was the same as last callers. It was just curious about.
What the funding strategy is you know in more and.
What's your kind of what your monthly burn is at right now.
I think there was.
Additionally, answered by the previous.
Color so okay.
You know I get kind of trying to.
You know rage capital and tranche as you move forward I think obviously, that's really only option at this point.
And this approval would certainly.
It would be helpful in.
In getting that done so.
You know all of a shareholders you've been through quite a roller coaster you know with some previous financings in obviously we've talked about.
What's up ahead and there is no certainty, but I think this new immense opportunity both here in Canada does give us.
Infinitely more upside potential to raise capital at some more meaningful levels than what we've had to do in the past. So I'm very encouraged by that and very thankful to hear that on the call today.
Thank you Randy we certainly are too and and I I get to to be the one that shares share that information and I just want to use this opportunity to complement our regulatory team and our.
And our.
Medical team.
It's all due to their incredible expertise and our outside advisor advisors that we were able to and not not the least of which is as joyce in putting together our real world. The validated database in Canada that allowed us to generate that data.
Without those things, we would not have been able to submit for our clearance for for M.S. So we're excited about in a very tough near as you said Randy that that we've we've tried everything we can to create value.
Great.
Thank you.
We reshaped about question answer session, ladies and gentlemen that does conclude today's teleconference. You may disconnect. Your lines as time and have a wonderful day. We thank you for your participation today.
Thank you. Thank you.