Q4 2019 Earnings Call
[music].
Greetings and welcome to the Bank business update conference call.
All participants are in listen only mode. A question and answer session will follow the formal presentation.
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I'd now like to turn the conference over to my Cabriolet director of Investor Relations for Pat Pat. Thank you. Please begin.
Good afternoon, everyone. This is Mike <unk>, let's director of Investor Relations.
Thank you all participating in today's business update conference call joining me today on a core Dr. Lee Shaunak log.
Chairman and CEO.
Dennis Mcgrath German.
Sorry, President and Chief Financial Officer.
Before we begin I'd like to caution call lets me.
During the call by management will contain forward looking statements regarding the operations of future results med.
Okay.
I encourage you to read the company's filings with Securities Exchange Commission, which identify specific factors may cause actual results.
[laughter].
Or events to differ materially from those described in the forward looking statements factors that may affect the company's results include.
They're not limited to the uncertainties inherent in research and development.
We didn't cost in time.
Quite advanced product regulatory submission wondering when products are cleared by regulatory authorities market acceptance products once clearly commercialized.
Companys ability to raise additional capital into competitive environment habit is nicely yet received clearance from the FDA rather regulatory bodies.
The market many of its products, new risks and uncertainties near rise from time to time or difficult to predict.
All these factors are difficult or impossible to predict accurately many of the beyond the company's control.
For further west description of these have important risks uncertainties may affect future operations. She part one.
I don't want entitled Risk factors Paddling, most recent annual report on form 10-K.
Yes, you see.
Any subsequent updates filed quarterly reports on form 10-Q [noise].
Except as required by law disclaims any intention or obligation to publicly update or revise any forward looking statement, what changes and expectations.
Werent events conditions or circumstances in which is expectations. They based they affect the white glove actual results could differ from those contained in the forward looking statements.
As you know we had just submitted our press release, which should be distributed shortly by our partner.
And that's a will be forthcoming with that said I'd like to turn the call over two we show an excellent talk directly.
Oh, Thank you Mike.
Good afternoon, everyone and thank you for joining us on this quarterly call to update you on our business and discuss our recent financial results.
Those of you would've been keeping up with our press releases know that we have been extraordinarily active in the months since our last update with many exciting accomplishments and even more milestones to look forward to run the upcoming but.
Let me start first with a few words about the enormous challenges we are all facing as a result of the covered 19 pandemic, which just a few months as exactly the tremendous human an economic toll on our industry our nation, there about or watch.
I hope and pray that all of your weathering. This.
Well level installed as best you can add or keeping yourself and your loved ones safe.
I'm deeply moves that many of you have taken the time to reach out West to express your support continued confidence in there as well as to express your concerns for safety and all.
Thankfully all members of the patent family, including our employees and critical partners are healthy safe and able to continue their important work.
We're very fortunate that our corporate structure.
Okay.
And culture are well suited to address these challenges with minimal short term and no anticipated long term disruptions to our strategic plan.
For example, our employees and partners are already dispersed over many states across the nation and are already profession.
Actively utilizing modern remote collaboration tools, which they've been doing since our inception.
In addition, our team has always embraced they sort of special forces type culture with all members able to operate a part of this thing when necessary and spontaneously collaborate to address short term challenges as they arise while still systematically advancing and executing on our long term strategic way.
Before providing you with updates on our product portfolio I'd like to give you. Our general summary, I've had each area of our business has four has not been affected by the pandemic and how we are responding for those that are affected.
First the financial and administrative perspective, as we previously announced Dennis Dennis will explain in more detail. Shortly we recently completed the November 2019 convertible note financing, which strengthens our balance sheet and enables us to fund our fall strategic plan for the foreseeable future as we advance.
True upcoming milestones real we're also confident that we'll be able to continue to finance our operations. That's required until we begin to generate meaningful revenue through commercial sales or non dilutive financing through M&A activities.
Our executive leadership team has implemented a cash management plan focused on preserving cash in areas where activities are inevitably throttled as a result of a walk down a full time headcount related me our employees and <unk>.
The unique expertise they bring to our efforts are understandably, our most critical resource that we do not plan to trend payroll. This makes us eligible for the paycheck protection program within the federal stimulus package. We have already completed the application. If approved will result in proceeds of approximately $300000 structured.
As a forgivable loan.
The product development and manufacturing site.
We currently utilized over a dozen partners across the U.S. and the design development testing and manufacture of our products.
All these partners are designated a social services remaining fully operational with no meaningful disruption in their activities on our behalf.
Our supply chain has also remained intact and we believe it will continue to do so without any construction. The only two components, we source outside of the U.S., our two electrical parts of our Capex device.
China, Although we already had sufficient inventory of these parts together through initial carpet commercialization. These manufacturers already back online following a short cobot 19 disruption earlier this year.
What about on the regulatory front, we with the help of our.
Regulatory consultants have multiple active engagements, but the U.S. after getting including for Karp export I O Isa guarded he said check. We also have extensive ongoing work with our regulatory consultants on other portfolio projects products that are not yet before the after <unk> am.
I'm happy to report that none of this work has been materially impacted by covered maintaining our regulatory consultants are fully operational using remote collaboration tools. You have to gave review worth the sorry for products are also working remotely and based on an ongoing informal communications appear to have the bandwidth to work on her Uh huh.
Some initial concerns that assigned staff would be diverted to cover 19 related work has not materialized. Most importantly, we have not receive any formal or informal indication that we should expect any covert 19 related delays in the review processes.
Two areas, where we have had to actively managed covered 19 related disruptions or commercial and clinical research activities.
Commercial side the fundamental challenges that we can essentially all medical device companies are currently facing is that the health care system is obviously overwhelmed by the pandemic.
The system has been forced to divert resources on drastically modify operations to care for covered 19 patients while protecting healthcare workers not not emergency care, including surgical in diagnostic procedures have essentially come to a standstill, although we can't predict when the engine will start up again, it is reasonable to assume that <unk>.
Noncovered 19 health care will be among the first things to come back on like since one cannot indefinitely deferred necessary <unk>, but not emergency procedures.
I will discuss our Isa guard commercial activities later, but I'm proud to report that's gone on Neil our Chief commercial officer and his team have rapidly adapted to the situation on the ground and pretty remarkable ways recruitment of indifferent of independent sales reps has been unaffected and their sales training has actually moved.
Virtual without missing a beat.
So if sales calls with physicians, who are Charles to be held virtually many of the target physicians artifact well positioned participated virtual sales calls because they are working from home or from their offices using telemedicine and I'm not that are not necessarily on the front legs of the covered by inching back.
They mentioned another area that were.
Managing is our clinical research activity life Sciences companies face the same challenges with clinical research activities as with commercial activity nearly all non covered related clinical.
Research has come to a grinding halt nationwide, including intramural academic research trials and corporate sponsored trials by large and small companies.
We have active or seem to be active clinical trials involving multiple products, including used to guard. He's a check at port I O, which are affected by this freeze I will update these individually but layer.
Although for the time being patients cannot be enrolled and procedures cannot be performed our clinical research team led by.
Randy Brown has done is simply a remarkable job of making sure that we continue to advance the ball, where we can so that we're poised to make up for last time when things have actually open up again for example, all of these studies we can for all of these studies, we continue to work with RBS on protocol approval and with medical centers on negotiating.
<unk> executing clinical trial agreements some principal investigators continue to actually actively recruit patients so they're ready to officially at all once you're back online.
[laughter], let's go through or some of our recent accomplishments.
In the upcoming activities and milestones.
Let me start by highlighting some of these in December our majority owned subsidiary Lucid diagnostics launched our Isa guard to suffer Jill DNA test as the first and only commercially available DNA test to facilitate the detection of Baird soft I guess with or without dysplasia as well as a soft you'll.
In January we launched two multicenter clinical trials to support future regulatory clearance of east regarding its a check as an after you get registered in vitro diagnostic or IB. The first patient was enrolled at under their procedures in February.
Also in January we held a successful pre submission meeting with the FDA Port I O product focused on the design of the clinical safety study in support of a de Novo application.
February brought many additionally, said accomplished because we're excited to receive ft breakthrough device designation for used to guard and he said check which in addition to validating their potential lifesaving impact provides priority expedited FDIC assessment and review and potentially accelerate its chemists coverage.
Turning to successful you sorry, we entered into sponsored clinical research agreements with two major academic centers. The Fred Hutchinson Cancer Research Center in Seattle, Washington, and the University of Pennsylvania, and Philadelphia to evaluate you said check in both Barretts esophagus project a progression as you said a philosophical writers we also.
The new product are you. So curious alphaville ablation device the disposable single use thermal balloon ablation catheter, which is designed to use our patented eldest technology to treat this plastic barents before it can progress there have you still suffer fuel cancer and to do so without the need for complex expensive capital equipment.
We also participated in two successful meetings with the Medicare contractor Palmetto cheap GBA and its Matt molecular diagnostics program Multek. One in February focused on Easter Guard payment at another two weeks ago focused on he said burn coverage.
In March the FDA accepted our five taste resubmission for carpets.
For a carfax middle invasive carpal tunnel advice incorporating data from our first success from our successful first in human carpet clinical safety study.
Also in March and he said check was honored as a silver winner of the 2020 Edison a worse. This month, we completed training of our first cohort of 24 highly experienced independent gastroenterology sales representatives covering a large swaths of the country. We're now actively engaging with one time physician partners on he's the guard and he said check.
Yeah, just yesterday, despite the pad that make it a massive regulatory backlog in Europe due to systematic changes we received a firm date in June for the stage, one audit of our quality system by our you'd notified body, which allows us to restart our efforts to pursue you CE mark clearance of carfax.
And port <unk>.
Finally, as always we continue to expand and advance our extensive intellectual property portfolio, which now includes 129 issued and pending patents, sorry or license department and its subsidiaries and we continue to have good successive securing allowances and advancing prosecutions.
We have many a key upcoming activities the milestones for for us to look forward to on a coming months here here a few highlights.
We expect to receive a response from the FDA or carfax five 10-K resubmission sometime during their 90 day substantive review window, which extends into June.
Despite the limitations imposed by Cobot 19, we will be accelerating in expanding our commercial activities for Isa guard, including virtual failed to professional education as well as aggressive marketing targeting physicians and patients to strengthened brand recognition generate awareness of underlying conditions and support the sale process.
We will continue to aggressively pursue our discussions with Palmetto GBA and the other Medicare contractors and hope to secure payment in coverage decisions for Easter Guards CPT code as soon as possible.
What's the covered 19 limitations to begin to be C., we will restart both our commercial.
Clinical.
I used to guard procedures and enrollment in our two Ivy de clinical trials will also launched four additional clinical trials involving used to check in Puerto Rico, which are currently on hold.
We also have several very active M&A and partnership discussions evolving next flow Isa guard used to check in disappear I wish I will describe in more detail later, but which we hope to consume in coming months. Finally, we hope we still hope to achieve a critical accuracy milestone and best Hot and animal testing of our majority.
Owned subsidiary Solus diagnostics noninvasive laser based blood glucose diagnostic device.
I'll now I'd like to now proceed to some more specific updates across our four divisions GE or help me like they had been resendes infusion therapy and emerging innovations.
Our G.I. Health Division is building a portfolio of complementary products designed to diagnose and treat conditions of the esophagus, including a spectrum of conditions are rising from product heartburn or gastroesophageal reflexes. These leading to a softgel cancer as well as it prevalent inflammatory condition called you said a philosophical riders.
Two products Easter Guard and he said checker commercially available we hope to commercialize another product. He so cure and 2021. In addition, there are other potential pipeline products, which are the subject of active research programs within this division, let's start with east regarding he said we continue to make excellent progress on these two groundbreaking product lessened.
Two years after licensing back from our partners a case Western Reserve Universe [laughter] used to guard and he said check our design to facilitate early detection of conditions, leading to a soft so cancer and patients with chronic heartburn.
Important to understand these that these conditions lie in the spectrum. So chronic heart burn can lead to benign changes in the surface south of the lower soft goods compare soft goods, which can transform into precancerous change is called dysplasia, which in turn could lead to highly philosophical.
Cancer.
These are truly groundbreaking product the national cancer Institute highlighted them as one of the year significant advances in cancer prevention and its 2020 report to Congress and as I mentioned, the FDA granted breakthrough device designation, which validates is potentially life saving impacts and he said check as I mentioned. It was also recently recognized as a game changing.
The nation and among the best New medical device products of the year by the Edison Award Sauntering common status.
To briefly how do they work you said check is enough to get cleared sell collection device, which can perform targeted and protected sampling of cells from the lining of the lower soft goods as part of a five minute noninvasive office space procedure. It serves as an alternative to an invasive upper adopt could be performed on area under anesthesia and hospital or dedicated.
Endoscopy Center used to guard is a highly accurate next generation sequencing.
Diagnostic assay, which detects methylation change the 31 sites on two genes, which occur in patients along that spirits esophagus through a softer Joe cancer spectrum, you stick artist performed that samples collected with these effect and as commercially available them in United States as a laboratory developed tests are all core LDC.
Although professional society got a practice guidelines recommend screening it over 10 million high risk patients to detect and treat barretts before it progressed as the cancer fewer than 10% actually undergo screening using invasive at upper endoscopy. The tragedy of these conditions is that the vast majority of patients diagnosed with its up you'll cancer.
Our not aware that they have underlying berets and that progression to cancer could be could happen prevented through careful monitoring and treatment. If the barrick's had been diagnosed earlier sadly over 80% of these esophageal cancer patients will die within five years of diagnosis.
Based on very modest penetration of U.S. incurred patients currently recommended for for bear screening. According to published guidelines and on a Deloitte market assessment. We commissioned we believe that the estimated addressable domestic market opportunity for these products with several billion dollars.
Most important to update for these products is on the commercial front.
We are commercialized the he used to guard using a hybrid model with internal sales management marketing and professional education working closely with independent sales representatives across the country and it's in addition to start Army all our Chief commercial officer, we've hired to a standing regional sales managers, covering the eastern and western U.S. and a fantastic director of marketing and.
Occasions as I previously mentioned last week, we completed training of the first cohorts. These 20 highly experienced sales reps that cover most of the country. They are all senior professionals, averaging at least a dozen years in the field, calling on physicians on behalf of wealth factors, leading companies in the space most brings deep long standing relationships with.
Gastroenterologist and their territories. They currently have access to their physicians through vertical sales calls despite the walk down and we're confident they will be first and why.
Once once things open up.
Several accounts have completed training product on the self performed procedures on patients before the shutdown of non emergency procedures, such that our sales teams have been in discussions with well over 100 accounts, who will be and an excellent position to begin performing procedures west things open up.
As I mentioned earlier, we have initiated an aggressive marketing campaign of the professional journals and social media targeting physicians and patients straight to strengthen he started Easter checks brand recognition.
Engagement with these activities has been excellent than the feedback has been very positive. We're also making solid progress on the reimbursement coverage front as you as I previously that's going to Isa Guard received a CPT code last year, we successfully advanced the through the CMS process, we were gradually the gaskill designation, which permits us to proceed with payment.
And coverage discussions with that designated Medicare contractors in private payers as I mentioned, we had two successful meetings with Palmetto GBA and multi X.
We're working with our consultants to finalize a detailed dossier in support of our payment coverage requests and look forward to discuss further discussion, culminating in a successful outcome.
There are many additional exciting developments in future activities in this division.
As I mentioned, we're excited about the progress we're making on the east secure ablation device.
This as I mentioned that of disposable single use thermal balloon ablation catheter, it's designed to advance through the working channel of a standard and the scope and uses our patented catalyst technology to blade yourself deal tissue.
It's clear to commercialize that you secure will allow clinicians to treat scholastic berets before it could progress to cancer and do so.
Without the need for complex and expensive capital equipment like occurring technologies for Medtronic and others do we expect to complete development and FDA five 10-K submission we secure by early 2021 and hope to have a commercialized layer that.
As previously noted we've launched these two international multi center clinical trials Isa Guard B U one and the two to support future Pmeight submission for Ft, a registration of Easter Guard and he said check as Ibds one of the studies as they screening study of high risk or patients and the other is a case control study of patients with known bears.
Or more advanced conditions, we have over 60 sites in the U.S. and Europe clinical trial enrollment has paused. After the first patients enrolled at under one procedures like last month, we have a couple of patients scheduled for later this month, but did not expect to be in full swing and still clinical activities resuming the coming weeks and months across countries.
Linear.
Meanwhile, our clinical research team is continuing to see or to secure I'd be approvals and complete contracts that we can make up for last time, some things up enough.
As I mentioned, we have two other additional Easter check clinical trials on hold the Fred Hutch, one and the one with.
Let's see University of Pennsylvania, and they are both we look for keep advancing those as things open up finally, we have two active partnership discussions involving she eye health products. We have a strong interest from an established diagnostic company outside the U.S. to performing market Isa guard in that region. We also.
I have been offered the opportunity license highly accurate.
You said it felt like us off which I joined us Biomarkers for a major academic medical center for commercialization has an LTAC I expect this license agreement to be consummated.
Let's move onto minimally invasive interventions that our capex product.
Carpets.
As our patent a single use disposable minimally invasive device designed to treat carpal tunnel syndrome, or reducing recovery times, the balloon catheter devices and started under the started ligament touched me get while pushing the nerve attendance away.
What activated bipolar radio frequency electronics precisely cut ligament from the inside out in a matter of seconds. We believe carfax will dramatically reduced recovery times compared to drift traditional open surgery targeting an estimated $1 billion.
Immediately addressable domestic market opportunity, we are seeking FDA five take a clearance to commercially market harp extra minimally invasive carpal tunnel release, you have to your recommended a clinical safety study to support flight activity submission and we consult to closely with them during the development of the study protocol.
As we've previously announced the clinical safety study was successfully completed and incorporate it into a five 10-K submission which is currently under 50 a review.
Briefly 20, carpal tunnel syndrome patients the new-zealand underwent a successful carpets minimally invasive carpal tunnel, where we all patients met the studies pre specified affected this endpoint, which was political device technical success.
Defined as the endoscopic confirmation of complete division of the transfers carpal ligament perfect can consistently cut the ligament clearly and precisely without evidence of thermal spread beyond the target tissue.
Procedure times fell after a short learning curve, indicating that the procedure can be fully formed and the same or less time as traditional open surgery.
Two weeks and 90 day post operative follow up rates were 100% at 95%, respectively exceeding the target 80% rate recommended by the FDA. The only lost a follow up as a patient who was documented to be back to normal with resolutions symptoms at six weeks. He opted not to return to the study site for is maybe they follow up visits because it.
Traveling a significant distance away it was overall satisfied with the procedures outcome.
All patients who completed follow up met the studies pre specified primary safety endpoint, which was defined as the Fife Vice safety with no I'm curious device related adverse events.
Patients under what additional pre specified outcome assessments at baseline and during post operative follow a visit.
[laughter]. These assessments used well establish standardizing validated measures to assess patient satisfaction as well as changes and symptoms motor and sensory function and neuro physiologic parameters following the procedure.
Excellent results of these pre specified outcome assessments fallen carfax were similar to or better than expected results from traditional open surgery.
Since the FDA, except that our five 10-K Resubmission application, we received some informal communications with them and look forward to there a formal response this quarter during a 90 day substantive review window, which extends into June.
No. That's a brief highlights from our infusion therapy Division, which includes portfolio next slow <unk>.
What I always our implantable etrasimod vascular access device, which allows direct access to the bone marrow to deliver medication fluids another substances.
We are seeking an initial short term and plan to racial indication through the FDA is de Novo pathway in January we participated in a successful pre submission meeting with the FDA focused on the clinical protocol for US a single for a small single center clinical safety study in New Zealand and all the target population in our proposal.
The short term clinical safety study as well as a long term study we had planned to performing Columbia South America, both on hold droid due to travel and clinical limitations and we're continuing with the necessary administrative work. So we can perceive immediately to training and enrollment once these.
Once things open up and we're also exploring whether it might be advantageous to move the clinical safety study to the U.S. as an I.D. study.
Our next slow infusions system.
That's a brief comment about that the system delivers highly accurate gravity driven infusions independent of the height of the I'd be bag and seeks to eliminate the need for complex and expensive electronic infusion pumps for most of the estimated million infusions delivered in the United States Each day.
We are successfully advancing the next one feature on Saturday design control development and testing with the goal of five to case submission later this year.
An exciting development that arose from M&A discussions with key strategic than the space has been an expansion of the applications using the that slows. It platform technology. These are applications that we could always contemplated and are now pursuing at the request of these strategic these applications include disposable infusion pumps for home use.
Package drug infusions military from applications and intravenous nutrition, our M&A discussions remain active with several large companies in the space and we look forward to consummating a deals as possible.
I wish I had more time to update you on exciting projects, we're working on it or in our emerging innovations divisions again, a few brief highlights our disappeared resorbable pediatric teams each were manufactured from accurate silk and seek to revolutionize the care of the estimated 1 million children, who undergo bilateral your two placement.
Each year.
We are very close to securing a commercial development and manufacturing relationship with a large multinational company, which is developed expertise in processing spoke for commercial use their technique allows the here it seems to be injection molded instead of machine, which greatly enhances the commercial potential of this product.
That was I briefly mentioned our in our subsidiary Solus diagnosis diagnostics, the research and development plan for our noninvasive laser based blood glucose monitoring technology is progressing very well and we expect to complete bench top in animal testing in the coming weeks.
Our emerging innovations team has also worked by several exciting products, including products in the Ecmo cardiopulmonary support and ventilation areas. Both of these areas are highly relevant to the treatment of covert 19 patients and other respiratory conditions will not pass them I got to Dallas for review our financial results.
Thanks, Lisa and good afternoon, everyone.
Brief as our financial results for the quarter can year ended December 31st 2019, where report our press release that was published just prior to the beginning of this call.
Our annual report on form 10-K will be available it FCC Dot Gov website early next week.
The complexities involved with accounting for the noncash charges related to our fourth quarter convertible debt financing, coupled with lawyers auditors consultants and staff working remotely maybe extension unavoidable.
You'll recall that even as late as just last week, we completed the second half of that remember 2018 financing, which we sent spoke to which also impacted the related registration statement that was filed in December and amended on March Thirtyth.
The elongated registration process was impacted in part by the Fccs availability challenges as they were working is at home as well.
Nonetheless, the financial results I will be providing today were consistent with the preliminary results reported on March Thirtyth as available to you and reported on.
Form Twelveb five a 25 extension filed at that time.
So with regard to the financial results research and development expenses for the fourth quarter of 2019 were 2.3 million.
Up from about 1.4 million for the same period in 2018.
About $700000 higher sequentially.
The year over year increase reflects incremental hiring chief Medical officer, Chief operating officer.
And engineer path med.
As well as clinical trial related expenses, many of which Lisa just went through a for carpets and particularly Isa Guard is the early setup costs for the IB de clinical trial began in earnest in the fourth quarter.
General and administrative expenses were 2.3 million sort of fourth quarter 2019.
Paired with 1.9 billion.
Same period in 2018.
Were higher by about 600000 sequentially.
The sequential increase reflects the financing transaction costs in the fourth quarter related to the November convertible debt sale financing the you're ever year increase reflects an increase in compensation related costs, particularly stock based compensation increased IP legal costs and an increase in investor relations activity.
That bed reported net loss attributable to common stockholders of 6.3 million or a loss of 19 cents per common share.
However, our press release provides substantially more detailed related to the noncash charges occurring in the current and prior periods.
Also the press release provides a table entitled non-GAAP measures, which highlight these amounts long with interest expense and other non cash charges like depreciation and stock based compensation the financing related costs.
Should enable you to have a better understand the companys financial performance.
You'll notice from the table that after adjusting the GAAP loss by these charges the company reported non-GAAP adjusted loss for the three months.
Ended December 30, Onest of 3.9 billion for about 12 cents per common share.
Have met had cash you of 6.2 million as at December 30, Onest 2019.
Subsequent to the year ended just last week. The company received net proceeds of approximately $6 million from the prepayment of the Investor notes received in the November private placement transaction with two institutional investors.
You will recall the company entered into a series B senior secured convertible note with each of the series a investors that gave us this option for an additional $6 million.
That's funding last week was in connection with these previously announced series B Investor notes.
Our cash balance at March 31st is approximately eight half million dollars and we're very confident that we will continue to have access to additional funding to finance, our ongoing operations as needed and of which we show has alluded to earlier in the prepared remarks.
Furthermore, as of January 2020.
We had kimberly pay down approximately 7.7 million.
Of the previous December 2018, senior convertible debt.
Which had an initial balance of just under 8 million.
At the outset and leaves the remaining balance of $50000.
So with that operator, we could open up two additional questions from our audience.
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One moment, please lobby poll for questions.
Our first question comes from the line of Anthony Vendetti, If the Maxim Group. Please proceed with your question.
Good afternoon Anthony.
And then Dennis good afternoon, Lisa Thanks, so much for doing the call and also for going over the cobot 19 impact across all facets of your business seems like most as well all of your business is continue to operate <unk> been operating.
They have had experience operating remotely so that that side of the business.
Teams.
Seems fine it's the commercial side that [noise].
And the delay some of the some of the trials and so forth, but that's a that's to be expected [noise].
Was wondering if you could just talk a little bit more about carfax. Obviously this is a resubmission. So you've had a lot of conversations.
Many conversations with the FDA over this time period [noise].
Do you I mean, it's it wasn't for heard the cold at 19 situation do you believe they would have needed the whole 90 days and with the current situation.
Is it is it's hard to gauge whether you think the grille take the whole 90 days to review or what [laughter] based on your conversations with them where where are they.
In terms of the review process.
Sure. That's that's a great question and.
Obviously.
Yeah, we have been <unk>, yeah, we have to be careful about predicting anything but I can make I can I can provide some some insights that you alluded to.
One of them is that yeah, we've been involved with the F.D. on this product. This is the resubmission as you know that.
And are what I didn't mention is that we have the same lead examiner, who was a very supportive of our application at the beginning so that was established we're fortunate to have that that's not guaranteed as you may now so yes. So the same people who work with us on that.
Upping, the preclinical testing and documenting the lack of thermal spread and the thermal safety the preclinical.
Selling and animals in cadavers, the same people, who worked with us to develop the protocol for the clinical study are now reviewing best as I mentioned, we don't really have any any sense that they're being affected by by the by the epidemic better pandemic excuse me there.
Receipt they've.
They they quickly proceeded with the acceptance acceptance checklist that I've mentioned, we've had some in form of communications that indicate that there that their deep into the weight of the application. So we've had no indication that there is a slowdown and we've always been hopeful that because now because it's the same group.
That because that because this is the resubmission that there would be an opportunity for things to move quickly, but there's no. There's no way, we can really predict that I mean this is the counter argument to that is that this yeah. We are submitting a clinical trial, even though it's small and there's 20 patients. It's a substantial amount of data and information that they.
Have to go through so I wouldn't want to presume that that.
That you know about that but the things will move more quickly than the other than normal, but I can say that I don't think were slow down by covet. We're very fortunate that we have the same group are going good.
And we've we've had some form of communications that indicate that.
They are well well into their said their deep into their review of the application on it.
No. That's that's very helpful. The Shannon and if he could just give a little bit more color on on Isa Guard in terms of feedback from 10 wells. During your initial commercial launch here, Todd how how's that going Oh, Yeah sure. I mean, you know it's been App I mean, this is going to sound.
Yeah. This is going to sell it surely this level that cheerleader asked a little bit, but it's not an absolutely remarkable I mean, the feedback has been excellent we have really solid people on the ground our eastern sales managers of as a long time veteran of the G.I. space and the people who are.
Or the independent reps Weve, who are already you know on the phone.
And they on email contact doctors are having these conversations and the conversations are going very well I mean, we have we have them well trained you know with objection handling handle all the various.
After the compensation take about.
How it relates to their existing enough about the business and so forth and.
The feedback, we're getting and I'm I receive a lot of <unk> is that people, but we get it they understand that theres an opportunity here to in March the funnel and to bring more patients that are not this group of sort of 90% of the patients should be getting screened or not we're not getting screened the is the way that stand the funnel and too.
Ultimately benefit patients and benefit there.
The the pack the some of the larger practices already have.
A subset of their physicians, who run a softer geo clinics, they run motility and ph clinic and you know any concern we had a bad for the where this would fit into within their practices, that's probably not material.
The feedback has been yeah, let's get started and looked at rolling in and get these patients them into the into these the into the clinic. So I really you know I really can honestly say the feedback been extremely positive and and once we once they're actually able to do procedures.
So the uptake <unk> to be pretty a pretty quick and substantial.
Yeah. So just.
Obviously, a commercial commercial launches is going to be stall, but by opening my team.
Pete.
Do you think there'll be some pent up demand as your.
Having these conversations Oh no definitely yeah, that's started right, but yeah exactly that's the point I was trying to get across which is bad but you know, there's there's still a lot of activity and because of the existing relationships of each of these reps. They are able to pick up the phone and talk to their to their to their most.
Hi.
Physician colleagues about this technology and begin that process. So all of that activity is is really done you know, it's somewhat affected but it's been proceeding pretty aggressively the only thing we can't do are actually procedures right and so I think the way you describe it is exactly right, but there will be pent up demand and that.
Yeah, we'll make up up we'll make up somewhat for last time because of the activities that are that occur the ongoing.
Okay, Great. That's that's great color I'll hop back in the queue. Thanks, so much appreciated and things like that.
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Our next question comes from offsets on that please proceed with your question.
Hi, Mike you definitely my guys nice.
Great.
I did very well just one quick follow up on let's see it out and do you guys have already stopped lined up.
Well give you can you know I you don't have to go into detail if there's something its competition, obviously, but any chance that it gets turning up running this he doesn't separate entity I mean.
Has there been any plans for anything we just want to you know obviously as many of the Guy that I'm looking like me I'd like to know am I Reading Trust that.
And if he can sell that that is obviously safe and secure to say Uh huh.
[noise], that's a great question and and it's one that is a frequent inquiry NATO boss.
And so I'm not.
I'm not going to answer your question very specifically because it is a strategic plan that the board will mall over continuously I'm going to give you more broad answer our plans this year.
Include.
A bunch of activities at least on thoroughly went through that will materially our burn rate from where it is now and where the clinical trials once they ramp up and there are many access points for us to spending ex that business. We can see answers we have the corporate level.
We can finance with debt, we've been creative with that Fortunately, we would fall to a level sophistication that the early days of patent meds.
The maturity had different types of financing structures.
Right. One as you suggest is a financing inside the subsidiary in whatever form that takes private or public financing. It's a tool a proceeds from a M&A transaction on whatever assets and revenues for the second half. So your question, although I can't specifically answer because no.
From decision has been made about that the ability to finance inside a subsidiary and treat that as its own separate entity right. Now we look at this is a single segment with a four divisions, but what you're suggesting is something that could be available to us in the future.
As he continues to evolve we'll be opportunistic debt and take actions destined for some shareholders.
Got it. Thank you somewhere that I did get laugh I really appreciate it guys I'm going to hang back end up.
Getting to though thank you so my thinking for everything thank you.
You're welcome.
Our next question has come from the line of Robert We limit. Please proceed with your questions.
Robert Good afternoon.
Well thank you.
Thanks for taking my question. It it's been regard to I believe there's a provision in the latest round of convertible notes that speaks about.
Requirement.
The sale of an asset by the end of June to provide a source of non dilutive financing is that something.
That we expect it to still come to fruition as that up a provision that it's that could be sort of re negotiated it.
If a annex an acceptable terms for sale of an asset, but don't present themselves, but could you provide as much contacts educate around that.
Sure thing, let me expand your comment just a bit to add context, when we completed the [noise].
Hey engaged in the November financing, you'll recall there were two pieces of that puzzled the series a financing or notes that we got a received $7 million and the series B.
That was an additional $7 million a debt 6.3 million a net proceeds available option to us that had.
Prerequisite conditions to be achieved one of them is what you just outlined.
Got a non dilutive financing at a certain level would occur before certain date.
And that condition was wave as indicated by.
The financing last week and investors so delighted with the progress the company continued involvement a oh var value, but he wave that condition now that's not an indication that.
We have lost sight of that as leash on indicated in his remarks, we are actively engaged in M&A related activities, including on X slow with multiple parties. So although we're not prepared to speak specifically to that at this point rest assured there on.
Going discussions.
Related to that so hopefully that answered your question.
It does that was helpful and in terms of next flow is.
We're talking with multiple parties in I would imagine gauging their interest indeed in the background or we also progressing towards the FDA clearance yeah.
Right well, presumably the value of that would go up substantially yeah, sorry, I wasn't clear about that I just try to mention that am I in my comments. So the answer is yes. The the way the best way to understand that is to think of next slow as a platform technologies I mentioned with multiple applications. So the application that we had always focused on in the one with.
That was the center of the most of our commentary was this infusion set to replace electronic infusion pumps and that and that that that product is as in fact as you.
Did you ask advancing through.
Our our design control development process, and we're looking to have submission to the steel before the end of the year. So that is moving along and we are definitely keeping our the the parties that we're talking to informed about.
What's interesting is that that there that they come back to us and expressed interest. These other applications beyond the infusion set we patients uses of that.
Because of their inquiries around this that we have we have started to pursue these other applications such as disposable even pumps and particularly that and the Cree filled.
Drug infusions.
That's actually enhanced our ability to have these conversation. So the way. This ultimately could evolve would be that we entered into agreements that start with one particular application with milestones or or timelines that extend for other applications and even in theory have multiple transactions with different parties, where.
Were licensed software licensing or or are there acquiring the technology for certain.
Does that does that make sense, but yes. The simple answer is we absolutely are moving the the products along.
Both because we would like to venture commercialize them, but also as you said because that doesn't factor enhance the value.
Thank you.
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Our next questions come from the line of John 11 of Levin Capital. Please proceed with your question.
Hi.
Mhm reach on there congratulations on the all you're doing it's really terrific.
Presentation was wonderful Oh, Gordon as I said I'm outside so it's hard to hear me forgive me well.
Not able to sell it.
Well.
We can hear you find sorry.
Okay, why you're not able to so any of the did I understand colder than impediment.
Is there some technical [laughter], you're increasing you may have said and I missed what does the impediment to.
[noise] fail.
Yeah. The impediment is simply that there are no procedures being performed so for us to two too.
Just effectively sell.
Isa Garden Eater check the physician has to perform at procedure get a sample send the sample to our to the laboratories handler performance and then for billing right. So because there are no. The although there are no non emergency procedures being performed there's no sort of stocking.
Inventory right now it's just you have to wafer procedures to come on board. So we are building up demand. There's no doubt about dabbling once were things open up though so we'll be able to Phil.
Yeah, I appropriate I understand I would've assumed for the most vulnerable or their most favorite patients. They would've said Oh sneak into our office and we'll get one done here, but I get out.
There really is none of that right now I mean, we've we've got we've actually had some creative conversations about the performance.
Good how are you doing with equipment as cars past body, and so forth, but but for all practical purposes. It has to wait till about him back but don't come back sooner than but then you might think because you can't wait for I'd.
Yeah, I was just right I'll, just try and make sure there was no regulatory or procedural or some kind of no no no not at all we were we were all we were off to the racism then things came to help them.
Well, let me follow that up if I may when you're off to the base is there any patient what percentage of the <unk>, how many when you read the races. How many horses ran and what was the result with the horses that ran yeah. We were just getting started so we only had a handful of patients at two sites before we before before things shutdown.
But that does and those cases when find those physicians and their staff were trained they were able to perform a procedure. The samples were sensor everything was successful in that regard, but it was only a handful of before the electus. He just started.
We have 100 over overall, we are in contact with well over 100, maybe close to 200 accounts right now as we speak so those conversations where were the there the priming gearing up to go once that's correct.
Good thank you.
Excellent.
We have reached the end of the question and answer session I'll now turn the call back over the management for any closing remarks.
Thank you all for joining that this afternoon and for your questions. We look forward to keep you apprised of our progress the our news releases and periodic conference calls such as this one I encourage you that continue to stay in contact which many of you have with Mike directly with any.
Questions a J M h. at pad bed dotcom. Thank you for joining US today, you have a great day stay safe.
That concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation have a great evening.
But.