Q2 2020 Inari Medical Inc Earnings Call
Gentlemen, thank you for standing by welcome to the.
An army medical Inc. second quarter 2020 earnings conference call. At this time, all participants are in listen only mode. After the speaker presentation there'll be a question answer session asking question during the session you'll need to press star one on your telephone. Please be advised today's conference maybe recorded if you require any further assistance. Please press star zero I would now.
The conference over to your speakers today.
Caroline corner Investor Relations. Please go ahead Mike.
Thank you operator, welcome to an already second quarter 2020 earnings call. Joining me on today's call, our Bill Hoffman, President and Chief Executive Officer, and Mitchell Chief Financial Officer.
This call will include forward looking statements within the meaning of the private Securities Litigation Reform Act 1995, Oh statements made on this call that do not relate to matters of historical fact should be considered forward looking statements, including statements regarding the market, which is already operate trends and expectations for an all these products and technology trends and demands Bernard's products.
No worries expected financial performance expenses up position in the markets and the impact of Cobot 19 on an worries operation and the northeast customers operations.
These statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results performance or achievements to differ materially for many results performance or achievements expressed or implied by the forward looking statements.
Reviewing our most recent filings with the FCC, particularly the risks factors described in an already thats, one filing and in an average quarterly report on form 10-Q for the second quarter ended June Thirtyth 2020 for additional information any forward looking statements provided during this call including projections for future performance are based on managements expectation.
On the about today and already undertake no obligation to update these statements except as required by applicable law in our press release with second quarter. 2020 result is available on an already website www Dot an army medical dot com under the Investor section and includes additional detail about an artist financial results.
In North website also I believe the SEC filings, which you are encouraged to review a recording of today's call will be available on an artist website by five PM Pacific time today.
Now I would like to turn the call over to Bill for his comments and second quarter 2020 business highlights.
Thank you Caroline and thank you everyone for joining us today on this our first earnings calls a newly minted public company I'm looking forward to updating you on our performance this quarter, but since many of you were new to our story I'd like to start by giving you an overview of an army medical who we are what we do and most important why we do like.
And our medical was commercial stage medical device company focused on developing products to treat and transform the lives.
Oh patients suffering from Venus diseases.
Our initial product offering consists of two minimally invasive novel catheter based mechanical thrombectomy device.
We purpose built our products for the specific characteristics of the Bina system in the treatment of the two distinct manifestations of venous thromboembolism, where b T, namely deep vein thrombosis.
And pulmonary embolism.
Our popular product.
He's used to treat patients suffering from deep vein thrombosis or DBT, while our flow tree for product was the first thrombectomy system have FDA cleared for the treatment of pulmonary embolism for P E.
We believe removing the clock makes important difference for our patients both in the immediate term in long term outcome.
And if you've seen images of our Claude.
Remove buyer devices, we believe most people find this self evident removing the clock matters.
And our devices removed a lot of Clos.
Our our plot tremor interfyl attributed by since I've been shown in clinical trials to be safe and effective.
In treating DVT and p. patients respectively.
Devices are easy to understand and simple to use for the physician and we offer a compelling economic opportunity for hospital customers.
Our procedures qualify for a robust reimbursement while at the same time, removing cost from the health care system by eliminating expensive thrombolytic drugs.
And the comps when I say use day.
Now the you know a little bit about what we do I'd love to hear an example of why.
We do it couple of weeks ago, one of our sales professionals from Arizona was called just before midnight cover procedure on a very sick pulmonary embolism patient.
What's your rod she found a very somber Cath lab 74 year old man, who presented to the emergency Department a couple of hours previously we desperately short a breath.
BT Angiogram showed a very large blood clots straddling the left and right main pulmonary artery.
And extending deep into both vessels the patients blood pressure was very low and unstable.
And blood tests showed elevated cardiac enzymes all of which suggested the blood clots were severely impacting the hearts ability to deliver blood through the lungs and through the body.
This is called the massive for high risk PE.
And it carries a very high mortality rate.
The position told the patient that removing the blood clot quickly, which is only chance to live.
But there was a strong chance that he might not survive the procedure. The patient wife was actually called to the Cath lab to say goodbye to her husband.
This man and his wife came to terms with his mortality in real time as the procedure started.
Minutes later, our flow Trevor system is introduced through the growing into his pulmonary artery.
After two washes.
With our T 20 device.
Along with the usable use of our flow Trevor discussed designed to disrupt firm and wallets. Your clot two large blood clots were removed the patient heart rate and blood saturation levels return to normal before he left the Cath lab.
The position told our sales professional I remember this for a long time. Thank you.
Our devices in our people all of them in partnership with our physician.
Have a most spectacular impact on human life, we're committed to a cause.
The two our mission in ways that are bigger than ourselves the way bigger than business.
We're thankful for this opportunity in for the responsibility entrusted with us.
The patient I described is by no means unique our markets are large and the unmet need is spectacular.
In the United States alone there are approximately 200000 patients who present each year with intermediate to high risk P E, who we believe would benefit from the treatment.
With our flow tree wrist device and another 240000 patients represent each year with DVT and the illegal femoral region, which is roughly between the mid by area to the belly button.
We also believe would benefit from our cloud treat the device.
At our current average selling prices the combined markets represent $3.6 billion in total addressable market.
Despite our strong growth.
The first three quarters of commercialization, we have penetrated less than 2% of this market.
We have a great deal of opportunity in front of us and we sent a strong responsibility and urgency to address the needs of these patients.
With that I'd like to turn now to our quarterly performance.
Many medical device companies from any medical device companies Q2 was a challenging quarter as it was for an army medical.
Due to the ongoing pandemic.
Our Q2 revenue was $25.4 million up over 150% from the same quarter last year, but down sequentially from Q1 revenue, which was $27 million internally, we paid strong attention to procedure volume.
As this metric more closely than any other aligns with our mission to treat patients and overtime. We believe the correlate strongly with revenue.
We completed approximately 2500 procedures in Q2, which was actually up sequentially.
From our Q1 procedure volume of approximately 2400 pay procedures. The modest sequential decline then in revenue.
Do you want to Q2 was result of fewer initial stocking orders for new hospital customers in Q2 goes without saying.
During Q2, almost all hospitals were focused on preparing for and treating koby patients rather than approving the acquisition of new devices. We were pleased to see this increase in procedure volume, but even this does not tell the entire story.
A closer look at procedure volume on a monthly basis.
Shows an even more encouraging picture are recorded procedure volumes in January and February pre covert.
Showed expected growth.
In March we began to see the impact of the pandemic on our procedure volumes.
And we saw further erosion in April however, we were pleased to see a steady recovery in may.
And further acceleration in June in summary, based on a three week Rolling average our procedure volume declined by 40% from the pre cold at high to the trough in April.
And we saw recovery in June that was actually higher than our pre coded peak.
More recently in July we continued to see sequential growth even beyond June.
We believe there are several reasons for this recovery first both PE and DVT represent high acuity disease states and patient cannot wait indefinitely for treatment.
Treatment of PE is perhaps considered more urgent finished treatment for DVT, but we were highly encouraged that the PE DVT procedure mix has not changed during the pandemic compared with the pre pandemic mix. We believe this suggests the DVT is often being treated urgently.
Second the NRT procedures require limited hospital resources patient can be treated quickly with simple routine catheter based interventional procedures importantly.
Because the procedures are single session and do not require thrombolytic drugs and aren't procedures do not create the need for an ISO use day. This is important always but never more so than during this pandemic as hospitals are doing their very best to preserve I see you beds for cold in patients.
Third the an already economic story remains favorable for hospitals. We believe there has been and we'll continue to be some prioritization granted financially viable procedures given the significant financial challenges the pandemic has created.
I'd like to make a few additional comments about Colby I'll response to it and the implications as we look forward from here.
As pandemic has been awful.
For so many people with tremendous uncertainty economic hardship illness and of course, a devastating loss of life.
Almost everyone has been impacted in some way.
We have done our very best to protect our people, we attempted to ensure financial stability for our employees.
We did not institute any furloughs reduced hours pay cuts are layoffs, we lowered quotas and guaranteed a base level of compensation for our field team beyond financial support we encourage all employees to work from home whenever possible.
We hired consultants you to utilize additional space and rearrange work flow throughout our headquarters to create a safer environment for those who cannot work from home such as our engineers and our production team.
We installed temperature check stations at entrances and offer voluntary weekly Colby testing for all employees. All of this has been well received by our team I believe our culture stronger now than it's ever been.
While taking care of our people. We also developed and executed a plan for virtual training education and engagement of our physicians and hospital customers today more than 600 physicians and 200 nurses and tax have attended our weekly online educational series called the clot Warrior Academy for example.
Similarly.
We have developed and executed a plan for hiring virtual training and Onboarding of new sales professionals.
Aspect to our commercial team I'm, sorry, a key aspect of our commercial system is the addition of new sales territories on a regular quarterly cadence. Historically this cadence has been approximately 10, new sales territories per quarter.
Pandemic disrupted this pattern and we paused our territory adds in Q2.
Given the stabilization and recovery of our procedure volumes in the back half of Q2.
In July we restarted Newstar sales territory ads. This last group who came on board in early July included both planned additions for Q3 as well as additions to catch up.
From the Q2 hiatus.
Between now and ended the year, we're planning a final group of new sales territory ads to come on board early in Q4, however, given the remaining uncertainties in the market, we will not be sharing guidance on the size of this last group at this time.
For our existing sales professionals, we took advantage of time spent at home to develop and deliver a robust training program.
As a result, we believe our field teams more clinically knowledgeable.
Technically capable and better prepared than ever.
Finally, we have shored up our supply chain, we've built strong inventory position to protect against any potential future disruptions taken together.
We believe we are stronger and more efficient company now than before the pandemic began.
Not only are we better prepared.
We also believe or hospitals are better prepared to manage this pandemic during the new surgeon, perhaps another wave later this year relative to last spring hospitals have more capacity more equipment and expertise to care for these patients in ways that reduce the impact on the rest of their operations.
We don't believe hospitals were shut down in mass to non jobin patients.
As many did in the spring.
Likewise, we also believe patients are currently more comfortable seeking chair than they were during the early stages with pandemic.
One last point about the impact of totally clear evidence has emerged demonstrating high rates of BT e. coli patients, while thus far as far this has not translated into a meaningful number of tilted positive patients having been treated with our devices. We believe it has raised the overall awareness level of BT among physicians and.
Capital Administration.
We believe this will have positive impact on our patients in our markets in the long haul.
As important as a pandemic context is an earnings growth drivers are on altered by the current circumstances and challenges.
Our five growth drivers remain completely unchanged first.
We will continue to expand our sales organization to target new hospitals and physicians.
Given the size of our end markets in the vast unmet need when fully built out.
We believe this organizer organization will rival the size of the largest interventional refocus sales organizations in the market today increasingly this expansion will provide opportunities split territories to focus on our second growth driver, which is building awareness and driving adoption the a deeper penetration into existing and new hospital customers. We continue to Ajay.
Okay and to see interest from non interventional stakeholders, such as Hedy physicians pulmonologists in hospitals.
The goal is to access the patient population conventionally treated with conservative medical management, which represents perhaps 90% of our PE Tam and about two thirds of our DVT Tam. We believe we are beginning to see some success on this front.
Recently for example, several hospitals have proactively approached us to help install more systematic processes for identifying triaging treating and following up on PE and DVT patients.
Such programs are standard for heart attack in stroke treatment, but are virtually nonexistent in the treatment of DVT and PE.
Our third growth driver is to continue to build.
Upon our base of clinical evidence like most companies we saw significant decrease.
In enrollment into our cloud and flash registries in Q2, but we've seen more recently an increase.
We expect to see presentation, we expect to see presentation at the annual meeting of the American Heart Association in November of the first 200 patients enrolled into our Flash registry, we made significant progress on our flame protocol, a multicenter prospective two arm trial for high risk patients.
We also saw significant progress on several investigator initiated trials.
Including our clot pathology pilot in which positions are analyzing the content of DVT and PE clots extracted with our devices.
Finally during Q2, we saw the publication of nine manuscript covering our technology and peer reviewed journals taken together.
Our investment in clinical evidence will not only helps support adoption will also informed the design of eventual randomized controlled trials for both of our technologies are forced growth driver is to continue to expand our product portfolio. We anticipate introducing several additional product enhancements later this year, we do not believe that our timelines have been significantly impact.
And by the pandemic.
Finally, our fifth growth driver.
He is working to expand into additional adjacent sees in international markets. However, we do not expect significant revenue in 2020 from such expansion.
I think it's important to mention here that we believe the proceeds from our IPO provides significant capital to invest in these growth drivers over the coming quarters in years, we can't think our investors enough for joining us in this fight against VTG for the sake of our patients last.
I'd like to say, we're pleased with and proud of the response from our team to these uncertain times.
Painstaking rebuild systems and processes in all parts of our business. We believe our repeatable scalable built for the long term and useful in both good times.
In challenging times.
All of that said, we like many of you and many of our peers have been humbled by the impact of this pandemic given the uncertainty of the current environment with cobot cases, continuing to surge, we do not feel comfortable providing guidance at this time, we do however.
You're confident about our ability to continue to address the large unmet needs of our patients and to grow sustainably over the long haul with that I'd like to turn things over to Mitch.
Thank you Bill and good afternoon, everyone and noise revenues for the second quarter of 2020, or 25.4 million compared with 27 million in the prior quarter and up 15.3 million or 152% from 10.1 million for the same period to the prior year this year on year increase.
It was driven by the continued expansion of our salesforce both into existing as well as new year's territories and increased adoption of our products.
Revenue is split between the two products as follows 40% of our revenue is derived from the sale of clot Threepar products and 60% was derived from the sale the flux revert during both the second quarters of 2020 and 2019.
Gross margin was 86.3% for the second quarter of 2020, compared with 86.8% in the second quarter 2019, and 90% for the first quarter of 2020.
A sequential basis gross margin was negatively impacted by approximately 4%.
During the second quarter of 2020 due to idle production capacity costs incurred with the KOVA disruptions.
Operating expenses were 22.5 million in the second quarter of 2020, compared with 9.4 million in the same period in the prior year R&D expense was 3.6 million in the second quarter compared with 1.6 million in the same period of 2019.
The $2 million increase in R&D expense was primarily driven by an increase in head count as well as product development and clinical evidenced development costs.
SGN expense was $18.9 million in the second quarter of Twentytwenty compared with 7.8 million in the same period last year. The increase was primarily due to personnel related expenses. As a result have increased headcount of our sales organization and an increase in DNA costs associated with our recent public offering as well.
Well as public company compliance costs.
Net loss for the second quarter of 2020 was 3.8 million compared with a net loss of 1 million for the same period of the prior year. The net loss per share for the second quarter was 16 cents and the weighted average basic and diluted share count was 24.2 million compared with a net loss per share of 17 cents.
And a weighted average basic and diluted share count of 5.8 million for the same period of the prior year. The number of shares last year is significantly lower because of the conversion of the preferred stock and additional common shares issued as a result to the IPO.
I'd like to move onto a few balance sheet updates our cash balance at the end of the second quarter was 194.8 million, including $163 million of net proceeds from the IPO. During the first six months of 2020, our cash flows from operating in investing activities were negative threepi.
About 2 million compared to negative $4.7 million during the first six months of 29 team.
As demonstrated by these figures Nora continues to operate with a relatively neutral cash flow profile.
We believe our cash on hand is sufficient to fund our current operating plans for the foreseeable future. This includes the investment initiatives has outlined during our recent public offering.
In closing, we'd like to acknowledge and thank all of the healthcare professionals, who are working on the front lines at the pandemic to care for patients their courage dedication and professionalism aren't inspiration to all of us and with that I'd like to thank you for your attention and I'll now turn the call over to our operator for questions.
Thank you as a reminder is asking question you'll need to press Star 100 Telecom to its hard question press the pound Keith Please standby compound kuni roster.
Our first question comes from David Lewis of Morgan Stanley You May proceed with your question.
Hi can you hear me okay.
Yes, we can do you David.
Sorry about that so.
So just.
Couple quick questions for me to start off here I guess.
Just to start off here, there's been a lot discussion about new commercial insurance in the channel here in the last several weeks you just sort of talk about how you said a lot of this call talking about Tam expansion, but just sort of talk about any early reading. So you can share from new commercial entrance into the market whether that should have an impact on share dynamics, how your pricing strategy.
Or whether we should be more focused on sort of the broader Tam expansion that add up quick follow ups.
Yes, Okay. So David I'm surprised that question took so long for that to get out here as we start to conference call. So yes. So look I think the most important thing that I want to emphasize here is that the markets are really really big right. So 200000, PE patients 240000 DVT patients.
And we are treating fewer than 2%, but overall interventional procedures anything other.
And simple anti coagulation represents less than 10%.
Of the PE market and less than about a third of the DVT market.
So the idea is here that more people.
Worthy in high quality rivals communicating a story that honestly is about 80%. The same is hours right Declawed is bad.
I would not be there we should take it out the elimination of lytic has a good thing no ifyou time, all those things are very very healthy.
For the expansion of a market.
You with unmet needs that are desperately in need of of addressing so.
I think in general the addition of new entrants into the system here.
Probably expands the market at a rate that considerably faster than any share that might be lost.
So that's one thing on the other hand I know the question you're asking you want to know the specifics who heads up the competition that sort of saying look our products. Our purpose built their design for the specific needs.
And the environment of the Venus the means environment in the specific needs of these Claudio DBP. For example, these costs are wallet here.
They are very often chronic their old and they're not amenable very often or at least not all of the cloud is amenable to aspiration. There's a reason we have two different products for two different disease states. So we like our chances to compete heads up against.
Current entrance and.
And I suspect given the sort of growth that we've seen the big unmet need gross margins will see other interests, but we feel good about arch our opportunity to compete heads up.
Okay very helpful and just kind of a second.
Question, you're just thinking about the outpatient reimbursement that just came through here about a week ago I think your mix today. So the market mix is around 10% competition for DVT just basin expanded reimbursed I Wonder if you just give us a sense of how your commercial strategy may shift in the outpatient and where you think that outpatient mix can be and I'll ask Mike just a question really quickly just timing.
On any.
Updates on cloud in flash registries towards the latter half of this year. Thanks, so much I'll jump back in Q.
Okay. So, let's let's make sure to write down I will 80 devaluation of the first question first.
So with regard to outpatient increases in outpatient reimburse, we think thats really healthy I think there is.
For the first time, our products offer the potential for DVT.
To be treated on outpatient basis, because they don't require devices.
I'll take out all the clot or almost all the caught in almost all the patients the need to follow up or to use ta. The adjunctive use of Ta is almost nil, we just don't see it.
Because there's no ta theres no I see you say so these procedures.
The the create the opportunity for these patients to be treated.
On an outpatient basis that said I think your numbers right about 10% of all the patients that we've seen so far is our best estimate are treated on outpatient basis I suspect will start to see more patients migrate to the outpatient setting although it will be slow at first.
My understanding of these.
Codes is that the apply to hospital based outpatient.
Procedures. So we I don't see this moving outside the hospital immediate term, although that is possible technically and clinically and so we'll see how that plays out overtime.
But we do all we do think this is a healthy development for for the patients for the hospitals and for these procedures more broadly.
The other question was what was going to push and David I could just jumping on the Readouts for flash as Bill mentioned, we're expecting a 200 patient readout for flash in November with the ha get together.
We will have an additional readout for cloud as well that has not yet been scheduled and as Bill mentioned the purpose of those two registries is really help us design, a randomized clinical trial, which will eventually be done for both products.
Great. Thank you congrats on a great quarter in a tough environment. Thanks, David Thanks, David.
Thank you. Our next question comes from Bob Hopkins with Bank of America. You May proceed in question.
Hey, great and good afternoon, and can you hear me okay.
Yes, we got you Bob Great. Thanks, Bill and congrats on your first quarter out.
Yes.
Wondering if you just wouldn't mind talking a little bit more about the trends that you're seeing in June and July because it it almost seems from a top down perspective like you're close to back to normal. So I guess, what I'd love to hear from you is just like how much regional regional disparity are you seeing across the United States.
And your centers and.
And do you think you benefited at all from covert in terms of procedure volumes this quarter.
So yes, so so Bobby out there there are clearly some continuing rolling hot spots is how we described them in here.
House.
And they're exactly as you might expect right wherever cobot searches pick up from there is some challenges patients feel a little bit marginally less safe they maybe don't show up.
Two hospitals.
Hospitals.
Our reluctant to procedure certain patients if I can use that term as a verb.
Colby positive patients of course end up requiring what's called a terminal clean that takes a can take a cath lab down for several hours. It can take it interventional suite or the.
Even the the diagnostic room down for for some time and so there's a reluctance to procedure. These patients. So those things occur at the at Rolling Hot spots.
I don't think we do not think we have benefited directly at the moment from from the cold crisis.
Theres, a very clear link now and I think it's in the lay press is not just technical and peer reviewed journals that sort of saying that shows a very strong connection between coded and the development of blood clots in the Venus as the meat.
[music].
However, what we've seen so far is very few patients that are cold and positive having been treated with our devices I suspect we treated more than we know because the challenges and testing very often the the test results maybe come back after we treated patient who is suspected but we didnt know at the time.
So, but we think the bigger.
There is a benefit longer term because there is an awareness of VT, we think that did not exist before the pandemic right. It's almost a household term now DVT and.
In blood clots at form as a result to cold and so I think the awareness itself will will pay dividends.
Overtime.
Okay. So that's helpful. So limited stocking in the quarter and.
No real covert benefit in the quarter.
Kind of address helpful from a for us to understand trend perspective.
<unk>.
One other thing I wanted to ask about I know I know it's early.
But just maybe talk about.
International expansion for a second because I know that's that's not in any of the models just wanted to I know that cobot is probably all consuming for you right now, but what what are the plans for some international launches. We look forward here over the next couple of.
Quarters in years.
So we.
We expect.
CE Mark kind of late this year again.
All coded externalities.
You can possibly change that but but we expect CE mark little bit later on this year, we have a plan we are beginning to.
Developed a more concrete plan for launch into several countries in the EU. Later this year there will be very very limited if any revenue. This year I think we're not planning for any you shouldn't be modeling any meaningful revenue in 2021 either.
So 2022 is the that's kind of them at the moment that we think about modeling revenue from.
From Oems expansion okay.
That's helpful. Thank you and.
I guess one last question just back on the on the pricing front, just you've seen put numbers lightning 12 in the marketplace a little bit now.
Just maybe big picture talk about your comfort level with the pricing assumptions.
But you did you have for the for the company for for this year and just going forward.
Given that launch thank you.
Yes, Thanks, Bob we think our pricing is what was the first of all we're not seeing any pricing pressure at the moment.
We think the products are very much differentiated.
Our procedures generate very favorable economic situation for the hospital. So thats an important component in there the products are differentiated.
You know your guess is good as mine if there'll be some sort of.
Pricing pressure right now that the price look very comparable pricing that we've seen from the new entrants looked very comparable.
Due to the prices, we see for our two products.
But again I think in a competitive environment the chance the expand the total number.
Number of patients being treated.
He is going to outweigh any.
Declining shares or margin will decrease in average selling prices, but for right now there that there is no pricing pressure at all okay. Yes, no I appreciate the comment it just it.
And I appreciate also that the rising tide here in Big time is probably the right focus but I. Appreciate your response. So thank you yes, yes. Thank you Bob.
Thank you. Our next question comes from Larry Biegelsen with Wells Fargo May proceed in your question.
Hey, Good afternoon, guys can you hear me, Okay, I'm, just having some audio issues here Bill can you hear me, yes. We can you just fine all right great excellent. So two questions for me I wanted to ask about the adjacent sees that you've talked about in your prepared remarks.
And then I have one on the pipeline so so bill.
How do you see NRT evolving over the next few years, you've talked a minute ago about geographic expansion can you talked about new market opportunities do you plan to stay focused on the Venus on Venus devices or do you see expanding.
Beyond that and I had a follow up.
So yes, so thanks Larry.
First and most importantly, we are less than 2% penetrated into a $3.6 billion chance. We are hyper focused on the immediate opportunities at our current devices.
Address any to address very very nicely the immediate.
The products that are coming down the pike in immediate term here are all enhancements to our current offering in the existing Tam that said I know, you're what you're asking the question you're asking is beyond the existing Tam. We think there are some immediate adjacent fees for which our core competencies in engineering are overly.
Very very nicely. So for example.
Our Tam for DVT is for for the Helio femoral region caught that forms roughly from the.
Mid size area to the belly button Theres a lot of closet forms in the vena cava Theres a lot of plot that forms in the upper extremities.
Thoracic central veins in the.
In the obviously in.
In the thoracic area.
And we believe we are ideally suited to address those same call point.
Again core competencies and engineering.
Beyond that all things are possible, but we havent bedded anything nearly well enough at this point to communicate in any.
Any meaningful way here on this conference call. We believe our commercial system. We've had a lot of discussion about this in the past we deliver cursed commercial system.
It's not just the commercial team parked at one call point valuables that is we believe its repeatable scalable and it can be replicated in other parts.
Other and other areas should we choose to do that so lot of possibilities, but nothing that we are anywhere close to being ready to communicate at the moment.
Thats very helpful for my follow up Bill you talked about some planned launches in the second half of this year.
I think at the time of the IPO you had about four new.
Product enhancements coming out in the second half.
Did you kind of refresh our memory on those and and highlight which ones you think could be the most impactful thanks for taking the questions and congrats quarter.
Yes. Thank you I appreciate the good words.
So I think the the product that I am maybe most excited about maybe what we have seen the most enthusiasm from the physicians with whom we've tested in animals and communicating. The story is is a product that we're calling tentatively calling flow saver and it's a device that allows us to reintroduce blood after it's been extracted.
During.
During PE.
Thrombectomy, we don't think we have a issue with blood loss.
During our procedures, but with the flows lever allows us to do is is to be really aggressive. We believe that takes a limited amount of clot removed to make immediate impact.
On the disease State right you can offload the right heart with a limited amount of clot extracted, but we believe the clot matters long term and the more passes the more aggressive a physician can get the more of that cloud. We can take out we believe physicians will be much more aggressive going after perhaps where distal Claude just making more passes if they know that.
It can reject the blood. So we're really excited to see the impact that might have on our patients.
Thanks, So much bill.
Thanks, Larry Larry.
Thank you. Our next question comes from Bill Plovanic with Canaccord you May proceed with your question.
Okay. Great. Thanks, Good evening can you hear me okay.
Yes, we got you Bill.
Great. Thanks.
Two questions one thanks for the color regarding the new versus the existing and I was just as you move forward I mean that was unchanged year over year, but is you progressed through the quarter has that changed in how would you expect that to evolve kind of as we move into the future.
Do you mean, new versus existing customers is that what you're referring to.
Yes. Thank you.
Yes, so so thanks Bill yes.
So obviously new customer additions in Q2 were challenging because.
Well you analysis committees or.
And they just weren't meeting that was a low priority for most hospitals during the initial surge in the crisis period of of cold. So they just fewer value analysis committee meetings and therefore.
Slower approval of new product acquisitions.
Going forward here I think we've already seen a little bit of a recovery on that these value analysis committees are getting back to back to business.
That said you know we model and we have seen a very small portion of the total amount of revenue that we create a coming from what we call initial stocking orders.
It is procedure driven by design right. That's that's our mission to treat patients that's where the revenue should come from that lines. All the all the goals with our mission. So going forward, we see an increasing number of procedures.
In our existing customers, therefore, new customer revenue from.
Initial stocking orders will representing a decreasing a percentage of the total amount of revenue going forward. So it's already pretty modest and we see that declining over time again revenue will be produced by doing procedures and we're gearing up to do more procedures.
Okay and then my follow up is just as you look at CEO, it's been a challenging quarter for a lot of people and getting through this and it had an impact on the business and I'm trying to understand.
We learned a lot of different different things in these environments. What has changed in your strategy, whether it be from a commercial distribution standpoint, a clinical standpoint, what learnings are you applying as you move forward and Thats My questions. Thank you, yes. Thanks Phil.
So first of all the pandemic is.
It's amazing the impact that has had on so many people for so many different reasons that we feel very fortunate to be talking about business rather than mother.
Personal challenges here, but.
I would say the pandemic has changed nearly everything that we do in our business right I would say everything that we thought was true about our business model turned out to be altered or changed completely in some form or fashion.
Maybe not most notably is the way we interact with our customers you know just as the pandemic began to raging.
People start flying we were supposed to do in person.
Training sessions, we call them advanced users forms we were supposed to who as it was the weekend on which we were supposed to do our first two.
Advanced users forms we immediately had to change that we couldn't get on airplanes are physician didnt feel comfortable and so forth. We changed those two what has now migrated into the clot Warrior Academy and that turns out not to be a reasonable substituted better. It's just flat out better in terms of the.
Consistency the interaction we have with our customers the frequency with which we can interact with our customers in that way and that has been.
Incredibly valuable.
I would see the other thing that's that's emerged here's our sales professionals sales professionals there is.
The distribute all around the country, they very rarely maybe once a year if we're lucky get them all in one room very challenging to do that of course, and so they hear each other's voices they talk to each other on the phone region by region.
We have interacted ourselves professionals interacting with each other far more consistently we assume there's.
The proverbial zoom happy hours, there is theres training there is fun stuff, but I think the culture is stronger than it's ever been any of this this idea that we're all in this together.
Thats pervasive throughout the company not just not just in our field team. So there's a lot of changes, but I, but I'd like the.
The way we responded goodness in Bill one thing I would add on the Q2 learnings and changes had beginning of the quarter. We had tried to do the IPO as you may remember back in early March and if you'd asked us in early April what was going to happen in Q2, we wouldnt have probably predicted that.
The opportunity we add to complete the IPO and certainly bringing those resources has really allowed us to change the way we think about the investment.
Basically objectives for the business and I would say, we used to think about things like cook clinical evidence product projects or product.
Development opportunities and more of a serial fashion and due to the transformative resources at the IPO. We are much more I'd say parallel thinking about that ultimately we hope that'll help us speed up the opportunities we have to grow our presence in the market and ultimately change the standard of care for VT therapy.
Great. That's helpful. Thank you.
Thank you.
Ladies and gentlemen, this concludes todays conference call. Thanks for participating you may now disconnect.
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