Q4 2020 IsoRay Inc Earnings Call
Ladies and gentlemen, thank you for your patience you are holding for today's ISO Ray fourth quarter 2020 earnings conference call. At this time, we are gathering additional participants and will begin momentarily. We appreciate your patience and ask that you. Please continue to hold.
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Good day, ladies and gentlemen, and welcome to your ISO Rais fourth quarter 2020 earnings Conference call. All lines have been placed on a listen only mode and the floor will be opened for your questions and comments following the presentation. If you should.
If you should require assistance throughout the conference. Please press star zero to reach a live operator.
This time, it's my pleasure to turn the floor over to Mark Levin with ISO REIT Investor Relations, Sir the floor is yours.
Thank you operator.
Good afternoon, and thank you for joining us today for the high survey fiscal fourth quarter and fiscal 2020 full year earnings call for the quarter and year ended June Thirtyth 2020.
Before we get started I will take a few minutes to read the forward looking statements.
Certain statements in this conference call.
Constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of one.
1995 as amended.
When used in this conference call.
Words, such as will believe expect anticipate encourage and similar expressions as they relate to the company or its management as.
As well as assumptions made by and information currently available to the company's management identify forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
These forward looking statements are based on management's current expectations and beliefs about future events as of today September 17th 2020.
As with any projection or forecast they are inherently susceptible to uncertainty and changes in circumstances.
The company undertakes no obligation to and expressly disclaims any obligation to update or alter its forward looking statements, whether resulting from such changes new information subsequent events or otherwise.
Additional information concerning forward looking statements is contained under the headings of Safe Harbor statement and risk factors.
Got it from time to time in the Companys filings with the Securities and Exchange Commission.
We will begin today's call with Laurie Woods ice arrays, Chief Executive Officer.
And then Jonathan Horton ice arrays, Chief Financial Officer, who.
Who will discuss the fiscal fourth quarter and fiscal 2020 full year financial results followed.
Following their prepared remarks, we will take questions from our analysts and institutional investors.
I will now turn the call over to Lori Woods.
Thank you Mark good afternoon, and thank you for joining us today for ice raise fiscal fourth quarter and full year 2020 earnings conference call for the quarter ended June Thirtyth 2020.
Following my comments, our Chief Financial Officer, Jonathan Hans will provide a more detailed review of fiscal fourth quarter and full year 2020 financial results.
I am very pleased to announce record full year fiscal 2020 financial results as well as fiscal fourth quarter 2020 financial results, which illustrate improving trends in the wake of the start of the coated 19 pandemic.
Revenue for the fourth quarter increased 18% over the year ago quarter to $2.28 million.
Prostate braking therapy revenue increased 11% versus the fiscal fourth quarter of 2019.
Procedure volumes and sales improved sequentially and substantially throughout the fiscal fourth quarter. After beginning the corridor with April sales down 20% versus the prior year period.
For the first quarter of fiscal year, 2021, which ends at September Thirtyth, we expect revenue to be between $2.3 million and $2.5 million and gross margin between 48% and 53%.
For the full year fiscal 2020, total revenue growth accelerated to 32% compared to 23% growth we experienced in the prior full year fiscal 2019.
Gross profit increased 68% with gross margin expanding by over 11 percentage points to a record 52.9%.
When combined with a modest 4% increase in total operating expenses, our net loss declined by 33%.
Continued improvement in each of these key metrics remains Paramount focus of mine and serves as evidence that our strategies to grow the company and expand the usage of our proprietary cesium 131 isotope are working.
Within our core prostate business, we continue to see growth that demonstrates that we are not only taking market share, but we are leading the growth of the prostate breaky therapy market overall as evidenced by our full year 2020, net physician customer growth of 35%.
Yeah.
Despite the challenges we face as a result of the Kogas 19 pandemic I'm very proud of the continued progress we have made for the full fiscal year and I remain enthusiastic about the future growth prospects for ice re m. cesium 131, we're seizing blue as it's known commercially.
[noise] in the initial months of the pandemic, our salesforce remained productive using that time to identify and create a database of all.
All the opportunities inherent in new and existing braking therapy programs.
Based on these regional opportunities we added another dedicated account manager readjusted, our territories and added an additional territory to support our sales teams, providing better service to existing customers and the timely opportunity to introduce themselves to new centers.
And those interested in setting up a new program.
As a way to continue to get our message out to prospective customers. We developed a program to educate urologist on the advantages of modern breaky therapy.
This program is an opportunity for us to Reengage with urologists and to communicate the recent technological advances and the recent publication of the exciting clinical outcomes of our novel isotopes Cesium 131.
Moving forward, we expect a key part of the continued growth in our prostate business in fiscal 2021 will come from broader availability of our proprietary inter operative disposable delivery system blue build.
You may remember that our Bloomfield parts manufacturer temporarily converted their production capacity to making critical P. P E in support of the battle against the Kobin 19 pandemic.
I am pleased to report that our parts manufacturer has restored ample production capacity for Blue belt, and we anticipate that our innovative disposable delivery system will gain more traction in fiscal 2021 as it will be available to a greater number of customers.
In addition to creating unique delivery devices, such as new build to further grow our prostate business. We believe that the recent mounting long term data showing the efficacy of our proprietary isotope well continue to drive greater adoption of cesium 131.
Hopefully you saw our June press release on the second key tenure data observational study from the University of Pittsburgh School of Medicine.
[laughter] further demonstrates the effectiveness of cesium 131 in the treatment of prostate cancer.
In fact, we are particularly taken by the express thoughts of the authors, who commenting together said and I quote.
The shorter duration of urinary morbidity along with a lack of differences in long term adverse effects support our preference for this isotope.
The authors concluded the study demonstrated that in their words prostate breaky therapy treated with cesium 131 achieved excellent long term biochemical control.
This observation of study from the University of Pittsburgh School of Medicine, combined with the Chicago Prostate Cancer Center study published in September of 2019 represents comprehensive long term data that demonstrates cesium 130 one's success in treating low and interim.
Immediate localized prostate cancer.
Studies underscore that cesium 130 ones short half life and high energy allow it to aggressively attack the cancer, while reducing the potential for side effects patients may otherwise experience from prolonged radiation exposure we.
We believe that the growing list of long term data should continue to help highlight the differentiating and unique qualities of cesium 131 versus other isotopes in the treatment of prostate cancer.
Beyond our success in prostate we are continuing our efforts to build on our progress in.
In bringing the therapeutic benefits of cesium 131, as a treatment options for cancers throughout the body.
We're very excited about the phase one B study, we shared with you in our recent press release.
As you May remember the study will evaluate the safety and efficacy of the immunotherapy drug Keytruda and cesium 131, following surgical resection.
A treatment option for recurrent head and neck cancers through.
Through a research grant agreement between ice Ray and the University of Cincinnati Physicians company. The trial will explore potential synergies that may eventually present, new and effective treatment options for difficult to treat cancers of the head and neck.
We will be following the progress of the study very carefully you may remember that a previous multi institutional study provided evidence that the use of cesium 131 with surgical resection is well tolerated in the treatment of recurrent head and neck cancers.
What this study and our efforts to expand the use of cesium 131 for the treatment of hard to treat cancers demonstrates is that we remain committed to continuing to be a force of leadership in the field of breakeven therapy, and making a difference for patients and the doctors who treat them.
In fiscal year 2020, I some rate continued to see an increase in the treatment of patients with brain cancer.
Through orders of Cesium 131 to power gamma tile and for other non gamma tile cancer applications. We continue to believe that brain cancer remains an area of considerable potential growth.
Since our partners at GE Medical technologies launched into full market release in the beginning of 2020. The company now has gamma tile available in 26 hospitals across the United States.
In addition, teaching medical technologies recently announced that the University of Texas, MD Anderson Cancer Center will begin enrollment of a multi center randomized phase three clinical trial of gamma tile therapy.
The study will compare outcomes of 180 patients with newly diagnosed large brain tumors, who received the standard of care treatment resection surgery, and stereotactic radio surgery to those treated with resection surgery with gamma child therapy placement at the time.
Some of the resection surgery.
We will continue to monitor GE medical technologies progress as we remain optimistic about the prospects of what Ghana tile powered by Cesium 131 can do for brain cancer patients.
I will now turn the call over to Jonathan to review the results of our fiscal fourth quarter and full year.
Thank you Laurie.
I'm going to discuss some of the financial information that was contained in our press release for the fiscal fourth quarter and fiscal year ended June Thirtyth 2020 that was real.
That was released a short while ago we in.
We anticipate that our form 10-K will be filed with the FCC on or around September 21st.
Revenue for the fourth quarter ended June Thirtyth, 2020 grew 18% to $2.28 million versus $1.92 billion for the same period last year.
Fourth quarter revenue was comprised of 84% for prostate breakthrough therapy with the balance were 16% of revenue attributed to other breakthrough therapy.
Primarily sells to treat brain, which included revenue from San Mateo and GE medical technologies.
Gross profit as a percentage of revenues for the fourth quarter ended June Thirtyth 2020 increased to 47% compared to 45.7% for the quarter ended June Thirtyth 2019.
The gross margin increase was primarily driven by higher cells, which were partially offset by higher isotope unit costs, resulting from increased transit cost due to the cold with 19 Pandemics impacts on international commercial flight capacity as well as increased payroll and benefits expense due to an increased head count.
Fourth quarter gross profit dollars $1.07 million increased 22% when compared to the same period last year.
Total operating expenses consisted of research and development sales and marketing and general and administrative increased 12% to $2.26 million in the quarter versus $2.02 million in the fiscal fourth quarter 2019.
Total R&D expense decreased 6% versus the comparable prior year quarter to $322000.
The year over year decrease in total research and development expenses was primarily the result of reduced expenses related to the development of the Blue belt Lilly system during fiscal year, 2019, which were.
Which were partially offset by increased incentive compensation related to the increase in revenue and company financial performance.
Going forward, we continue to expect R&D expense to be roughly $300000 to $400000 per quarter as we are.
As we're continuing to have discussions with institutions looking at the expanded use of cesium 131.
Sales and marketing expenses were $690000 in the fiscal fourth quarter of 2020.
An increase of 1% versus the comparable prior year period.
The increase in sales and marketing expenses was driven by higher payroll benefits and share based compensation, resulting from increased incentive compensation related to the full year sales increase of 32%.
But was partially offset by significant declines in travel convention and trade show expenses due to covert 19.
June expenses of $1.25 million increased 25% versus $1 million in the fiscal fourth quarter 2019.
The year over year increase engineering expenses was driven primarily by increased incentive compensation related to the full year, increasing revenue and company financial performance.
Count insurance premiums and public company related expenses, when compared to the comparable prior year period.
<unk> posted a net loss of $1.19 million for the fourth quarter ended June Thirtyth 2020, compared to a net loss of $1.1 million in the for the quarter ended June Thirtyth 2019.
The net loss per basic and diluted share was two cents versus a net loss of two cents for the quarter ended June Thirtyth 2019.
Basic and diluted share results are based on weighted average shares outstanding of approximately 68.1 billion at fiscal year end 2020 versus $67.4 million for the prior year period.
Turning now to our full year 2020 years.
Revenue for the full year ended June Thirtyth, 2020 increased 32% to a record $9.68 million compared to $7.31 million for the prior year.
Prostate breakthrough therapy revenue represented 86% of total revenue at fiscal year end 2020 versus 89% for the prior fiscal year.
The company's core prostate breakthrough therapy revenue increased 29% versus the full year ended June 32019 full.
Full year non prostate revenue grew 60% versus fiscal year, 2018, and was driven by growth in cells to treat brain, including sales of gamma tomotherapy lung and gynecological cancers.
Gross profit as a percentage of revenues for the full year ended June Thirtyth 2020.
It was 52.9% there.
Versus 41.7% for the full year ended June Thirtyth 2019.
As Larry said at the beginning of the call for your gross profit dollars and a $5.12 billion increased 68% when compared to the fiscal year 2018.
Gross margin was primarily driven by higher sales as well as decreased isotope unit cost compared to fiscal year 2019.
Total operating expenses of $8.6 million for the year ended June Thirtyth 2020 increased 4% from $8.3 million in fiscal year 2019.
Total R&D expenses decreased 24% to $1.13 million from $1.47 million in fiscal 2019.
The decrease in total research and development expenses was primarily the result of lower overall critical expenses combined with reduced spending related to the development of the blue belt delivery system during fiscal year 2019.
These declines were partially offset by increased incentive compensation due to the increase in revenue and company financial performance in fiscal year 2020.
Sales and marketing expenses increased 11% to $2.98 million versus the prior fiscal year.
The increase was largely attributed to higher payroll benefits and share based compensation, resulting from increased incentive compensation related to the sales increases.
And an increase in physician led training exercises versus the prior fiscal year.
These increases were partially offset by decreases in travel and convention costs due to covert 19 in the second half of fiscal two 2020.
General and administrative expenses increased 10% to $4.57 million versus the prior year fiscal year.
The year over year increase engineering expenses was driven primarily by increased incentive compensation related to increasing revenue and company financial performance headcount insurance premiums and public company related expenses when compared to fiscal year 2019.
The company's net loss improved significantly to $3.45 million for the fiscal year ended June Thirtyth 2020 is can.
This compares to a net loss of $5.11 million in fiscal year 2019.
The net loss per basic and diluted share was five cents versus eight cents in fiscal year 2019.
Basic and diluted share results are based on weighted average shares outstanding of approximately 67.6 million at fiscal year end 2020.
There's a 67 million for the prior year period.
As of June Thirtyth 2020, the company had cash cash equivalents and certificates of deposit that totaled $2.39 million compared to $5.33 million at the end of fiscal 2019 ended June Thirtyth 2019.
The company has zero long term debt share.
Shareholders equity at the end of fiscal 2020 totaled $5.72 million versus $7.68 million in the prior year comparable period.
During the fourth quarter acre School 2020, the company sold 1 million 200 employees 7232 common shares through its ATM facility and.
And realized gross proceeds from those sales of approximately $920000.
I will now turn the call over to the operator to take questions from our analysts and institutional investors.
Thank you ladies and gentlemen, the floor is now open for questions.
You do have a question. Please press star one on your telephone keypad at this time, if you are using a speaker phone we asked that while posing your question you pick up your handset to provide the best sound quality.
Again, ladies and gentlemen, if you do have a question or comment you May press star one on your telephone keypad at this time. Please hold just a moment, while we poll for questions.
Well take our first question from Ed Woo with Ascendiant capital. Thank you Sir Please go ahead.
Yeah, congratulations on the quarter and annual results. My question is you know has a you know to physicians that you've been interacting with making sales calls how they said that you know things are pretty much back on track or are there still significant delays from the pandemic.
Hi, Andrew and thank you for your question today, we are.
We are communicating a lot with our physicians currently and what we're seeing is that certainly the biggest impacts to date. We experienced was at the end of March and into April and after that both you know our numbers as well as our physicians.
<unk> saw an increase <unk> trending back toward normal patterns, we have seen a little bit of fluctuation in that just based on some of the public health concerns and that's had kind of been a near term effect on patient volumes from one market to another but by and large we're seeing the trend heading in the right.
Direction.
Great and then my next question is you know trade shows were such a big part of your marketing program now that it doesn't seem to be happening.
Happening anytime soon or have you been able to do your outreach and marketing.
That's a really great question, so yes trade shows.
Our and professional society meetings really haven't been happening and probably won't happen. This follows as well what we have found to be very effective I think like a lot of other people is working with zoom and Microsoft teams and other platforms to communicate directly with our customers and our sales team has done some trade.
Turning on that and has really found that that has been an effective way to continue in reach out and talk to our customers. It certainly isn't the same as being with them face to face, but as things have eased up over the summer our salesforce choose back in the field, we continue to ask them to.
Be very careful for themselves as well as follow all the rules and the institutions that they're visiting but we're seeing you know more more opening up that type of activity as well.
Great well. Thank you I wish you guys. Good luck.
Thank you Ed.
As a reminder, ladies and gentlemen, if you do have a question or comment you May press star one on your telephone keypad at this time well take our next question from RK Ramakanth. Please go ahead.
Thank you good evening Laurie congratulations on that.
HM.
Great good here.
Blue label those.
<unk> is expected to be the driver of growth.
Listed in your opening remarks so.
Tom So from you know <unk> trying to.
Trying to maintain that.
You know how confident are you about your manufacturers' ability.
Not to be or on by the requirements of Korean 19.
And and also to maintain but you mentioned that you need or keeping up with your sales because it looks like the sales are growing pretty good as well.
Absolutely so our our Bloomfield manufacturer is back to a manufacturing medical devices, and we expect no interruptions nor concerns in terms of capacity for them to provide us with what we need.
I'm Super excited about build because our sales team has a lot of it.
It took us a little longer to get it out because of what happened with covidien and our manufacture converting to P.P.E. manufacturing. However, there were a lot of doctors that were interested in it and who have stayed interested in it. So our sales team is very busy doing.
Virtual presentations.
Hold and how to use it and that's been going very well. So we are very excited about that in terms of the overall manufacturing of our seed.
We during cobot didnt see any supplier issues with our isotope or any other components of our manufacturing.
How have really stayed very stable in that area as well. So we're feeling very good about all of our suppliers and manufacturers that support us.
Yeah, you're talking about.
So suppliers so.
Can you talk a little bit more about the <unk> quality up to supply our assurance.
Sure and that you know.
It is an issue that carbon supplier that you have a secondary supplier to go to for CCM.
Absolutely so and speaking of the isotopes specifically, we in our 15 years of working to get isotope from our partners in Russia have never never had a problem or a missed a delivery during cold. It's specifically they made made every.
Single weekly order that we put in and got it to US we saw.
More issues actually with the giving it to us in the United States. So the actual carriers and we had to move from commercial flights to cargo flights, which were a little bit more expensive, but I guess.
Again, now that were seeing things lighten up a bit we're back to using commercial carriers and were out of cargo and so it's it has all worked very seamlessly <unk> as you can imagine we watch that very very closely but it has.
Worked out very well, we're very pleased with it.
Okay. So the last question from me is on the gamut of obviously, the gamma tone seems to be going strong, but I'm, making making up 16% up your.
Sales and.
Your so.
So what what sort of that six that you need to continue to play to make sure that that dot part of that segment of the business.
Second is to grow beyond 16% in the coming year.
So just another clarification there there are less than 10% of our overall revenue, but you're absolutely right. They have grown a lot. This year. We are very excited for them about that and we are looking forward to their continued growth and we work really closely with them to make sure that we understand what they are forecasting there.
Business to look like so that we have all of the components that we need to supply.
That we have everything in place and our manufacturing facility to make sure that there's no hiccups because we want to continue to support them and it makes a lot of sense for us to be in a position where we can meet absolutely every single order. They they give us at any point in time that they give it to us.
Thank you Larry and good luck.
Thank you so much okay.
What's more ladies and gentlemen, if you do have a question or comment you May press star one on your telephone keypad at this time that's star one on your telephone keypad.
And there appear to be no further questions at this time, ladies and gentlemen. This does conclude today's teleconference. We thank you for your participation you may disconnect your line.
And at this time and have a great day.
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