Q3 2020 Transenterix Inc Earnings Call

As a reminder, these areas of focus our first market development, which involves building awareness of the senhance system and effectively demonstrating the clinical and economic value in the marketplace by increasing the visibility of the success that our customers are having.

With Santander.

Second clinical validation, which emphasizes the development of clinical evidence supporting the value proposition of the Senhance.

And third portfolio expansion.

Forecasters.

On broadening the applicability of sand and by adding new indication features and new instrument.

Starting with our first focus area market developments.

Specific to new system installs.

As of the end of the third quarter, we have entered into nine leasing agreements and started eight clinical program.

We continue to believe we are on track to meet our goal of 12 to 15 installations for the year.

In the third quarter, we initiated clinical program at three new sites two in Europe, and one in Japan.

The European clinical programs were initiated at LK itself creates in Austria, and Maastricht University Medical center in the Netherlands.

The third clinical program was started at sense Mariana University School of Medicine for local hospital, a hospital in the greater Tokyo Metropolitan area.

Near the end of the third quarter, we signed an additional system lease agreement with Toshiba Hospital, the hospital in Tokyo, Japan and plan to initiate this clinical program in the fourth quarter.

As it relates to our pipeline the demand for Senhance remains strong, particularly in Asia.

To help support that demand we have added a dedicated training facility in Japan.

As announced in September we inaugurated a training facility at the site Tamar Medical University International Medical Center in the greater Tokyo area.

The Asia Pacific region has seen a significant increase in new system placements and Senhance utilization a trend that we expect to continue.

We expect the Japanese training Center will help drive increased utilization of our seven soon to be eight system installation in the Asia Pacific region and encourage further adoption of our technology. In addition, our hospital.

Similarly, we continue to see strong demand for 10 has in Europe and expect to launch an additional training centre in Europe before the end of 2020.

After a strong start to the year procedure volumes were materially impacted by COVID-19, beginning late in the first quarter.

However, the back half of the second quarter and throughout the third quarter, we have seen a rebound.

Year to date procedures were down just 12% over 2019.

The trends during the year have varied across our three primary geography.

In Asia, we have continued to grow our active installed base and procedure volumes have followed suit with volumes growing 37% year over year during the quarter.

In the us despite the negative impact due to Covis procedure volumes in the third quarter were down only 11% over the prior year.

Lastly in.

In the EMEA region, where we continue to see Colby driven disruption volumes declined approximately 28% over the prior year quarter.

Despite the year over year decline in the EMEA region, we did see a significant rebound in volumes in the third quarter growing nearly nearly 200% sequentially as compared to the second quarter of 2020.

We continue to monitor the Covis pandemic developments on our business.

So if the world entered a new phase.

We are very excited about the work in one of our specialty area pediatrics.

Earlier this year, we received a CE mark approval that enable us to use digital laparoscopy with Santander and our unique three millimeter instruments on pediatric patients.

Pediatric surgeon, our skilled minimally invasive surgeon, who treat a wide range of patients from infant two adolescent.

Working with small anatomy presents unique obstacles for the sales.

Utilizing small instruments in small cavity and heightened challenges with visualization instrument control and surgical access.

These are key areas, where senhance can help.

In addition to stable visualization senhance can minimize dramatic forces exerted by instrument on the abdominal wall through tremor filtration capabilities and the use of digital fulcrum point.

The combination of these two features create an optimal microlaparoscopic working environment for the third.

Furthermore, the Senhance system is the only robotic assisted surgical system in the world to provide fully usable three millimeter instruments.

Pediatric surgeon strongly prefer the use of three millimeter instrument to reduce invasiveness, but don't use them regularly because they're difficult to manipulate and control manually.

This advantage in digital laparoscopy winter Senhance surgical system has the potential to reduce invasiveness in surgery reduce surgical variability, especially in complex surgery and meaningfully improve outcomes for.

Okay Patrick patients.

On October 12, the company announced that surgeon at Maastricht University Medical center or M.U.M.C. in the Netherlands success.

Successfully operated.

On multiple pediatric patients.

This is the first pediatric surgical program in the world to utilize our senhance system and integrate robotic instrument as small as three millimeters.

Into their standard of surgical care.

We view pediatrics as a highly underserved market that will benefit significantly from the capabilities that has provided.

We are leveraging the momentum we are seeing in Europe to increase the number of pediatrics enhance program.

Shifting to an update on our foundational site.

Cut it into our third focus area portfolio expansion.

Following this vehicle errands of the first machine, we sent system in robotic surgery with the intelligence surgical unit.

Q in March of this year, we continue to progress towards offering additional feature with the technology.

The idea issue ads Ah new cooperative component to robotic assistant surgery by enabling intra operative real time augmented intelligence capability in surgery for the very first time.

It has the potential to change the role of robotic statistic technology in the O R from being transactional with the surgical team.

To being cooperative with that.

This signal a significant and meaningful shift in how robotic assisted technologies add value in surgery.

The <unk> will provide true competitive advantages to laparoscopic surgeons globally, and even the playing field is giving surgeons, a shorter learning curve and confidence to use digital laparoscopy when performing surgery.

The enormity machine vision base camera control feature.

That were recently introduced enablers the system to recognize certain objects and location in the surgical field.

Based on current clinical usage, we have seen that the seamless tracking of instrument by the system during surgery.

Improved ease of use and efficiency in intraoperative camera control.

Potentially reducing the risk of surgical errors driven by work camera controls during surgery.

On September 23rd we announced the completion of the first surgery utilizing the Isu's machine resetting capability.

The surgery for completed at Hackensack Meridian help <unk> Valley Medical Center, a hospital in New Jersey.

The patients were treated by Doctor Amit drove Eddie.

After chaff surgery at <unk> and help <unk> Valley Medical Center LSP in multiple generalized procedure.

Yeah excited about the early successes, we have seen with procedure, where the ideas you have been utilized as it validates the benefits of the technology.

It's a platform that will continue to evolve.

We are working to add incremental isco feature, namely the next generation of machine vision and augmented intelligence capability.

Such as seen recognition and surgical image analytic.

This next software update for the ice you that we will seek FBA clearance on represent the next step in delivering on a digital surgery strategy.

Shifting to general surgery.

In August we announced that we filed a five 10-K.

Sales and through the addition of training centers in key geographies.

We had several.

First procedure for high impact indication and new technology introduction.

We continue to develop critical clinical data.

We have added talent in key areas within the organization.

And we continue to make tremendous strides with our regulatory initiatives.

We look forward to leveraging this momentum into the balance of 2020 and into.

2021 to bring the benefits of San has come more certain hospitals and patients across the globe.

Uhm and in what format will see it in what city and what's the main focus.

Yeah.

I think that's the first publication, it's gonna be a U S publication.

It's a cost cost comparison publication.

Comparing laparoscopy Saint hence the robotics platform.

But with respect to that it's going to come from it in the review process, So I'm unable to disclose.

Submit that we didn't investigate us but.

We believe will be able to see come out before the end of this year.

Amongst other things right.

On the other topics.

Very active in trying to get.

Get the data and look.

Look at the investigators to get.

Get the data to be published so we'll at least get the process started the first one yeah.

In short order.

Sure there were some other publications you are as well.

Yeah.

Yes, I think that would work on multiple fronts right ones on the cost front in the us and Europe.

Why don't know dynamics.

Another one on.

Clearly the clinical outcomes, so benefits up using primly maintains truants.

So that one on we're trying to hit on multiple different.

To make sure that this clinical evidence and data that gets.

Published in any kind of a high impact manner.

So.

Got it okay.

Can you give us any flavor for the the.

The owners you capabilities new.

D as far as a number of cases Doctor Trivedi Stern and.

And certainly into the owners to capabilities for the other.

Their systems.

The U S.

For this year.

So I think just to clarify is.

<unk> with installed every case that the surgeon performs users value issue, whether the surgeon two thirds to use those feet. That's I'm not it's kind of it's kind of becomes narrative.

To the system.

So the initial features that.

Agents I using primarily on.

Camera control.

So that and tracking of instruments.

So that it helps them.

Manure navigate.

<unk>.

By moving the instrument. So that's one of the features they use eight and the other one kind of really.

Focus is more on collaboration within the O R. Enabling the rest of the team to be able to see exactly what the third then you seeing.

Not just the surgical site, but also.

The inputs outputs coming out of the robot so it kind of creates more of a collaborative.

So those are kind of the primary feature.

Collaboration is one.

Angle out of the second money surround visualization.

The next part to your question about.

Lots to come I think they're kind of going to build on this platform by continuing to.

Had additional features to the current platform in means of software.

Upgrades to the system.

And that is talked to see us, making those FDA you don't have to go through the FDA, but you'll see those.

If da submissions the second wave of features.

It should be more around.

Analytics and more information on the surgical field than the surgeon can query.

So that you'll see some time in the first quarter that will go into.

Go into the FDA.

Or would you expect some additional sooner so come online.

<unk>.

Yes, so we pile of it we need 75 client pilot that to use sites, we have one up and running and very soon we will have the second site.

Dining in munsey.

Have these two types up then.

<unk> to all the sites.

And I think so I think you also asked about how many I think I would say that it's.

Not off.

15 cases, so far so pretty much like every case.

Surgeons do use the icy right.

Okay. What's the parents were for your you spoke about spending.

Submitting see more for the end of the year I was hoping flounders or Donald log on growing now.

Yeah I.

I believe it testing July of this year.

That we submitted it to.

To the.

Notified Buddy in Europe, and we are expecting to get see Mark approved.

Towards the end of this year.

Okay and then.

Can you touch upon the the articulating instrumentation, you spoke about coming to market perhaps of 2021.

Where we were going to be as a U S or she as far as filings and.

Specific to your.

For now which ones do you expect initially room will go to entrepreneurship.

Cases coming back in Europe, so that 200, but specific to EMEA.

Okay. You mean sequential from Q2 to Q3 was up 200% for Q3, but down 28% year over year.

Correct.

I got it okay that does it for me Anthony from news. Thanks, a lot for taking the questions. Thank.

Thank you Jeff.

Yes. Thank you.

And I think they get specifics, we will only kind of be able to finalize once we.

Get that approval.

Okay. That's helpful and then.

You could maybe expand a little bit on the 800000 additional general surgery procedures could it possibly can break out the various procedures and annual opportunity for each or is it is it too early for that.

I wouldn't want to get into details about exactly how much we systems, we have in inventory, but I think we.

Pretty well positioned to be able to meet.

Pipeline demand that we are projecting over the.

For the next.

123 quarters, I think did pretty good in terms of inventory to be able to support all of it.

Okay. That's helpful. And then just last for me I was looking for.

Bumped competition, new surgical robots are come on the market were cautious with there and a lot more from some some of the competitors like Medtronic. So how should we just think about the basis for competition.

Going forward from here.

Yeah.

So I think the fact that it's a good very good very.

Good question, So I think.

We still continue to believe that did.

Good surgery in all different parts of the World every day. So I think we're looking at I think we welcome the competition and all the other players coming into the market and we are going to keep more.

Moving on the clinical front and advancing the platform as we go along.

Okay, great. Thanks, so much.

Thank you Frank.

Okay.

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