Q3 2020 PAVmed Inc Earnings Call
[music].
Greetings and welcome to the path of Med and business update conference call.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. It's the.
And he went to the acquired operator assistance during the conference. Please press Star Zero on your telephone keypad. As a reminder, this conference is being recorded I would now like to turn the conference over to your host Mr., Mike Gabriela The director of Investor Relations for Petmeds. Please go ahead Sir.
Thanks, operator, good afternoon, everyone and make your growth.
Director of Investor Relations.
That's true the spread and it's because of the cool.
Joining me today, and the car or early Sean and work Chairman and Chief Executive Officer.
And Dennis Mcgrath, President and Chief Financial Officer.
Well, we began and that the caution the comments made during this conference call arrangement.
The forward looking statements regarding the operations and future results of the continent.
I encourage you to review of the company's filings with the Securities and Exchange Commission, which identify specific factors may cause actual results or events it per materially from those described and the forward looking statement.
Factors that may affect the company and it does include the.
Not really true yeah.
The third of the inherent in research and development.
Excluding the cost of the time required to advance products.
The regulatory submission.
Well the <unk> parts of crude by rail of the tourists already.
Merck and acceptance of products once cleared and commercialize.
The company the ability to raise additional capital the competitive environment.
And that has not yet received clearance from the yes, yeah, the regulatory body market many of its products.
And it's been one of the curve and making pandemic and the burn business.
Our money expenses the significance of the curve of 19 pandemic, including the expense the.
And financial and operational results the dictated by among other things the success of uptick and payment the other parts of actions taken and response.
You were and uncertainties may arise from time to time and are difficult to predict.
Well, the first of the difficult or impossible to predict accurately.
Ladies and gentlemen are beyond the company's come true.
Well the further list and description of these and other important risks and uncertainties.
And for future operation the part one item one entitled Risk factors and the most recent annual report on form 10-K.
And with the Securities and Exchange Commission and any subsequent Oh, they sort of quarterly reports on form 10-Q.
So if the as required by law.
The greens and intention or obligation.
Probably update or revise and forward looking statement true what changes the expectation well in events conditions or circumstances on which is the expectations maybe base word of mouth breakaway to hit the actual results to differ from the is contained in the forward looking statement.
With that said I would like to turn the call over to be Shaunak or Dr. <unk> growth.
Thank you Mike Good afternoon, everyone and thank you for joining us on the quarterly call. The update Q1 of the business and that's certainly initially GAAP.
And we will just take some detailed and net of past the clear and it's actually it's much easier and over the past several months despite.
Despite ongoing public 19 related challenges of commercial activity of the accelerating out of expense.
Production and enthusiasm for the commercial G.I. health products among physicians is growing.
And as importantly, and the reimbursement landscape for these products has solidified, allowing us to look forward to revenue and revenue growth starting up the the new year.
Our balance sheet remains strong for at least the finances financing, providing us with sufficient capital to drive this promotional activity and advance our product towards commercialization.
Oh, great team of talented professionals working with our world class team of consultants advisors and.
The partnership continues to deliver and important milestones across our portfolio.
Hi, good called the 19 pandemic continues until the fall and winter surge. Let me once again begin with the short summary of pandemic related challenges the are facing and how we are addressing.
Despite the steadily surge there are no signs of all the terms to the complete shutdown of non emergency non profit making related cash.
We experienced in the first for the five months of the Pembina.
Healthcare system in the life Sciences industry the stores. The it has gradually mind, how did the labor necessary and non emergency care as it depends on the silver agent.
Although our commercial team does on occasion, and counter waxing and waning hotspot restrictions to get access to the conditions for sales calls the procedural planning you have successfully overcome these challenges through perseverance creativity and asking the.
Nearly all of our commercial activities.
Have moved away from virtual contacts back to traditional and person engagements.
Clinical research headwinds do remain with some slight slowing or pausing enrollment while others continuing undeterred.
The remainder of our product development regulatory financial and administrative activity had been entirely unaffected by the overnight.
I would now like to provide more specific updates across the four divisions.
Midland Basin, the invention infusion therapy and emerging innovations.
Hi, Good health Division of building a portfolio of complementary products designed to diagnose and treat condition, you think of yourself interest, including the spectrum of conditions arising from the fastest offers and reflects the he also known as chronic hyper.
Just can lead the highly leased philosophical cancer.
We're also pursuing applications for our product can have very prevalent the time until the condition called the using the filling the okay.
Two products used to that and if the check the commercially available.
You have to commercialize and other product the east of hearing 2021.
In addition, and there are other potential pipeline products, which are the subject of that the research programs within the submission.
And you get proud of what our team has been able to accomplish and the other two and a half years actually likely in the technology from our partners of Peace question is the World University.
It's gratifying to know that every day and she is across the U.S. and now benefiting from these groundbreaking product, which the national cancer Institute highlighted as one of the years significant advances and cancer prevention and give him. The FDA granted highly coveted breakthrough does the breakthrough device the niche.
Regarding the if the checker designed to facilitate early detection of Greece. The condition precursor conditions. The highly philosophical came through and patients with chronic heart burn also known as gas yourself and you will reflect on third party.
Chronic heart burn can lead to the nine changes and the surface sell the soft I guess.
Excuse me.
The nice changes and the share for sales of the lower soft goods called bears the south of goods will be the.
And transforming and she precancerous changes call dysplasia, which and can turn can lead to us off of the okay. Thank you.
South of your cancer of the Scourge and is one of the one of the and most people cancers and unlike nearly all other cancers. It seem to me to the growth of six fold in recent decades and its mortality rate has barely budged.
The most effective way to save lives.
And cancer from Cantor.
That is true early detection of cancers and their precursors other professional societies practice guidelines recommend screening for b and over 10 million high risk or patients to the texting treat dysplasia before and progress as the cancer tragically fewer than 10% of actually under the screen and using invasive and operating cost to be.
Over 80% of these the south of Joe cancer patients will die within five years of getting the.
The check is an FDA cleared cell collection device, which we perform targeted and protect the sampling of sales from the lining of the lower topic of as part of a five minute non invasive office based procedures and.
Serves as an alternative to invasive up and after the performed under anesthesia and a hospital or dedicated and ask the SEC.
He said there is the highly accurate next generation sequencing diagnostic test, which detects methylation methylation of changes that 31 site and two gene which condition.
And as correlates with the conditions, along the b to the softer joke, hence the spectrum.
Yes, the greatest performed on the samples collected with the centric and is commercially available as the laboratory developed test or LDC.
These products of the first and only commercially available technologies, which offer the opportunity for widespread screening of of the over 10 million high risk group pace for the handling recommended per screen based.
Based on very modest penetration of the U.S. GERD patients already recommended for screening we believe that the estimated addressable domestic opportunity for these products is at least several billion dollars.
We are commercializing use the guard using the hybrid model with internal sales management marketing and professional education working closely with the network of independent sales Rep. and.
And now have four regional managers covering the United States overseeing nearly 40 independent sales rep.
As covered Nike restrictions and medical centers and practice, the lifting and non emergency care began to the room reemerge in the late summer our team rapidly shifted from what had been previously mostly virtual engagement and too aggressive and personal engagement of our commercial activity efforts of dramatically ramp up over the past couple of months.
Moving and person sales call and clinician training as well as educational and marketing activities targeting both physicians and consumers.
These intensifying efforts are really beginning to bear fruit.
Each of our testing and the subject procedure volume and now growing exponentially. The volumes are doubling the about every four to six weeks and we can do we hope to continue to this growth.
Right the pandemic search.
Once again positions are finding ways to do these procedures the spike of it 90 the.
In fact, some have suggested that using he's the guard on sample of collective with these the check maybe even more attractive because short office based procedures are easier to perform efficiently and the cove and era, and endoscopy and procedural centers, which must be spread out to accommodate increased COVID-19 related safety measures.
Summary of in using east of guard as a risk stratification tool to prioritize the backlog of elective procedures caused by dependent.
Our engagements with our primary targets the gastroenterologists are going very well.
They are receiving this technology positive.
The east the garden Ace or check as important tool and they can integrate into their current practice to expand the funnel of patients diagnosed with the who must and then undergo surveillance monitoring and ablation treatment if they progressed as pre cancerous dysplasia.
The response has been positive from both small to medium practitioners as well as those and large medical centers. The smell. The median practitioners tend to flow quickly focus on growing their procedural volume both in the adopted the sweet and and their office day.
Both of the large medical centers, especially the academic centers focus more on the network wide adoption of.
Although this takes a bit longer to get up and running the pay off can be great at the brings and non G.I. physicians into the phones and an integrated approach to managing the spectrum of the the.
One. Notable example is one why your medical center here in New York City, where we have a very enthusiastic champion of is not just the increasing his procedural volume of standing out internal medicine clinics across the and lighting up.
Although our focus has been on Gastroenterologist large internal medicine and.
Practicing the main and attractive target.
Once the best practice out west the centralizing all screening and high risk patients into a single clinic setting where is the checkers performed and samples are standard for use of Greg.
Our hard work over the past 18 months some of the reimbursement front is also paying off final.
Finally, as the guard CMS payment the termination of $938 has been secured and will become effective January 1st.
On that day will begin submitting claims and billing for each of these degree of tests performed well.
Local and Medicare coverage determination of which we hope to secure assume will be the final piece of the reimbursement puzzle for the 60% of our target population, which is covered by Medicare.
We are also beginning of the payments and coverage process, the private payers and hope to start securing the and the first half of 2020.
As noted we have.
Well completed the necessary audit and certificate sort of certifications excuse the mid east to check for CE Mark approval in Europe, and pursue east of guard CE Mark self certification the.
This should allow us the launch these products in Europe, the two mid 2021.
On the clinical trial front as previously noted our two international and multi center clinical trial is the guard the one and two of our back on track falling and near complete shutdown of clinical research due to cover the Nike.
If you recall these trials support a future PMA submission for ft, and registration of East regard and meet the check and vitro diagnostics or I'd the.
One of the screening study of high risk patients and the other of the case control study of patients with non disease.
And woman and these trials and accelerating although unlike non research clinical activity clinical research does remain vulnerable to cover the 19 and winter slowdown.
We have 21 active U.S. sites and the overall enrolled 33 patients across the Tuesday.
Assuming the pandemic doesn't hold the fact, we expect to have an additional 20 active U.S. sites and nine European sites in the coming quarters.
Despite the slow downs were maintaining our and of 2021 target to complete enrollment in the study.
[noise], although we will not have Isa guard performance data until the end of the trials. We have received very encouraging you of user acceptance results today the.
The is the check procedure received very positive results with over 90% patient satisfaction.
Let me now briefly summarize some additional developments and our G.I. Health Division.
We're making excellent progress on the east no cure the Salford Youll ablation device to the.
Call East of share of the disposable single use thermal balloon ablation catheter, which uses our patent the tech and catalyst technology.
Two of blade, the south and you'll tissue.
And cleared and commercialized the secure would allow clinicians to treat the slapstick the before can progress the cancer and to do so without the need for complex and expensive capital equipment like current technologies from Medtronic and others. We expect the proceed with animal testing of prototype and with that FDA submission targeted for 2020.
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And the other night the either the University of Pennsylvania has completed enrollment and a pilot trial exploring the role of.
He said check and monitoring treatment in patients with Houston, the fill up the sausage guidance or yeah, we do.
And he is a very common but underappreciated allergy mediated condition, which currently requires multiple and based on the about Mr and of course.
Our other partners that the Fred Hutch Cancer Center, and Seattle and continue to hold their trial due to cold and of this trial will explore the role of these the check and Biomarkers designed to detect progression from non the slapstick the displaced the beds, which could greatly facilitates the surveillance of dairy space and so they can.
To be treated prior to the development of cancer.
We secured the exclusive option to license. These biomarkers if they prove effective in the clinical trial.
Now, let's move from GE health, the minimally invasive interventions, which includes karthik.
Capex is our patented single use disposable minimally invasive device designed to treat carpal tunnel syndrome, while reducing recovery times, the balloon catheter devices and sort of under the start of ligament tanks and good while pushing the moving tenants the way.
And activated bipolar radio frequency and Lightbridge precisely cut the ligament from the inside out and in a matter of SEC.
We believe capex will dramatically reduce recovery times compared to traditional carpal tunnel relief targeting an estimated 1 billion dollar and media the addressable domestic market opportunity.
Capex the granted Qs ft, a five 10-K marketing clearance earlier this year.
After addressing the COVID-19 related supply chain issue, we were able to secure and stopped machine and inventory and late August.
The commercial strategy for car Thats remained steady and deliberate unlike the using the check procedure of the complex procedures and and a rational speech, although significantly less invasive non traditional couple of tunnel release and does require technical skill, which comes with training and Procter.
As with any interventions of ice the critical first step before widely marketing. This technology. The answer to that is to establish the core group of wealth sales surge in ambassadors, who can participate and training capturing and evangelize and other surgeons, we have secured such a team of world class and his team who now serve on our car X Advisory Board.
First cadaver testing excuse me the first could average training session was successfully completed last week and we look forward to our first the U.S. commercial procedures and the coming week.
The next some brief highlights from our infusion therapy Division, which includes the portfolio and next flow.
And I always our implantable and process, that's where access device, which allows direct access to the bone marrow to deliver.
Hum medications fluids and other substances addressing an estimate of 750 million dollar market opportunity based on patients with poor vein and those with renal failure, whose gains must be carefully preserved for the current or future and chemo dialysis.
We are seeking an initial short term implanting ration indications of the FDA the novo pathway.
Our current activity is focused on discussions with the FDA on our proposed the IB ear investigational device exemption study and the United States. The to support this application. These discussions have progressed well and we hope to have final height. The approval very early next year.
The long term portfolio study and Columbia, South America has been on hold due to cover the lengthy and related travel and clinical limitations of restrictions. These restrictions have now been lifted and our team will travel the Colombian next month to initiate site visit with the goal of initiating enrollment in early 2021.
Our next flow intravenous infusion of system, which delivers highly accurate gravity, driven and fusions independent of the height of the Ivy bag seeks to eliminate the need for complex and expense of electronic infusion pumps for most of the estimate of 1 million and fusion of Liberty in the United States Each day.
The continued advance the next luxury intravenous infusion system through design for the full of development and testing. This work is going extremely well with flow accuracy raised the approaching the expenses electronic infusion pumps.
Expect the proceed with us the a five 10-K submission the early next year.
Once cleared we plan a targeted commercial launch and large medical centers focusing on the health care economics of our technology relative to electronic and Tc pumps.
We remain in the range deep and active M&A discussions with several strategic partners to license. The next lot of technology for disposable infusion pumps, which are used and ambulatory setting for outpatient the heath.
These partners are deep and diligence and their diligence process, including beginning to perform their own testing of of.
Of our technologies and their own laboratories, we hope to complete this process and consummate the transaction.
Once again, we don't have enough time to cover the other exciting projects, we are working on and our emerging innovations division.
Much of.
But here are a few highlights our disappear resolve of pediatric teams manufactured from a proprietary actually of silk technology.
Thanks to revolutionize the share of the estimated 1 million children, who undergo bilateral ear tube placement of each year.
We are now fully partnered with global manufacturer counting and cost us manufacturing and Technology Center and Virginia that work is proceeding ahead of schedule. We have recently received commercial grade and Korea spoke fiber and molded your tubes for Benchtop and animal testing, which will initiate form the we initiate soon.
Our solace non invasive and the IR and laser based blood.
Blood glucose monitoring technology is also progressing well the recently completed initial animal testing of the first generation prototype and of diabetic rat model the.
Those results were sufficiently accurate to allow us to achieve the R&D plan milestone of defined in our life.
We have developed the second generation prototype of dramatically improved signal to noise ratio, which should be ready for human volunteers estimate.
Our emerging the innovation team is also working on several exciting early stage technologies, including.
And the areas of the Ecmo cardiopulmonary support and mechanical ventilation ill now pass it onto the Dennis and Greg.
Thank you, Lisa and and good afternoon, everyone.
Our financial results for the quarter ended September Thirtyth 2020 were reported in our press release was published earlier. This afternoon and also and our quarterly report on form 10-Q, which was filed with the US you see or know November six.
Both available at the FCC Dot Gov and on our website.
With regard to the financial results for the quarter research and development expenses for the third quarter of 2020.
For $2.6 million.
Up.
From about $1.5 million for the same period and 2019 and the.
About $500000 higher sequentially.
Turning to the first quarter 2020 level as.
As you might expect the variation both sequentially and year over year is primarily related to clinical trial costs. The.
The product development costs.
The particularly the sequential changes positively impact the bike clinics, beginning to normalize operations given the slowdown in the second quarter related to the pandemic.
General and administrative expenses were $2.9 million for the sector for the third quarter of 2020 compared to $1.7 million for the.
The same period in 2018 and were about even sequentially.
The year over year increase reflects approximately 700000 increase in.
And sales staffing levels and the other sales related costs.
Together with an increase of approximately 500000 and consulting services related the patents and regulatory compliance financing costs and public company expenses.
That said reported a net loss attributable to common stockholders of $5.6 million or a loss of 11 cents per common share.
Also duplicating the net results in the previous quarter.
The press release provides substantially more detail related to the non cash charges occurring in the current and prior periods.
Also the press release provides the table and titled non-GAAP measures, which highlights the these amounts and loan with interest expense and other non cash charges, namely depreciation stock based compensation.
And financing related costs.
Give the better understand the company's financial reports and the.
Notice from the table day after adjusting the GAAP loss by approximately 1.1 million for these type of non cash or financing related charges.
The company reported non-GAAP adjusted loss and for the three months ended September 32024, and a half million or nine cents per common share.
Fab and had cash of 8.3 million as of September Thirtyth. During the quarter couple of received the additional net proceeds of approximately $7 million from the sale of convertible notes the conversion price of $5 per share per share.
So with that operator, we can now open up but of the call to any questions from our audience.
Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask the question. Please press star one on your telephone keypad and confirmation tone will indicate your line is and the question queue. You May Press Star two if you would like to remove your question from the Q per participant using speaker equipment and may be necessary to pick up your handset before pressing the star key.
One moment, please while we poll for questions.
Your first question comes from line of Frank Tech and in with the Lake Street Capital markets. Please proceed with your question.
Hey, Frank Good afternoon, and I think welcome Yep. Thanks.
Thanks appreciate it congrats on the progress this quarter just a few questions for you here I'm thinking about some of your early adopters of use of guard sounds like you're having some fantastic success with the initial adoption from patients. So just hoping you could take us to a layer deeper into utilization trends that your experience.
Saying, maybe how many sites are now stocking the sole guard and overall pace of patient receptiveness of the product.
So [noise].
The now in terms of the and.
Speaking of the adoption and the and the response.
The from physicians and patients.
It's been like you said, it's been it's been extremely positive.
I think as I've mentioned before you know we were prepared.
As we were entering since of the dji space and in our discussions with the Jain of physicians.
For some pushback as it relates to potentially cannibalizing their existing endoscopy business and so forth and that is just generally not materialized, we've had much and much easier time than we had expected and.
And making the case that this is the tool that they should be embracing that it is ultimately of clearly.
Clearly to the benefit of their patients, but also to the benefit of their practice.
There are patients with in their practices.
Just right there and patients who are undergoing calling off could the or are there for other reasons, who are high risk patients who they might not otherwise the prominent adopt the beyond who are candidates for the use of our testing.
And that our our joint activities targeting primary care and the recurring networks will ultimately increase the funnel of the pacing. So it's really been nothing but positive I mean, we've obviously have some sort of become just real champions and are doing cases, almost every day and are are leading the charge that's always the case.
With the introduction of New technologies, you got early adopters, who become champions and and bring other is along.
And it's been really study and and broad and I'd also like to emphasize one of the things that I said of my prepared remarks, which is bad debt, although were focused on gastroenterologist and the and we were doing so so that the procedures can be centralized and concentrated.
Where the disease is most known and and you know amongst physicians, who really own the disease, we're actually having really good.
Signals that there's receptivity within the broader medical community, including internal medicine and of the one example, both at the academic center here in New York as well as and the private large internal medicine private practice southwest of.
Very encouraging sign for that.
The position was the the patient response has been has been good as well and again I've mentioned of the the formal data that we're starting to get from their clinical trial, which shows really high user acceptance greater than 90% patient satisfaction, and thats going out and the and the and our commercial of clinical activity as well aware of patients.
And you know some obviously have concerns about slowing this and volume, but we've trained our operators really quite well too.
Educate the patients before the procedure and we are were achieving a high technical success rate and some of those who are able to swallow it and people. Appreciate the fact that there are that the achieving some comfort level of these are patients with chronic heart burn of.
And now are becoming increasingly aware of their risk the risk for developing.
In terms of a specific numbers I think let me ask Dennis to maybe chime in on on that will not be and were really kind of I.
I think Craig it's it's early in the game provided data sets and give some kind of predicted insight into what's occurring today I will give you some highlights but it we will be developing that dataset, we're seeing a little different and each type of practice.
And we're also drilling down and honing, our our message and the type of practices we're pursuing.
Which are the dynamics are a little bit different on each one.
But the gives us some some high level and the first of I don't want to provide any dataset today that gives an indication of one way or the other wins that dataset and is evolving and the you know and as the typical things you'd want to know and what's the utilization per store, what the same store sales quarter to quarter those metrics will develop and we'll start reporting on them.
As revenue starts and generate in the first quarter and we start to provide deeper color. So analysts like yourself and kind of figure out what that means presently and what that can mean prospectively as you build your models, but the give you some high level. The the the month of October was significantly higher.
Within the the month of August the first 10 days of November equaled, what we did and all of October we've increased the number of sellers out in the field that are doing a lot of prospects and those process that prospecting and starting to yield results today I think by the end of when we report on the first quarter, we'll have.
The greater feel of what that data set that will be beneficial to folks like yourself and earn it and our shareholder community in terms of what the past results might mean in terms of the future opportunities. We know the the total addressable market. We know what the response from the physicians is that also.
Speaks really well in terms of what that opportunity is the granularity of how to report on that will evolve in the upcoming quarters and be happy to give you the kind of color at that time cash.
And let me just add a couple of things so you know.
Non accounts, we've we've reported previously one hundreds of accounts that we've engaged with that number is multiplied several falls and then since then and on you know in terms of accounts that have product on the shelf believe that of numbers approaching about 100. So so we have plenty of of of sites right now we're focused on procedural volume and the.
Then the said really the last two two and a half months of really shown in the early nice inflection with cases doubling about every four to six weeks and.
And were confident that said that we'll be able to continue at a good pace and as I mentioned because were and we appear to be plucked plowing ahead, despite the surge and covered the.
Cases, and we're seeing this winter.
Well Oh sounds fantastic.
Just switching gears, a little bit too of the reimbursement side congrats on getting the final a scheduled test code determination for you So guard and.
Affective January one was just hoping you could give us a little feel for.
The revenue recognition with that if there's an opportunity to backfill. Some of these tests that you are doing right now and how you expect to start initially ramping revenue is when it's a little bit uncertain and let me just lumping art interruption, yeah, sorry, it's kind of Cortina one of the let me just start in terms of the mechanics, and and then maybe.
And comment on the on the accounting side. So we've been performing procedures. This year, but we have consciously chosen not to submit those and until we have an effective until we had effect of CMS and Medicare payments termination. So yes, we can access the we will be submitting the of starting January one.
Under the new code and we have the full year to submit the the with some of the backlog that you've mentioned will start to kick and as we start committing goes under the under the effect of payment by January Onest, and then from that point on we will be submitting claims and.
And billing.
And procedures on an ongoing basis.
Obviously, there was a time line between.
Claim commissioned the land and.
Receipt of payment and you know about that'll that'll affect sort of the timing of revenue recognition of Dennis would you like to try and any of the for them. Yes sure. So the the payment of lease and said store and CMS for Medicare starts to take effect January Onest and we can bill in 2021 for procedures performed the 2020.
And one of those procedures were performed within 12 months of the day, we invoice and it's our intent invoice all of these procedures soon in January and the the GAAP rules the require us to.
To be able to have a definitive understanding of what the estimated collections are on each invoice to build to recognize revenue based upon the invoice and most companies who go through this process. There was a period of time of where the evidence and.
Evolves to where that predictability of invoice translating the cash comes.
Comes about so.
Early stages of this we will recognize revenue on cash and seats part.
Part of our targeted audience or in the private payer bucket and.
And those folks who are being.
Being tested we will submit claims to the likes of all of the private payers the.
There'll be some denial of there'll be some payments there'll be some clarification.
Clarification in terms of coverage policies that will become clear through 2021, adding to the predictability of that invoice the cash.
Election cycle, and when we get to the level of predictability and then we'll start recognizing revenue on the invoice basis for out of the accrual basis of you'll rather than the cash base, but keep in mind that our targeted audience. If for this disease and the precursors to it is a signal.
This again of.
Medicare.
Patient population, it's somewhere between 60% and 70% of our target audience and as it becomes definitive as to what the Medicare payment and with this determination and that there are no denials or denials on a significant basis until that yields of the process has worked out.
Once that process is worked out the becomes predictable start being able to recognize revenue for the Medicare patients likely sooner at the end of.
Then on the the private payers is that the.
Takes root and 2021 hopefully that explains.
Clearly the the the revenue recognition that will be going through and the early part of 2021.
Perfect and income and just last one from me to touch on the Capex business, a little bit of like a good commercial progress there first manager and the door.
Surgeon group set and starting to look towards first commercial procedures and just hoping you could talk about the ramp of that business a little bit more and when you expect to maybe put the put down on the throttle the commercialization throttle a little bit more aggressively with that offering.
Yeah, something a little bit hard to do quantitatively, but I'd say the concurrently map out the of the quality of the path from a qualitative point of view. So as I mentioned the goal is to have a lot and the national network of well trained very committed.
And surgeons, who are not just not just the opinion leaders, but but advocates of ambassadors, but I actually conserve as trainers are proxy for the procedure.
And so we established a group of five will likely will expand that a bit more over the coming months and we're getting them trained and will get them to start doing getting some procedures under their belt over the coming months. Once we reach that so you know, it's going to be fairly steady and deliberate and you might say slow for that for that early part but.
Once we have a core group of of six 5000 to a dozen of surgeons across the country, who have done we've done the meaningful procedural volume have got the procedure down have home the procedure collectively remember him and any early introduction, there's there's an editor of development process and happens with with the.
As you introduce the procedure and that's part of the reason to get to get a the deliberate start is to learn from the early experience of that when you expand further the once the once that group has had sort of the.
The good amount of the cases under their belt and feel comfortable with the procedure and feel comfortable and participating and training and proctoring.
One of the Bennett could move rather quickly and then we know what was the Miss is not sort of a flow linear ramp it's really it's really a slow and steady per space.
And followed by and and sort of more of a more accelerated phase once we have that core group of.
The running.
Got it and that makes sense all right. Thanks for taking my questions and congrats on the progress and the quarter. Thanks, a lot of Frank.
Your next question comes from the line of Anthony Vendetti with Maxim Group. Please proceed with your question.
And thank you.
Good good leash and how you doing Dennis.
And just wanted to follow up a little more on on east of Guardians of check. So I know you are performing some of the procedures.
The billing.
Won't start until one one.
Hey.
Any way that you could provide a little bit more of color on time and how many of those procedures. So far.
Just to try and get an idea of what the ramp spin and then and what does talk a little bit about.
COVID-19, and the impact.
That's all of you handle the [laughter].
Tennessee filler.
Yeah of course, I was on mute and I gave and okay eloquent answer [laughter] Anthony I I think we're going to the deferred to the the response I gave to Frank in terms of what that dataset looks like we gave kind of high level well the us speed ramp in terms of November overall.
Coburn, we really just got started here towards the end of August with the clinic start and to trickle open the little bit earlier than that and.
I think the there the the kind of the number of clinics the number of procedures per clinic.
Same store sales month over month or quarter over quarter are all things that we expect to the reporting upon and that dataset will become clear for us that can help with that kind of question and what that represents the the future and the and I'd like to defer that until at least the next quarter to be able.
To provide that level of color and detail.
As we see the different types of cash.
The Unix and and and the subsets of their services in those clinics become clear in terms of our pursuit of a future clientele. So I think we'll defer that sort of the till the next call.
Okay.
I'll, just say that I thought that was the inteliquent as well Dennis so.
[laughter], that's why that's why I defer to him and quick but and I guess then can you just talk about whether or not you are seeing.
Hi, Rob.
And impact from Cobot, 19, or Whitney Sean said during the call as the hospitals have figured out how to work. During this and then make now the we understand covered a little bit better and and so would it be accurate to say.
It's not it's not having as much of an impact on the uptake and as far as you can tell yes point and I think that's I think that's I don't think that's an overstatement really I think the I think of people have figured it out people are doing procedures and as I mentioned, we have advantages with these the guard and east of check and that the procedure of simple and office.
Based so you know what used to me maybe be a 30 minute true.
Total time for endoscopy than a and and adopted the center is probably doubled now because of just because of the extra clean and that has to happen to speak uses of the technology. So we've seen some.
Some commentary that the other than that there might be actually you know the advantage of doing these regard and.
The in and a covert setting because of that and.
So yeah, it's just been our R.R. and no our experience that that sort of break has been lifted and that hasn't really changed as we've gone through this fall and winter surge you know our ability to get access to physicians and the commercial setting has been pretty good and if you recall part of the call.
Much of that activity was was being done virtually that's pretty much eliminated we were getting our folks and their occasionally you'll get a hotspot that that comes up were worth and tighten a little bit but one of the things that we've been doing with our fourth theme is that we've been having our sales and management managers be more on the ground and the and that's supervisory.
And actually and sort of and the trenches more and so that's actually allowed us to be responsive to you know the.
The the occasional sort of hotspot related restrictions were taking sort of quickly move from one location to another and I've seen and we have a couple of examples of that this week. So you know so far it doesn't seem like the you know the the surge is going to hamper the rapid the of exponential growth and cases that.
We've seen over the last couple of months just doesn't seem to be.
Affecting us and and for the reasons I just described.
Sure sure I I and I would just add to that our people are and al traveling and with the exception Arden and certain exceptions, not able to get into sort of clinics. We are paying commissions to the independent reps or valid tests that are being done through our process.
So you know as as we shouldn't you had said that that is ramping up we are seeing definitive results and the lies.
As revenue starts the click and here in January Onest and start.
The providing the additional color on on various metrics look the key as you know Anthony once you sit with US the set of metrics you're obligated to continue to report on them, we want to make sure that we're the first set of metrics. We provide one on revenue dissection and it's something that all of us are content.
And with to be able to measure of performance and and give some guidance in terms of what the future of is likely to hold by duplicating more of what we are currently doing and I think by waiting till January Onest I think all of us will be in a better spot in terms of the reliable metrics the give us does kind of insights.
Sure and stood.
And then just following up on Capex and you mentioned the initial network of care wells.
Before I go into full commercial launch.
And.
Approximately how many cave wells.
And and how long do you think that.
Net feedback.
And we'll be I mean, how how long is it necessary.
To wait for that feedback before you feel confident to do the come or a full commercial launch yeah. Just the just to clarify one of the if not the feedback so much as their their experience and their role as proctors and train right. So and some of the feedback and some of it is procedural development, but the primary the primary purpose of the OSAT.
Yes, and this early group and as for to establish the cohort of the folks the conservative that's trainers and ER and crackers and and for general evangelize the risk so.
So we have five of I think I think you know somewhere between five and tennis is probably the is probably what this initial cohort will be I will have to get the mall train that you know that is who we have to get them to the way that they do of the travel for that to sort of cadaver lab. The do the training. The first one went quite well last week.
And no I don't I don't think of it's not a tough and I think one each of them gets you know a couple of dozen cases under their belt.
What's the what's good success and the kind of the level of comfort that they feel that they can train and procter other surgeons and I think we should be we should be good good to go with the broader for the broader release.
And to a broader audience.
And I don't think that should take them and once once we get them trained and these are very busy source of the typical answer Jim could do the 12, even upwards of 20, a couple of kind of leases and day.
So they're very busy so once they have it under their belt and their training and.
Don't expect it will take a long time for them to get the records of clinical experience for us to feel comfortable of utilizing them as part of a and why the release.
Okay great.
Thanks, very much I'll hop back in the two appreciate it. Thanks, Thanks, Anthony Thank the Anthony.
Your next question comes from the line of Ed Woo with Ascendiant capital. Please proceed with your question.
You had good after we ask the head.
My question in terms of East of guard and we saw check how often do you think of the patients will be utilizing either of these.
When you say how off of could you clarify some extra items and I understand your question.
And as I say not yeah.
Yes frequencies in terms of of the beating did not repeat at home sales.
Yeah, So it's a plus the.
And make sure I understand the myself, a typical patients who have chronic.
Chronic heart burn or GERD, who has risk factors and make them appropriate for screening of which the again, there's millions of patients like that.
Well under go and if the guard test to determine if they have barretts esophagus or something further along the spectrum and their net positive and will undergo a concern I can and docket. The not just the confirmed the diagnosis, but to determine whether they have more advanced disease displays.
Or cancer, which needs to be addressed and media.
The of those who just have non just lasted barents well enter into what's the currently and established surveillance and regimen, which is typically and endoscopy every three years, although as I mentioned, we're trying to develop tools and technologies to two and.
Work within that and the surveillance kind of well a negative patients.
It's not clear that a negative patient needs any further testing.
And.
Finish and may choose to do so at some 0.3.
Three five years down the road.
If the have particularly if the have ongoing persist and something by the negative considered a negative and generally those are not there's no mandatory follow up for those patients.
Great and so you don't anticipate and something that the more frequent like the annual or semi annual basis.
Yeah, I mean, it may turn out that once we get our data from the clinical study and we actually have some longer term.
The data that we can that we would.
No established such a bunch of screening regimen, but right now there really is no foundation for that when we're talking about is the screening yeah.
Hi, risk patients, who have established chronic or and the fair negative than the than the likely to be negative for the foreseeable future.
All right and then because you mentioned earlier there is such a.
Big gap between people, who should be tested recommended to be tested and people actually being tested have you guys considered doing direct to consumer marketing.
Yeah that is that's always been a part of our of our over the long term strategy and right now were putting a lot of effort and the establishing the foundation of for that of.
This is the disease.
You can sort of divide diseases and sort of the patient facing and those are not patient facing and this is clearly a disease that patients can understand and we can educate them on the relationship between their chronic heart burn of which they typically believed to be just something that symptomatic of they have to they can treat with let's say the MPPR riser and.
Methods to try and really the symptoms and educating them on the relationship between between that and the and the rest of it puts them for four of chronic prolong for us of dual cancer as part of the educational process, where we're establishing right now as we speak once we have gotten some traction on.
The reimbursement side, and and and we have a little bit a little bit well of the further along we fully intend to invest and.
And aggressive direct to consumer marketing of.
The platform and of for the reasons I just described the Dennis do you want to add a little bit today.
So I I think that's a.
That's exactly on point the.
I don't think the jitters anything else to add to that to the the.
More color there.
Great sales very helpful. And then my last question is just.
You got to many of products that are in various stages of those nations or and trials are.
Are you still looking out for additional products to add to your portfolio and has called the present additional opportunity for people to present the products for you.
And answered, yes, [laughter], sorry, sorry for the cycle of and I think you've got a little you must have some the ASP.
So some of our company from the onset as always and build on the notion that we will look at had had the technologies of that provide opportunities.
The opportunities for that address unmet clinical needs and provide market opportunities and we've done that so we've we've licensed three technologies, obviously coal obviously, if the got of each of which are our leading and potentially the most valuable products are the ones that we had several of the result of that process, where we searched and found this technology and life.
But from an academic medical center. So we are we are constantly running very regularly presented with technologies and our and evaluating technologies the call along the way and there are several that are that are and the pipeline that were in the sort of an active process of of of evaluating and the answer to your.
Question. The has a couple of them actually are directly related to cover the income.
The answer to both questions yes.
Great well, thank you and good luck.
Right. Thanks, a lot of and really take that.
Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back the Doctor lease on Aklog for closing remarks.
All right great. Thank you all for joining us this afternoon and four of the great questions from our.
Alice and we look forward to keep you abreast of our progress the unusual leases and beyond your periodic conference call such as this one and.
And the please remember to want to keep in touch with of the to contact might have gorilla and Jay and age and having said that calm and continue to keep up with our news through our Investor Relations website and by following us on Twitter and Linkedin and the key.
In the rest of our website <unk>. Thanks, again, everybody have a great day.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
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