Q1 2021 IsoRay Inc Earnings Call
This time, all participants are listen only mode. A brief question and answer session will follow the presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad either.
As a reminder, this conference is being recorded it is now my pleasure to introduce your host Mark Levin Investor Relations. Thank you Sir you may begin.
Thank you operator.
Good afternoon, and thank you for joining us today for ice raised fiscal first quarter 2021 earnings call.
Quarter ended September 32020.
Before we get started I would take a few minutes to read the forward looking statement.
Certain statements in this conference call constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 as amended.
When used in this conference call words, such as well.
Will believe expect anticipate and clarity.
And similar expressions as they relate to the company or its management.
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 nine.
18 95.
These forward looking statements are based on managements current expectations and beliefs about future events as of today November 10 2020.
As with any projection or forecast they are inherently susceptible to uncertainty and changes in circumstances and 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 Safe Harbor statement and risk factors listed from time to time in the Companys filings with the Securities and Exchange Commission.
We will begin today's call with Laurie Woods.
I served as Chief Executive Officer, and then Jonathan.
I served as Chief Financial Officer, who will discuss the fiscal first quarter 2021 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 raised fiscal first quarter 2021 earnings conference call for the quarter ended September Thirtyth 2020 fold.
Following my prepared remarks, our Chief Financial Officer, Jonathan will provide a more detailed review of fiscal first quarter financial results.
As we continue to navigate through these uncertain times I am encouraged by ISO raised performance in fact, I'm increasingly enthusiastic about the long term opportunities for cesium 131.
Revenue for the first quarter of fiscal 2021 increased 3% versus the year ago quarter.
Two $2.38 million. This is in line with the guidance of $2.3 million to $2.5 million for the quarter. One revenues issued at our fiscal year end 2020 earnings release dated September 17th.
2020.
Obviously, we are still not back to pre pandemic levels as is evidenced in our year over year decline in revenues for prostate.
This is understandable given the factors at play.
So these are coping with the significant impact from the limited volume of patients.
Patients have been delaying treatment other concerns due to COVID-19.
This is particularly evident in the treatment for low and moderate risk prostate cancer patients, which makes up the majority of the prostate brickey therapy market.
Our patients are also typically older men, who have not been inclined to go to the hospital out of concerns over COVID-19 exposure.
We believe that the results of patients delaying treatment creates a backlog of procedures that by necessity will flow through the system.
Well. These cancers are slow growing the reality is the cancer is not going away and will ultimately need to be treated.
We are seeing a gradual increase of prostate cancer patients being treated since the spring.
Despite these challenges we are continuing to move forward on a number of fronts, including building upon our leadership position within the prostate braking therapy market.
Clearly this remains an important given that the prostate brickey therapy market represents a substantial growth opportunity for the company.
We took an important step forward with the full market release of our blue build disposable delivery system in the fiscal first quarter, we expect blue Bell to gain traction throughout fiscal 2021 now that it is readily available to a wider set of customers beyond those relatively few customer.
Others, who have had access to the product previously.
We continue to believe that this proprietary product will enhance the growth of our market share within the prostate breaky therapy market.
We also expect our growing leadership role in prostate breaky therapy to serve us well in capitalizing on what we believe could be the future accelerated growth driven by the changing reimbursement landscape.
In late September CMS approves, the radiation oncology alternative payment method or far away P. M.
Close to be effective January 120, 21.
As a reminder, this model provides for a single bundle payments for a 90 day episode of radiation therapy services.
This applies to 17 different disease sites, including prostate that take place in the outpatient setting.
Since CMS action they receive feedback from the radiation oncology community regarding how the implementation of this model will affect provider practices.
The feedback included comments relative to the already challenging COVID-19 environment.
As a result, the model start date has now been delayed until July 1st 2021.
Importantly, it includes initial mandatory participation up 30% of all radiation oncology practices.
It's important to note that this.
Key reimbursement change and radiation oncology is part of the broader move to value based healthcare in this country.
Well, we expect the direct near term benefits to ice ray will likely be modestly incremental we believe there could be more meaningful long term gains.
We see the breaky therapy industry as you likely know beneficiary relative to other radiation treatment options under the spot rate value based model.
The compelling attributes of cesium 131 breaky therapy.
There should the ice ray well in this involving reimbursement landscape.
We believe it's all about the value proposition.
The positive features of Cesium 131, Breaky therapy include its value as a low cost highly targeted treatment, which is supported by a series of long term data demonstrating its efficacy.
We are taking steps to leverage the many benefits of cesium 131, recognizing that providers are planning for the future.
We are reaching out to an increasing number of providers, who currently do not have a breakeven therapy practice, but are actively considering how breaky therapy may fit into their treatment paradigm.
Turning to our efforts outside of our core prostate business Cesium 131 continues to emerge as an effective option for difficult to treat cancers like brain head and neck and others.
Understandably treatments of these types of high risk cancers have generally not been experiencing the same degree of pandemic related delays that the prostate market house.
In the first quarter, our non prostate revenue increased 104% versus the prior year quarter to a record $494000 that.
The majority of this increase was for the treatment of brain cancers.
There was growth in both the sales of Cesium 131 stage, two power gamma tile therapy and sales of non gamma child brain cancer applications.
Teaching medical technologies tells us the first patient has now been enrolled in the gamut child registry trial. The focus of the registry trial is to continue to gather clinical data in support of gamma trial therapy and further adoption.
We're also continuing to explore how our proprietary isotope maybe effective in the treatment of additional cancers.
We recently entered into a research grant agreement with a leading cancer center to study the treatment of another static melanoma.
In this immuno oncology studies cesium 131 will be used in combination with immune checkpoint inhibition.
[noise] metastatic melanoma is the most virulent form of skin cancer, often spreading to lymph nodes, the lung liver brain and tissue under the skin.
This study follows our recently announced agreement with the University of Cincinnati Physicians company to study the combination of cesium 131, with the immunotherapy drug Keytruda in recurrent head and neck cancers. We are excited about these exploratory studies and what they mean for the potential.
Expansion of immuno oncology treatment options using cesium 131.
We will continue to keep you updated as these studies progress.
These and other investments in research and development laying the groundwork to bring the therapeutic benefits of cesium 131 to an increasing number of cancer patients overtime.
As we have been distinguishing ourselves and our role in the breaky therapy market. We have moved to make sure. We safeguard our innovations. We recently secured a patent for our Blue Bill loader, which will be enforced until 2037.
We have also filed a provisional patent application for device design to achieve directional dosing using our cesium 131 seats.
This device is a bad that holds the CZ 131 seeds to focus the radiation to a specific treatment area.
The device is fixed to a directional mesh that can be used to treat pancreatic cancers as well as retro purchase Neil Sarcomas.
We see Uni directional breaky therapy, utilizing cesium 131 is a highly attractive potential therapy for advanced abdominal cancers as well.
In this practical application the device would be aimed at cancers of the abdomen that invade the abdominal and pelvic floor.
Such as advanced cancers of the colon and rectal and advance Gee why in cancers, such as ovarian and uterine cancers.
The concept will likely be investigated initially with the recurrent cancers I just mentioned were external beam radiation therapy has previously been administered.
Finally, I would like to update you on our October 20th public stock offering.
Hi, along with the majority of the executive management team and the board of directors participated in the offering that was largely bought by institutional investors through it the company raised $9.5 million in gross proceeds.
Which significantly improved the company's liquidity position for the foreseeable future.
It also solidifies our compliance with the New York Stock Exchange American listing requirements.
In closing our fundamentals have not changed cesium 131, or CTM blue as it is known commercially represents an important new treatment option for patients and doctors who care for them.
I remain optimistic about our growth opportunities and the additional potential for our growing product offerings [noise].
Now I will turn the call over to Jonathan to review the results of our fiscal first quarter in more detail.
Thank you Lori [laughter] I'm going to discuss some of the financial information that was contained in our press release in fiscal first quarter ended September Thirtyth 2020, we released a short while ago.
We anticipate that our form 10-Q will be filed with the FCC on or around November 13.
Revenue for the first quarter ended September Thirtyth, 2020 grew 3% to $2.38 million versus $2.32 billion for the same period last year.
Prostate brickey therapy revenue declined 9% versus the first quarter fiscal 2020, that's procedure volumes continued to be impacted by code at 19.
First quarter revenue was comprised 79% for prostate braking therapy with the balance or 21% of revenue attributed to other braking therapy.
Driven primarily by sales to treat brain, which included revenue from GTN medical technology.
Other braking therapy revenue increased 104% versus the first quarter fiscal 2020.
Gross profit as a percentage of revenues for the first quarter ended September Thirtyth 2020 was 52.3% compared.
Compared to 53.4% for the quarter ended September Thirtyth 2018.
The modest gross margin decline was primarily the result of higher isotope unit costs, resulting from increased transit cost due to the COVID-19 pandemic decreased international commercial flight capacity.
And labor also increased slightly due to annual merit increases compared to the first quarter of fiscal 2000.
20.
First quarter gross profit dollars, a $1.25 million increased 1% when compared to the same period last year.
Total operating expenses, consisting of research and development sales and marketing and general and administrative.
Totaled $1.96 million or a decrease of 5% compared with the first quarter of 2020.
Total R&D expense increased 34% versus the comparable prior year quarter to $312000.
The increase in total research and development expense was primarily the result of increased protocol expenses related to new research agreements as well as a mutually agreed termination grant agreement.
First quarter of 2020, which resulted in a reversal of the accrual that was not repeated during the fiscal first quarter 2021.
This increase was partially offset by a reduction of development expenses for the blue coat delivery system versus the comparable prior year period.
Sales and marketing expenses decreased 29% versus the comparable prior year quarter to $581000.
The decrease in sales and marketing expenses was driven primarily by a significant decline in travel and trade show cost due to coordinate restrictions as.
It was wrong decreased incentive compensation, resulting from lower revenue growth compared to the prior year comparable period.
Gene X amount of $1.07 million represented a decrease of 3% versus the fiscal first quarter of 2020.
The year over year decrease was primarily the result of decreased travel costs due to covert make t. restriction as.
As well as decreased employee hiring expenses, which were partially offset by increased insurance expenses.
Hi, sorry narrowed its not lost two $713000 for the first quarter ended September Thirtyth 20, Twond versus a net loss of $860000 for the quarter ended September Thirtyth 2018.
The net loss per basic and diluted share was one cents versus a net loss of one cents for the quarter ended September 32018.
Basic and diluted share results are based on weighted average shares outstanding of approximately 68.9 million.
Fiscal first quarter 2021 versus 67.4 million in the prior year period.
As of September Thirtyth 2020, the company had cash cash equivalents and certificates of deposit that totaled $1.94 million compared to $2.39 billion at the end of fiscal year 2020 ended June Thirtyth 2020.
The company has zero long term debt.
Sure holders equity at the end of fiscal first quarter 2021 totaled $5.1 million versus $5.7 million at the end of fiscal year 2020.
During the current fiscal second quarter, a 2021 the company closed the public offering of 18.27 million shares of its common stock at a price of 52 cents per share.
Gross proceeds before underwriting discounts Commission estimate.