Q4 2020 Viveve Medical Inc Earnings Call
Good afternoon, and welcome to the previous full year 2020 financial results and corporate update conference call all participants will be in listen only mode.
If you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Speaking today on <unk>, Chief Executive Officer, Scott, Durbin, and Jeannie Swindle senior director of corporate Communications.
After today's prepared remarks, there will be a brief question and answer session. Please note that this event is being recorded.
I will now turn the call over to Jeannie swindle. Thank you operator and welcome everyone. Before we begin we would like to remind you that this conference call may contain forward looking statements regarding future events or the future financial performance of the company.
Any statement that is not a statement of historical fact is a forward looking statement. This includes remarks about the corporation's projections expectations plans beliefs and prospects. These statements are based on judgments and analysis as to the date of this conference call and are subject to numerous important risks and.
So that could cause actual results to differ materially from those described in the forward looking statements.
These risks and uncertainties are described more fully in the Companys annual report on form 10-K, and other filings made with the S. E C, which are also available on the company's website.
Also any forward looking statements represent managements view only as of the date of this conference call and should not be relied upon as representing management's views as of any subsequent date.
I will now turn the call over to Scott Durbin. So these chief Executive Officer.
Thank you Jamie and good afternoon, everyone. We really appreciate you joining us today.
I'd like to start the call. This afternoon with a short strategic business summary, followed by a high level review of our 2020 full year financial results.
I'll, then remark on our stress urinary incontinence clinical development program and the pivotal pursuit trial that is underway in the United States before opening the call to questions I will close with our plans to achieve an S U I indication and the enormous commercial opportunity it represents.
2020 was a challenging yet transformational year for <unk> as a result of the dedicated efforts of the entire company and the achievement of critical milestones for our S. U I program.
The beef successfully pivoted in 'twenty 'twenty, becoming a euro gynecology company with a focus on S. UI and launched our pivotal U S pursuit trial.
As we move forward over the next 18 to 24 months are core areas of strategic focus will be to first continue to advance the clinical development program and S. UI by successfully executing the currently underway pursuit trial and achieving a positive data.
It out there.
And thereafter, if positive to commercially launch the first F. D. A approved patent protected and a vaginal office based treatment for urethral hypermobility to improve as you I in women.
Secondly continue to focus our commercial efforts on the United States and Asia Pacific regions and expand the installed base of systems throughout the world.
Additionally, targeting core specialties of Euro gynecology urology.
And gynecology.
And finally third continued to support our customers to our internal customer care team and successful initiatives, which continue to drive increased consumable treatment tip utilization and sales.
Before I cover our financial results for the year I'd like to comment qualitatively that after a challenging commercial market in 'twenty 'twenty conditions are improving.
Receptivity to new technologies from practices is increasing patient flow and procedure volumes are improving and the stagnant and often dormant market, we experienced particularly in the U S is showing strong signs of improvement in early 2021.
Today, we reported total revenue for 2020 are approximately $5 $5 million from the global sale of 31 systems and in the U S. Under our recurring revenue model program on.
An additional 29 systems were placed.
As of December 31st 2020, we now have a total installed base of 857 systems worldwide.
Additionally, a total of approximately 8900 disposable treatment tips were sold globally in 2020.
Total operating expenses for the year were approximately $18.8 million compared to $31 $7 million for 2019.
This significant decrease is the result of the company's strategic alignment.
Along with taking operational measures to lower cost and reduce cash burn as we focus our efforts on our S. U I program.
On a pro forma basis, we ended the year in a strong cash position cash and cash equivalents, including the net proceeds of $25 $2 million from the company's January 2021 financing were approximately $31.7 million.
The success of this upsized public offering in January was a testament to the enormous market opportunity for believes noninvasive dual energy technology and S UI and underscores the confidence in the company's strategic path.
Capability to execute and potential to achieve positive clinical results in our U S pivotal pursuit trial.
Importantly, this financing provided us with the capital resources to support operations through the end of 2022, including the planned completion of the pursuit trial.
And as we continued to operate efficiently and at a significantly reduced cash burn rate of $3 million to $4 million per quarter.
I'd now like to direct my remarks to our stress urinary incontinence clinical development program.
Our successful pivot to S. UI in 'twenty 'twenty was fostered by many important milestones that were achieved.
These include the positive preclinical and S. UI feasibility study results reported positive data that validated our new inert sham treatment tip that produces no tissue nor clinical benefit.
F D. A <unk> approval of our strength in pursuit trial investigational device exemption.
Formation of our preeminent clinical advisory board and incontinence.
And the issuance of a newly issued U S. S. You on method patent.
At this point I'd like to summarize the condition of Eshoo I on the opportunity. It represents for those on the call who may be new to the beef.
<unk> is a condition that affects an estimated 25 to 30 million women in the United States alone and based on our estimates represents a $10 billion to $12 billion total available consumable market opportunity.
The day few effective noninvasive treatment success that reduce leakage associated with that she lives in fact, the current spectrum of therapeutic options for women is limited to physio therapy at one end of the spectrum, such as Keagle exercises electrical muscle stimulation or biofeedback.
Which are all designed to strengthen the pelvic floor musculature.
To the other end of the spectrum in invasive approaches such as bulking agents or sling procedures.
Accordingly, there is a large GAAP in the treatment spectrum, but it represents a tremendous unmet need and an opportunity for a clinically proven treatment option.
We believe the beef has the potential to expand this continuum of care.
Our noninvasive and do vaginal office based treatment, which can be completed in a physician's office and approximately 45 minutes may safely and effectively improve urethral hypermobility insignificantly reduced leakage for women, who suffer from S. UI.
Moving to an overview of the pursuit trial pursuit is a randomized double blinded sham controlled trial with an intended enrollment of 390 subjects with moderate S. UI defined as greater than 10 milliliters up to 50 milliliters of urine leakage on the one hour pad weight test.
And up to 30 study sites in the United States.
Randomized in a two to one ratio subjects in the active treatment arm will receive or cryogen cooled monopolar radiofrequency or C. M on RF treatment, while subjects in the control arm will receive an energy lists or inert sham treatment.
And again I want to highlight that the sham treatment administered in the control group for the study is a clinically inert or true sham treatment.
The primary efficacy endpoint of the pursuit trial is the comparison of the proportion of patients who experience greater than a 50% reduction in urine leakage compared to baseline on the standardized and objective one hour pad weight test at 12 months post treatment versus the inert Sham procedure.
The study also includes several secondary endpoints also assessed using the one hour pad weight test the three day bladder voiding diary and other behavioral and quality of life questionnaires subject safety will also obviously be monitored throughout the study.
I'd like to take this moment to acknowledge the guidance and support from the many experts who make up our newly formed clinical advisory Board and who contributed to our strength and an enhanced study design.
Currently patient enrollment is underway and it's going well and we continue to expect full 390 patient enrollment by the end of the second quarter or very early in the third quarter of this year.
And again positive data results from pursuit may support a marketing application for a new S. U I label in the United States and abroad and opened a multibillion dollar commercial opportunity for <unk>.
Today, but leave us in a strong position to successfully execute our core strategies over the next 18 to 24 months.
In advance of and in preparation for a potential FDA approval of an S. U I indication in the U S.
In 2021 we now have the capital and resources to execute this strategy are lowered cash burn rate a newly designed and highly powered pivotal last shoe I trial underway in the United States and a shifted commercial priority to the two largest markets in the <unk>.
World, The United States, and the Asia Pacific region, with a focus on expanding our core market installed base and procedure volumes all in a 2021 commercial environment that has begun to significantly improve.
I think the talented and dedicated team at for the for their tenacity throughout 2020, which has provided us with this tremendous opportunity to potentially expand the S. U I continuum of care with a noninvasive and do vaginal treatment option for millions of women who suffer from us.
Why.
Again, I'd like to thank everyone for participating in our conference call. Today. Operator. This concludes our prepared remarks, and we can open the call to any questions. Thank you.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
Our first question today will come from Jeffrey Cohen with Ladenburg Thalmann.
Hi, Scott.
Hi, Jeff how are you thanks for joining today.
No problem, it's a pleasure to be here. So a couple of questions on the.
On the enrollment do you expect to add on.
How has that occurred throughout two centers number of centers that are enrolling now or how many.
Yeah, we're up to I'd say, a little over 20 centers right now who are currently enrolling we've got a handful of debt or are in the IRB process, we're going through site initiation visits and training, but we expect them to be up to speed in the next couple of weeks.
Okay, and Theres no type of interim look so the the Penguin measurement is at month 12, or your chicken looks at a earlier months. So we are taking are both three and six months looks on pad weight.
From a responder perspective, and also from a mean change from baseline perspective, as well as three day voiding diary.
You know collecting those at those time points as well, but we won't have you know we won't have an unblinded look at any of those time points, but we will have them at the end of the 12 months studying.
Okay got it and then back to your on your base business currently on.
Could you talk about that a little more it feels like there's some upside to be held on the.
On utilization.
News did you call that out as far as on geographies that Youre seeing recently and obviously, we don't expect any guidance but.
It feels like.
At the moment 21 could be better than 20 on the top line at least from how we're looking at it yeah. We certainly expect it to Jeff you know 'twenty 'twenty was obviously difficult, particularly in the United States, where the Asia Pacific region recovered far more quickly in 2020 and actually can.
Tribute it quite strongly to the 'twenty 'twenty results, but here at the beginning as I mentioned in the prepared remarks in 2021 I think it's a it's where certain day market is improving.
We're certainly seeing clinics that had to close down in 2020 reopen up order tip start to treat patients see and improve patient flow.
So you know we're optimistic that we're on the uptick here and.
And that should translate into a better year for us from a financial perspective.
Okay, and then as far as Opex going forward it sounds like on the baseline from 'twenty 'twenty carries through to 2021 plus one on 100.
10% to 30% based upon on the clinical work as well as perhaps additional resources needed for a higher trajectory on the revenues I think 10% to 30% is probably a good range in terms of increasing opex for 'twenty 'twenty. One we've worked hard as you know over the last 18 months or so to sort of reduce.
Use the cash burn and start to level set the financial statements and and improve our just our operational efficiency and so we're going to continue to improve on that as we go into 2021 and you know well, we'll see an uptick in.
2021 on the R&D line due to the trial being mostly conducted this year.
You know these are tremendously expensive trials and so.
It won't be it won't be a significant.
Got it and then lastly for US is just walk us through the share count as.
Current inclusive of the on the.
The additional shares from our end of year or beginning of the year.
Yes. So we ended up we ended 2020th 10.3, or we filed the 10-K with 10.3 million common shares outstanding which reflects.
The shares issue common shares issued in the January financing.
Okay got it perfect that goes across thanks for taking the questions great. Thanks, So much for joining Jeff I appreciate it.
And our next question will come from Dan here with E. G P.
Good afternoon, guys. Thanks for taking my questions and congrats on the transformation on the progress over the last day on yourself.
Thanks, So much Ben welcome and thanks for joining.
Yeah no problem.
You said, you're at a you know 20 or so sites a handful more kind of go on through the process.
It sounds like the way you're characterizing the enrollment it's effectively on track with what you.
Expected there.
Is that the right read and then also is there a chance that you ultimately don't get to the 30 sites.
You know maybe some of these price that are more are impacted.
Covid or or other matters.
Ultimately don't get ramped up before you enroll thing.
Yeah, I think it's fair to say you know we're at.
And where we expect it to be it's always a ramp up when you begin and we began we announced our enrolment on January 21st So it's been a little less than two months here.
And then it sort of it it tends to accelerate as.
As you get all the sites up and screening in trading patience and dealing with the flow through of our you know.
The various advertising campaigns that are going on locally around each of our clinic sites and and so you know right now we feel like we're on track to hit our enrollment target of the end of the second quarter or very early in July.
Okay. So by the fourth of July you'll have it all enrolled.
We certainly hope so and where we're certainly on track for that right. Now you know, we obviously always wanted to go quicker. We knew we were going to face certain challenges coming into you know the execution of the trial from an enrollment and follow up perspective in this environment.
But I think we learned a lot in 2020, having run the feasibility study.
And you know tried to incorporate those learnings into this very.
Three important study for us and I think where we're on track and I expect we'll get.
Right up to or at or very near to the 30 sites at the end of the day.
Okay.
Definitely helpful. And then just looking at some of these secondary endpoints on it looks like you've kind of altered on.
Or at least a couple a few of them since the original law Ah trial design came out and you know on beef.
For you you boosted the patient count.
Can you maybe talk about some of the secondary endpoints on you know why you added some or so go.
Oh on their chosen and I mean it.
Seems like there are a few that that maybe could help docs.
Kind of give the patient guidance on when they can expect results.
On.
The consideration you know what went into some of these changes.
Yeah, I think the most important changes really are the addition of the three month time point and that was really done for precisely. The reason you just highlighted which is you know if as as we expect a sort of day to a positive outcome from this trial it will be important from there.
There as we achieve an F D a clearance and begin to be able to finally market on label in the United States and elsewhere for S. U I that physicians have a sense for the onset of improvement in symptoms or leakage.
And by adding the three month end point it really gives a nice time history of improvement because we can look back at at voiding episodes. We can look at mean change from baseline on the pathway test.
In addition to responder rates and really get a sense of the time sequence of outcome and that can be communicated to patients. Once were on label from the physician in terms of setting expectations. Because as you know ours is a tissue mechanism of action debt.
You know based on our history and the many clinical trials, we've run in and they you know sort of vast commercial experience. We have today, we know that it takes 30 to 90 days for the tissues to remodel and for women to start seeing a clinical improvement in their symptoms and so that's.
That's the main change two is is really adding the three month time point.
You know to the the pad weight tests into the voiding diary.
Got it that makes a lot of sense and then.
You know obviously, yes your eyes.
European condition.
You know it makes sense that people are suffering from it are kind of reluctant to discuss and that's why you get the kind of a broad spectrum of estimates in terms of you know what's the.
Number of women in the U S that have it but I did notice it sounds like.
You're looking more at a $25 million to $30 million based upon some of the prepared remarks on where you sit on the press release all whereas.
I recall, you previously talked in morals kind of 11.
$11 million range is that you know, maybe including a little bit more of a mix.
You why or why the the higher figure out yeah. So yeah, that's a great question and and and thanks for asking it because I think it's important to clarify that when we talk about you know 25 to 30 million women in the U S with.
With stress incontinence, it with some form of stress incontinence, and you know as you know, there's you know pure and pure stress incontinence theres pure urge incontinence and then there's this enormous population of patients who have a little bit of both which they referred to as much.
Mixed and so when we talk about 25 to 30 million women in the United States have some form of stress urinary incontinence, including pure S. UI and most of the mixed patients, but as you drill down on that and really what we're focused on you know with stress in particular is making sure we're identifying patients.
Who have predominated S UI and so when we talk about 10, 11 12 million of those patients who would be candidates for of the procedure. We're really honing in on those patients who are predominantly asks you why and there are a variety of clinical mechanisms too.
To differentiate whether a patient has more more stress incontinence or more urge incontinence and so that's the difference in that those two numbers spend.
Okay.
Makes sense.
You know obviously either way, it's a fairly massive market it certainly yet.
Good deal well I think that's all I had for this afternoon, you know good luck with the enrollment in non thanks for taking the questions again.
Really appreciate it thanks, Pat and thanks for joining and I appreciate everybody joining our conference call today. Thanks, so much.
So much.
Yeah.
Yes.
Today's conference call. Thank you for attending today's presentation you may now disconnect.