Q4 2020 Motus GI Holdings Inc Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the modus GI Holdings incorporated fourth quarter 2020 financial and operational update at this time all participants are in a listen only mode. There will be a presentation by the modus management team followed by question and answer session.
Must advise you all of that the conference is being recorded I would like to turn the call over to Garth Russell of lifestyle Advisors. Please go ahead Sir.
Thank you operator, and thank you everyone for joining us for the most the our fourth quarter 2020 update call today, representing the company are Tim Moran, Chief Executive Officer Edge of Taylor, Chief Financial Officer, and Mark Pomeranz, President and Chief operating officer of modest Gi.
Before I turn the call over to management for the opening remarks, I would like to take a minute to remind you that the conference call and webcast will contain certain forward looking statements about the company the statements are.
They're subject to risks and uncertainties that could cause actual events differ. Please note that these forward looking statements reflect our opinion only as of the date of this call. We will not undertake any obligation to revise or publicly release the result.
Of any revisions to these forward looking statements in light of new information future events.
Factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward looking statements.
Discussed in greater detail.
The recent filings on form 10-K, and other periodic reports on form 10-Q, and 8-K with the SEC I would now like to turn the call over to Tim Moran CEO of modest Gi handing the floor is yours.
Thank you Garth and thank you everyone for joining us today for motives Gi is fourth quarter and full year 'twenty 'twenty earnings call.
I'll start today's call by discussing our performance in the fourth quarter provide.
Provide detail of what we're seeing in the broader U S hospital market as well as discuss for upcoming value creation drivers that we believe have the potential to greatly enhance our business.
And then turn the call over to Andrew who will provide a review of our financial performance.
At the end of our prepared remarks, we will open the call to take your questions.
As a result of COVID-19, 2020 was a tumultuous year for everyone. However, as I reflect on the last 12 months I am pleased to say the despite these challenges our team exhibited impressive resilience, which allowed us to advance our strategy and establish a foundation for pure view.
And the market.
It is important to remind everyone that we are in the early stages of tapping into the opportunity before us.
In terms of market size with more than 50 million procedures per year Colonoscopy is one of the single largest procedures in all of Med Tech.
The unmet need associated with poor bowel prep is universally recognized both from a clinical and economic perspective.
The thesis, which motivated me to join modus as its CEO, two and a half years ago has not changed our peer of your system has clear first mover advantage, meaning we believe we currently have no direct competition.
We continue to protect our core technologies through a growing portfolio of granted patents.
The task at hand is now focused on establishing our entry position in this market and changing the long standing behaviors, both of which are challenging tasks that require focus patience and deliberate execution.
We're asking physicians and their staff to think differently about patient flow with the goal of eliminating archaic and unnecessary delayed hospitalizations due to poor bowel prep.
This shift in mindset requires an enhanced commitment to improving patient care and a focus towards fixing the unprofitable economics for the hospital under the current standard of care.
Moreover, addressing unmet needs in solving these clinical challenges requires physicians nurses and support staff to adopt the new technology and learn to utilize it effectively in cases the encounter on a regular basis.
My experience tells me that changing behaviors doesn't happen overnight. It requires tenacity, telling the story each and every day and being highly targeted in our approach to influencing one physician at the time.
While this process may take longer than we'd like it doesn't change what we're playing for here establishing.
Establishing peer view as a new standard of care in the large global colonoscopy market.
I am confident that our shareholders our customers and their patients will greatly benefit as we execute toward our goal of long term success.
I'd like to highlight the decisive and disciplined approach we have taken in our business since COVID-19 began one year ago.
We acted with urgency in March and April 'twenty, 'twenty cutting our quarterly cash burn by about 50% as the year progressed.
We streamlined our areas of focus and our internal projects continuing only those projects that we believed would enhance our business and help build medium and long term shareholder value.
We strengthened our base of shareholders and our balance sheet in 'twenty 'twenty and early 2021 bringing in more than $20 million of additional equity capital.
And finally, we continued to build strong customer relationships and gained evaluations at more than two dozen targeted hospitals across the U S.
Despite current market related headwinds, which are mainly attributed to COVID-19, we are in the strongest financial position since motives Gi was established and are well situated to come out of the other side of this pandemic.
We believe our sales and marketing teams nimble approach to remain engaged with key physicians has been very effective, particularly when considering the unique environment with lockdowns and social distancing requirements.
In the third quarter, we saw a nice rebound in our business, primarily driven by an uptick in procedure volume and having onsite access to most of our hospitals.
Well that trend continued into early Q for the resurgence of COVID-19 in specific geographies, particularly California, and Texas created a slowdown in our momentum in November and December.
With that said I'm pleased that from a revenue perspective, despite the uptick in COVID-19 related issues in Q4, we sold more disposable sleeves than in Q3 and conducted roughly as many peer view of procedures.
In Q4, we also successfully negotiated two new 12 month committed contracts at prominent medical centers University of Texas, and the NYU, which are both in effect for 2021.
In both instances the customer made a commitment to minimum quarterly purchases of our peer of your sleeves and for doing so we were allowing these early adopters, what we're calling centers of excellence to utilize our capital equipment at no additional cost while these minimums are met or exceeded.
We believe deploying this razor razorblade model works well in instances where capital funding is currently unavailable.
Is it permits the customer to expand use of the pure vu system, while providing us with more predictable sleeves volumes.
Given the current capital environment, we expect the complete additional agreements like these with early adopter of hospitals in the first half of the year.
You May also recall the University of Texas, and then why you are two locations that are implemented a protocol that identifies the clear clinical circumstances, where the pure vu system should be utilized which is also resulting in more consistent usage patterns.
Replicating similar patient identification protocols in additional peer view sites is a key focus for our commercial team.
In the fourth quarter, we also expanded our business by initiating product evaluations at new accounts, most notably the Mayo clinic in Phoenix and mass General Hospital in Boston.
Well, we may not see the current environment begin to normalize the immediately we believe as hospital access returns and Gi procedures rebound to pre pandemic levels. We are poised to drive an acceleration of pure view utilization.
Due to the pandemic, we've yet to benefit from having all of our hospitals fully up and running at any one time over the past year.
As part of our fiscal discipline. We are currently fielding of small customer facing team.
This team is doing a great job driving the results that I summarized and as we see a more favorable environment emerge we will look to thoughtfully invest in expanding our commercial organization with the goal of driving faster utilization and revenue growth.
I want to switch gears to upcoming catalyst for the business. We have identified for value creation drivers that we believe have the potential to meaningfully enhance and accelerate our business in 2021 and beyond.
They are reimbursement.
Product innovation.
Clinical data.
And strategic partnerships.
Let me start with reimbursement.
In the back half of 'twenty 'twenty, we began to develop a comprehensive strategy aimed at positioning peer view for reimbursement coverage in both the inpatient and the outpatient setting well.
While there are many pathways to achieve both public and private coverage. We are initially focused on CMS programs designed to provide payment for new and unique technologies.
In the fourth quarter, we submitted an application to CMS for a new technology add on payment, sometimes referred to as and tap.
This program could provide reimbursement for pure view during inpatient colonoscopy.
As part of the submission we also applied for an ICD 10 code.
As you may have seen in our recent press release on March 9th we participated in CMS is coordination meeting where I am pleased to share that they recommended pure view to be considered for an ICD 10 code.
The M. S is now conducting an open comment period and then the final decision will be made through of subsequent clearing process.
If a code is awarded and subsequently untapped coverage, we believe adoption and utilization of pure view in the inpatient market can be accelerated.
We also submitted an application for Cms's transitional pass through payment.
Of this program could provide reimbursement for traditional outpatient procedures.
We believe high medical need patients that can't successfully complete their pre procedural bowel prep would benefit greatly from pure view.
Securing pass through coverage for our system could be of significant catalyst for our business as it would provide economic incentives for physicians to use peer view on the roughly 5 million high medical need procedures each year in the U S. It would also mark our first entry into the large outpatient market.
Next I'd like to discuss new product innovation.
I am pleased to report that our product development effort to launch our first pure vu system for use in upper Gi Endoscopies is on track and we expect to submit of five 10-K application to the FDA by early Q3.
This would potentially position us with an approved and available product on the market by early Q4.
We view this as a significant opportunity and believe our technology can potentially address a serious unmet need in the market as it relates the visualization and the treatment of upper Gi bleeding, which hasn't estimated mortality rate of approximately 10%.
There are roughly 400000 upper Gi procedures in the U S annually and we continue to receive significant inbound interest from GI physicians, who are eager for a solution that allows them to clear adherent blood and clots from their field of view during this critical procedure.
Next let's discuss clinical data generation I'm excited to announce today that we recently began enrollment in the study with the Cleveland clinic, which will evaluate the clinical and economic benefits of using the peer of your system in patients with emergent lower Gi bleeding that are treated in the ICU.
Or the rapid inpatient endoscopy suite.
This study is designed to enroll at least 20 patients to undergo minimal bowel prep in order to provide patients are much faster diagnosis as compared to the current period of 24 to 36 hours or more typically required to complete a full bowel prep.
The outcome, we receive from the study could begin to challenge the current standard of care for emerge at lower Gi bleed patients who are facing urgent need for diagnosis and treatment, but are currently delayed.
We expect to have this study fully enrolled before the end of 2021.
And lastly, I want to talk about strategic partnerships.
As it relates to our strategic options. We've spent time evaluating a number of potential pathways during the back half of 'twenty 'twenty and into 2021 or.
Our objectives in considering any potential partnership would be aimed at opportunities that could accelerate our commercial efforts and enhance our technology development.
Any partnership would also need to unlock clear shareholder value as we continue to grow awareness and uptake of the peer of your system, we will consider which options best fit our criteria and are actionable.
I will now ask Andrew to review, our financial results for the fourth quarter and the full year.
Andrew.
Thank you Tim and thank you everyone for joining us today.
The reported revenue for the fourth quarter 2020 of approximately $36000 primarily from the sales of pure Vu single use sleep.
As Tim discussed our small commercial organization has been focused on single use sleeves cells with early adopter of hospitals that are starting to implement your view of patient protocol.
Growth in the fourth quarter was impacted by the surge in COVID-19 cases and the.
The fact on new technology utilization when the inpatient environment.
Over the course of 2021 we expect to grow our number of new system placements and work with hospital value analysis Committee.
Finalized commercial contract out of active sites.
We anticipate new and Reorders of furiously the increase during 2021 and to pursue capital equipment purchases leases or rentals with targeted accounts.
For the three months ended December 31, 2020, we reported a net loss of approximately four point for a million dollars or a net loss per diluted share of <unk> 12 cents.
Compared to $5 $9 million or a net loss per diluted share of 21 cents for the same period last year.
During the fourth quarter net cash used in operating activities and for the purchase of fixed assets was $2.8 million that's true.
To $5 $6 million for the same period of 2019.
The reduction of 50 per cent year over year.
For the year ended December 31 2020.
We reported the net loss of approximately $19 $3 million for a net loss per diluted share of 6%.
Compared to $23 $1 million or a net loss per diluted share of 92 cents for the same period last year.
Net cash used in operating activities for the purchase of fixed assets. During the year ended December 31 2020.
Totaled $17 $1 million as compared to $24 million for the same period of 2019.
As reflected in these comparisons of net loss and cash spent activity for 2020 as compared to 2019 the results of our cost cutting measures, which we initially put in place at the end of the first quarter of Kantar.
Tribute of towards significantly extended cash runway.
At December 31st 2020, we reported $28 million in cash and cash equivalents.
This included the $8 million from our 2019 term loan with Silicon Valley Bank.
In January of 2021 we further strengthened our cash position through the execution of a warrant exchange agreement with an existing institutional investor, which raised net proceeds of approximately $11 million.
We believe that with this bolstered balance sheet, we are poised to execute on our upcoming value creation drivers laid out for 2021.
Sure compliance with our Silicon Valley Bank liquidity Covenant for the first quarter of next year and meet our overall anticipated cash needs further into 2022.
And with that I'll now turn the call back over to Tim.
Hey, Thank you Andrew and let me summarize the key takeaways from today's call.
We are pursuing of global market opportunity for a pure Vu technology and believe we currently have no direct competition. While this leaves us with the challenges of being a first mover and changing physician behavior, we continue to make steady progress in creating market awareness and adding new hospitals and physicians.
As COVID-19, hospitalizations decline, we believe we'll be operating in a more normalized environment, which will improve procedure access for our sales team and enable more opportunities to drive utilization, which will lead to increased demand for the peer of yours system for.
Finally, we are excited about the for value creation drivers I discussed in my earlier remarks, including reimbursement product innovation clinical data and strategic partnerships.
Each of these catalyst offer important opportunities for us to enhance our portfolio broadens, our addressable market and unlock value for our customers their patients and our shareholders.
I'll now ask the operator to open the call for your questions.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad. The confirmation tone will indicate that your line is in the question queue you May press the.
The press Star two if you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up of your handset before pressing the star keys, one moment. Please while we poll for questions.
Thank you. Our first question comes from Matt O'brien with Piper Sandler. Please proceed with your question.
Oh, Hi, guys. This is drew on for Matt. Thank you for taking the questions.
I just wanted to start on the the sleeve minimum of agreement.
Maybe you could share a little bit more detail on how those are structured.
You know how many do you expect the two centers to order in or I guess, how many do they have the order through each of those requirements.
And then you know how should we be thinking about that from the you know maybe of revenue or a quarterly cadence perspective.
Yes drew thanks for your question and thanks for joining today so.
The first of all we're really excited to be able to inc. These are these first initial.
The committed agreements and as I mentioned.
In my prepared remarks, the capital environment is very difficult right and at the end of the day you know our our conviction is all around driving this procedure getting physicians trained and getting them comfortable using the device in and and you know really improving patient care. So this is a way to get the product in when they don't have a capital budget, but also gives us the commitment back.
<unk> pretty much more predictable.
Volumes at least initially.
Well, we're not going to give out specific contractual details that we have with these customers what I can tell you generally.
As we've talked before about you know first year utilization, we feel is typically going to be in the seven.
Seven to 10 procedures a month.
And these agreements are written to fully cover that.
And we expect them actually to grow much larger than that because in most of these situations. We have just a small number of the physicians who are actually doing the procedure. So hopefully that gives you a little bit of feel you can kind of model that out.
Out, but the but that's the way they're structured today and you know what we what we'd likely expect over time as their capital budgets free up I would I would think that most of these customers would end up then you know moving to either an outright purchase of the capital or.
You know of lease agreement, but right now this is a great way to get them up and running with the product.
Okay, that's super helpful and congrats on a couple of new.
The valuations can you just remind us.
Of all of you know some of those processes are structured I guess, especially during the COVID-19.
Covid here I mean, whats the requirement from training, what's the requirement for them you know as far as having a salesperson on the ground or anything like that and then how long does it typically take some of those accounts I mean, obviously, you've talked about and why are you in the past.
Right for you start you mean for utilization of your view.
Yeah, you know, it's it's it's been an interesting year right. That's an understatement. So there there's probably not a one size fits all answer is in terms of the approach that each of these sites have.
Have they asked us the kind of work with them as it relates to the impact of Covid on their staff and protocols and things like that but typically you know the structure that we we believe optimizes our successes.
We can be there on site and do initial training for the entire staff that will be associated with the product as well as of course. The physicians you don't have a kind of a kickoff meeting if you will and then everyone's on the same page as it relates to what the technology does what the benefit is we make sure that we coordinate with the nursing.
Florida right. So if you got these patients that are up on the floor waiting there of a colonoscopy done they fully understand or educated that now there's a a solution down in Gi that allows them to do the procedure, despite the patient being ready.
So there's a lot of coordination that needs to be done so in an ideal situation where their onsite initially doing all of that organizational work. If you will and that has continued and in several sites as a matter of fact of our evaluation in Boston that we just did here at the end of the year and into the first quarter, we were able to be onsite. Despite.
What was happening of Covid their protocols allowed for that so we followed that very approach and we had of rap in clinical training folks on site, but in some of the other accounts in and it's been a little bit of a elongated process throughout this year, we've not been able to be there. So we've had to use remote tools and and we've talked about this before in the past of we we.
Digitized all of our materials. So now we're able to do things very effectively over the phone via zoom.
This chapter narrated video that the staff has in front of them. So they can see exactly how the system sets up and you know its work it's worked well it just takes a little bit longer to try to manage it that way.
For the sales process, you know I would say has been taking probably upwards of six months plus given some of those hurdles you know and then the backend the value analysis committees have been you know on and off meeting its been kind of stop and go. So I would say this is a very unusual last 12 months as it relates to the tip.
The timing that it would take to get these deals done.
Yeah that makes perfect sense just.
Just last one for me are the upper Gi indication.
Maybe you could just lay out the the value prop there how similar or different is that to your current partly prep market and then.
How should we think about that indication as far as impact your business and maybe 'twenty 'twenty two maybe thank you yeah. Yeah. We're really excited about this and as I mentioned earlier the team our internal team has done a terrific job from an R&D and engineering perspective to continue to hit all of our milestones on the project.
So we're on track with getting ready for submission to the FDA will have a product on the market this year.
The way, we're the way we're positioning this not dissimilar to the lower Gi, but obviously this is utilized for.
The bleeding typically for bleeding in the in the upper Gi tract.
And what we've heard of really time and time again from our customers very important influential customers that are doing these types of procedures on a daily basis is that they struggle with blood and adherent blood clots that conform in the stomach and the duodenum.
And the visualization becomes a problem. So it's it's the parallels the lower Gi AR at the end of the day. It's all about visualization. So you can see what you need to then treat so we will have the product on the market. Our initial plan is to do of very targeted a I would call. It a kind of a soft launch as soon as we get it.
Out there we will have those accounts of lined up we'll have the physicians lined up and we'll get feedback from the market. Initially and then we would move into you know of broader launched.
But we're very excited about that we were not going to comment on.
<unk> revenue projections at this point, but what I will say is there there are approximately 400000 of these procedures a year are done in the U S.
Primarily all in hospitals. So it adds the you know call. It a roughly another 25 per cent to our kind of total addressable opportunity that we're focused on today in the hospital environment and their synergy because you were talking about the same hospitals same positions and we think the this is gonna be you know a really nice add on to the portfolio.
Thank you.
Yeah.
Thanks drew.
Thank you. Our next question comes from Kyle Boser with Colyer Securities. Please proceed with your question.
Great. Thanks, good afternoon, and thanks for all of the updates today.
Sorry, if I missed this but can we walk through the kind of upcoming clinical trial cadence and data readout timing I know you just started the pilot study of the Cleveland clinic, which is great.
I want to make sure I understand how things will shake out this year from a catalyst perspective.
Yes sure Kyle.
And thanks for joining yeah, we're really excited about this this new this new trial that we just enrolled the first patient I'm going to I'm going to pass it over to Mark and have him outline kind of the overall clinical view, if you will mark great. Okay.
Thanks, Tim Hey, Kyle.
Hey, Mark of yes, as Tim mentioned, we're a we're really excited about the study in the Cleveland clinic, and it's really doing something that's.
Fairly unheard of with doing colonoscopy with basically no targeted base. The prep. So these are significant leaders at the time is of the essence to get in there too.
The source of that lead and that create hemostasis.
Possible you know, we're looking at getting in the page.
Patients with a with no standard target of just a couple of the tap water antibodies and then going in with peer viewed of the claims the colon to find the source of the bleed.
We anticipate being able to enroll the study.
The complete enrollment later this year and the reality is probably the actual read out of the data.
The in early 'twenty, two as far as any of any publications et cetera happening from it but again it really unique trial of the going forward in these critical patients with well with no crafting getting being able to get in there quickly, especially of these folks that are in the ICU, but you can you know not only do we get them out of the hospital quicker for certain just downward.
The them into a regular award can be incredibly significant for the treatment of patients in the cost of the hospital.
Okay got it and and.
Hmm.
Might we see any other kind of cuts at the previous day that that's already been collected from either reduce or expedite.
Maybe they'll be some data read out to the W. Anything else out there we should keep an eye on.
Yeah, So we do anticipate and the in the coming months of some additional data of.
Read out from the.
Some of our prior trials.
We're always looking to at the continuing to push and the and publish our interest and case studies that we're seeing as well that the sort of health as Tim was talking about adding fuel to the fire for the protocol adoptions for folks as they look at the various patient population. So we can also augment our data with the some of the interesting case studies that are happening as well.
Sure Okay.
Got it and then and lastly, if I may.
Can you talk a little bit about the the recent updates for the Gen. Two system. So I know that there are the.
<unk> enhancements are not cleared in Europe, and the U S and I think has to do with the ergonomics and software, but I guess just any other color there would be appreciated.
Yeah.
Oh, yeah, great Mark I can take that as well please.
Sure. So yeah. So great question Kyle So we're actually excited a lot of these things just rolled out a.
Towards the end of last year with some of the the upgrades.
Probably the most impactful one was even though of Gen. Two already significantly streamline the loading.
We made some enhancements that made that even quicker and easier.
For the text to do so continuing to work to drive that also helping with the removal of the scope post procedure of some of that.
So just to make that a simpler as well.
And then added some things to that streamline the the software and gave the yeah. The physician some more flexibility as they're looking at.
Using different modes in the system and how to work through that in a little bit easier more streamlined fashion just to accelerate the Christmas of your time as well.
Great that's helpful and thanks for all of the update that for me.
Hey, Thanks Kyle.
Thank you. Our next question comes from Steven Lichtman with Oppenheimer. Please proceed with your question.
Hey, guys. Thanks for taking the question business the David on for Steve just going back to the the Covid dynamics in the quarter and early on here again, all heading towards the end of the one the first quarter of.
Any additional color you could talk about in terms of impact on utilization in the near your sales reps the ability.
To get access to physicians and or are you able to talk about anything on how is the inpatient colonoscopy volumes have trended relative to pre COVID-19 levels.
Sure.
Yeah sure David Thanks, and thanks for joining.
So it's been interesting you know Q3 was definitely a marked the point, where we saw a procedure volume come back.
The two I think of in Q3, I talked about you know call it 80% to 85% of pre pandemic levels kind of has the feel we had from speaking to our customers and you know that really for the most part continued.
Into into Q4.
And you know I think it I think that's what the you know if we look at Q1. It feels about the same so I don't I wouldn't say that we've seen a significant improvement, but there hasn't been a.
Terrible decline either I think the the back half of Q4 in November and December when we talked earlier about things flattened out a little bit. It was it was very specific to geographies.
California, where we have several installations, Texas, where we have several installations that were just getting hit hard.
The procedure volumes.
Thank you know Q1 is it's probably I'm looking.
Similar to what we saw in Q3 and Q4, but we are optimistic now as I think everyone is you know what the the rollout and really an acceleration of the rollout of the vaccinations that you know we were expecting to see improvement in in Q2, and you know in talking to physicians in our key hospitals they've.
They've kind of echoed that so you know we're bullish on what we would expect to see procedurally in Q2, plus with the access rate because right now we probably have access to you know about the real access to about 40 to 50 per cent of our accounts what I mean by that is we can go in.
Without a lot of trouble and be there in being procedures, but the others have a lot of protocols in place that make it very very difficult to be there and to get into different units and we still have certain sites that we can't get it at all so again, where we're hopeful that as we get into Q2 that will start to improve.
Okay, Great. That's really helpful. And then I was wondering if you could talk about some of the recent progress with the our our collaboration with the and why you're going and going and how's that been going and have you seen that trend over time towards the 50% of the okay.
And patient and clock colonoscopy patients better pori prep as the turning towards that direction.
Yeah. So we're we're very pleased with that relationship you know obviously, we had another update today that they're now also you know signed two of committed volume agreement.
The the physicians that we work with there are terrific and have really embraced peer of yours. So I would say generally speaking, it's a it's going very well.
And yes, it's going to take time to get to the to the to get to that full penetration point, but I think we're seeing even if you look in this past quarter, we're seeing consistent reordering, we're seeing them gain a significant degree of independence. So what I mean by that is they're doing procedures. When we're not there which is the goal.
And they're getting the you know that just shows the comfort level that they have.
And you know we're talking to them about some other ways to collaborate overtime here. So I think we will see them as a very important customer for us moving forward. The other thing. That's that's unique if you will about and why you and I think we've talked about this a little bit is the way they're structured from a physician perspective is.
They have a of director of inpatient services are Gi hospitalist, if you will that is on site.
On a consistent basis right. So other facilities will have physicians that are on rotation and if its a large Gi group. They might have you know of physicians that you know are they are doing in patient rotation once a month or even a longer space between whereas at NYU. You have key positions that are there each week in there. They are full of objective is to work.
On these inpatient so obviously, that's a captive audience for us and it's a learning that we took over the course of last year that as we expand our targets focusing on some of these accounts that are structured that way.
Can really optimize success and really accelerate success, because youre talking about you know a lot fewer physicians that you need to get up and running to try to get to that.
Standard of care level of if you will so that's been something that.
We've learned from and why you when we're now replicating in other places and then why you've been helpful. In terms of getting us network the cause.
Leagues and other sites across the country that are structured similarly.
Okay, Great and then just lastly for me any ideas on tightening for the publication for the expedite trial.
Yeah.
I love the olive Mark answer that I think just generally speaking, though that we're expecting something here you know call. It in the next two to three months, but Mark if you can just confirm.
Yeah, so that the.
That's correct, Yeah, we're expecting something in the in the next few months on the expedite study again that wasn't the investigator initiated study by the Doctor Jacobson, who actually are.
In the middle of last year from all of the Boston Medical Center of MGH. So that's kind of slowed down some of the progress on that of moving that forward. So lots of he's driving that.
That data in the publication, but we're hopeful that that will.
Happen in the next few months as well.
Okay, great. Thank you.
Thank you.
Thank you. Our next question comes from Ben Hayner with Global Alliance Our Alliance Global. Please proceed with your question.
Good afternoon, gentlemen, thanks for taking the questions can you hear me okay.
Yes, we can been loud and clear.
Excellent. So just curious on any more color you can provide on the the ICD 10 code presentation. You know do you have any sense of how that went.
You know just kind of looking at the the options that are available to our to the agency it looks like although the than the one that's you know kind of the untapped supportive one it almost seems like of decoy option in that it only adds the intra procedure to the existing coding I mean, what what are kind of the thoughts around that.
Yeah. So why don't why don't I start and and if we want to get into more granular detail than I can I can pass it to mark but so we we did participate in in that meeting and I think we did a nice job and represented the you know what.
What we're looking to try to do with peer view, we did get the recommendation from CMS.
So they put forth.
There's various options that they can choose from they put forth the recommendation before it goes out and they are suggesting and recommending that pure vu receive an ICD 10 code.
So that's positive right and and now whats happening is as we mentioned it'll it'll go to an open comment period. The folks can weigh in on any feedback they have on that and then we'll come back in house and they will ultimately make the final decision later this year.
But you know that's an important part of of the process. If you will as we as we move towards the untapped right, which would actually provide the coverage. So the the ICD 10 as you know it is the way to attract the procedure. So it's important that you kind of get through that initial hurdle and I think we feel like we represent of ourselves well in that process does that do.
Of that answer your question Ben.
Yeah, I mean, the that's that's what I was looking for and then you know it kind of on the open comment period. I mean, you wouldn't seem to I mean, you Wouldnt expect of the you know what anyone would be highly motivated to come out against you guys given the there's no competition.
Yeah, we we would we would not expect that but obviously they do have to go through their process right and.
We'll see where that ends up but no we wouldn't expect that.
Okay.
That's helpful.
Did you did you have anything to add.
No I think I think steal your thunder or anything.
Tim covered it well and you know where.
We're optimistic about that getting the code but.
The see how things are moving along but the net.
10 point, the likelihood of that somebody would come along and.
The make any comments to the negative.
Pretty small.
Sure makes sense.
And then on the young and go ahead sorry.
No you know the way we're looking at this.
From a reimbursement perspective.
I'm pleased with the progress that we're making of the team's making the untapped. The submission is one of the the various programs to obtain reimbursement. This this being for new technology and you know for that one being specific the inpatient and we view that if we don't have currently headwinds for for for inpatient from a reimbursement per.
Specter of however, we do see that as an accelerator of potential accelerator you know if we were to be awarded that additional coverage.
That could help particularly with the value analysis committee of the.
The that the financial end of that process.
It comes a lot easier yeah, Yeah got it got it and then on the Cleveland Clinic study with the you know the double animal protocol.
The 20 patient so I mean, that's sort.
The kind of a pilot study.
How come you think it'll take so.
So long to enroll.
Yeah.
So Ben what I'll say is we're just not going to put a hard date on it only because it's an investigator initiated study. So we don't fully control that but you.
You know I think you know given the size of the institution and the number of patients that we outlined here.
Certainly has the potential to move relatively quickly but at this point until we have better line of sight, you know, which I think we will you know by next quarter, we'll know how many of that you know we've done and what the pace looks like we can provide a probably a more specific targeted date, but for now we wanted to keep the general.
Okay, that's fair and the and then finally on the minimum sleeve purchase commitments of.
You know I know of some of these are obviously larger institutions with whom you know more than one location. You know as you start out you have the kind of seven of 10 procedures a month of the Youre doing that you know maybe the main location what happens when are you know they say this is great let's expand these protocol.
Also the system why we want more of the is how do you handle that I mean as of kind of that 7% to 10 procedures per hospital or you do it on a bigger basis or how would you think about structuring that you know down the road should things go well yeah. Yeah. So it's a great question. So one that was you know one.
Of the reasons why we've decided to make these 12 month agreements right. So they're not.
Three years or something because it's the things will change.
As of new technology in the market as we're out there you know as I said earlier really are our biggest objective right and challenge is changing behavior right. So we're asking physicians and staff to do something differently than they've done in the past right any type of new technology, so getting the product in the door.
And having them have access to it you know we're comfortable with the minimums that we put in for this first 12 months based on as I said of smaller number of physicians utilizing it because we believe that as you have it on site you know, it's our job to be onsite training additional physicians and they will immediately as they start to do cases.
As for the first time.
They'll see the value right. So I think the the the minimums that are put into these agreements from our perspective.
We'll get outdated pretty quickly.
You know if we can get this in the hands of additional positions and then at the end of the 12 month period. You know, we'll look at what that next agreement might look like I could see in the future potentially you know I'm, the having options, where it's you know, it's either just an outright purchase or lease or or.
The rental or we might have different minimum requirements 12 months from now, but we wrote them as 12 months of agreements. So we have flexibility.
Okay that makes a lot of sense, but that's all ahead of gentlemen, thanks for taking the questions.
Thank you Ben.
Thank you. Our next question comes from Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your question.
Hi, This is destiny on for Jeff. Thank you for taking my questions I Hope you all are well.
I guess I'd like to start with revenue I saw in some of your commentary that you mentioned a portion was from new accounts and a portion of its from existing accounts, but I'm wondering if you could help us understand.
What those proportions looked like even just out of a high level of doesn't have to be super specific the perhaps a range.
Yeah sure of Destiny. Thanks for joining yeah. So so we definitely don't don't want to you know start to break it out to that level of detail, but I would say that a large portion of the you know the the early revenues that we're seeing here are coming from existing repeat orders so well so how.
What that would look like as in any given quarter.
The majority of the revenue is coming from repeat orders and then youre going to potentially get a couple of initial orders to.
To get to get going and I think that happened here in the last quarter. So we had an account that you know switched and got the approval of right at the end of the quarter and placed their first paid purchase.
But that's obviously a small small majority of the of the revenue that we're seeing right now.
Right and with some of these all of these two contracts that could change maybe just slightly but nothing it'll still look pretty similar to how it's been for the last two three quarters you'd say.
In terms of the the amount or the the breakout between new and existing the breakout yeah. The breakout.
Well I you know I do think that that will start to pick up because we have several of our of these types of agreements that are pending you know that we've been actively actively working you know really until the end of Q4 and it got delayed with some of the COVID-19 issues in here in Q1. So you know just depending on when they when they make the commitment and placed their first order of that that.
It could.
Could certainly change and you know I think as procedure volume comes back just kind of going back to what I was saying earlier.
We expect many of these existing sites that had been evaluating and have had elongated the valuations to get fully converted and start purchasing so yeah. I think that that certainly will start to ramp up in terms of new purchases coming in as opposed to the repeat orders that we're getting from our earliest sites right now.
Okay got it and then could you just remind us of your efforts O U S is there anything going on even the <unk>.
You know R&D that we should be aware of.
So yeah. So.
If if we think about O U S.
We have had several activities we talked about some of the regulatory the updated CE, Mark which is obviously important we have done.
I would say a high level of exploration and in diligence into.
Into Europe and into Asia as it relates to the opportunity for peer review and we've had.
Inbound request from several different.
Entities I'm interested in.
They're selling or having access to peer view in their market.
We're evaluating those I think right now our focus is very much as you know on the U S.
So to access Europe or to access China or Japan.
Obviously, we would be most interested in doing that with the partner and as I said earlier, you know we've had significant dialogue with a variety of different entity as both a large kind of manufacturers medical device companies as well as key distributors and in certain regions around the world. So we continue to evaluate have discussions kind of do.
Our diligence so we're laying the foundation for an eventual of entrants into those markets, but right now given COVID-19 and and you know of balancing our cash burn the focus is obviously heavily on the U S.
Okay got it. Thank you I'll take the rest of my questions offline.
Thanks, Stephanie.
Yeah.
Thank you. Our next question comes from you Chen with H C. Wainwright. Please proceed with your question.
Hi, This is Bob Allen dialing in for H, and just a follow up on ICD 10 reimbursement, Florida. How do you think the code upon approval will affect your company's top and bottom line can you quantify it or if it can be quantified now when would that be possible.
Thanks, Google on for joining in and Thanks for your question. So I would just say generally you know the way right now you know we don't have.
You know of line of sight into into what the potential reimbursement amount may be right. So we can't comment on that but I think generally what we're seeing it is strategically if you think about the untapped.
It would be an accelerator right to adoption because if you had some additional reimbursement.
On the peer of your sleeve in the hospital environment I think it would allow us to work through the value analysis Committee financial analysis, much easier because it's reducing obviously the overall cost burden, but keep in mind that today on an individual patient basis individual procedure, we're showing a return on.
The investment you know with one sleeve. So this would just you know as I said the serve as more of an accelerator. If you if you will.
So I don't I don't see it having any anything but positive upside to revenue uptake and and and it obviously wouldn't we wouldn't change our all of our pricing based on that either.
That's helpful and bedroom stand on the rescue study do you plan to initiate any new clinical studies for this.
Here.
Yeah.
So I can have Mark talk about you know we actually do you have of another study that we're going to initiate in Europe. So Mark do you want to just provide just a quick overview there.
Sure.
Actually just the comment that I've mentioned, the rescue study, which is going to be an open label registry, which we did.
Back when we did our cost cutting last year, we did put that study in the backburner and so right now we're focused on the Cleveland Clinic study.
That we talked about earlier in the.
Hmm.
Patients in the ICU and then we are initiating a <unk>.
Small study also in the in.
In Europe more of a seed some of the the key thought leaders there.
And that study is really focused on pace.
Patients that have the right.
Let's call day of difficulty in prepping in the outpatient scenario and are typically coming back almost on a yearly basis because they never got a good example of physicians are examining them constantly just to make sure that whatever pops. They missed on the prior procedure of hopefully as they get larger they will catch them before they become cash.
The risk problems. So we will be of initiating that study.
Coming off of the next quarter or so.
As well so again that'll be an interesting population because of you know that will also feed into some of the issues in the outpatient and the U S. For these are these patients better out of what's called the reduced surveillance interval because they don't get a good preparation and theres concern of an agricole cancer.
The nice way for us to get some early data on that well see some of the the key thought leaders in Europe as well.
Yeah.
Great One final for me so how many hospital evaluations of currently underway.
Many of you when do you anticipate the start with the 'twenty to 'twenty one thank you.
Yes sure.
Listen we we we've we have the site the system placed in in more than 20 sites I would say Google on right now if if we kind of think about COVID-19 and access Theres about Oh of course about two thirds of those that are that are active we expect the others to kind of the pick back up.
We are working with as I said earlier, a very lean commercial team.
So we're remaining very focused on targets that have.
The the highest potential to close the most quickly and also kind of play of strategic role and in the overall foundation setting that we're doing in and I would say that that's the mode that we're in here as you know and I think had we not lost a handful of quarters with Covid.
We would have probably been through that and further along but.
We will continue to strategically add new sites I would say each and every quarter as we just did as we reported in Q4 and we're continuing here in Q1, but we're going to do it smart you know and as we as we look at 'twenty 'twenty. One we will also think about where we'll expand the commercial organization and <unk>.
The geographies that we believe the ROI will be there and that will allow us to accelerate you know, bringing on additional sites as well. So that's the just the way we're thinking about it right now.
Alright, that's it from me Thanks for your time and congrats on your progress.
Thank you very much.
Thank you there are no further questions at this time I would like to turn the floor back over to management for any closing comments.
Great. Thanks, operator, and I just want to thank everyone for joining us today. We appreciate everybody's interest in <unk> Gi as you can hear you now we are despite the challenging year that we've just encountered you know we are very excited about the progress that we're making commercially really building out the foundation for R. R.
Our pure Vu technology in the market, we're changing behaviors for bringing on more physicians and as you look out across 21, but we're very excited about the the upcoming catalyst with reimbursement with product innovation and the new clinical data that we have a lot of things that we believe can truly accelerate and enhance the trajectory of the business.
In the upcoming quarter. So thank you again for joining and hopefully everybody stays safe.
Yeah.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.
Okay.