Q1 2021 Myomo Inc Earnings Call
[music].
Hello, a bulk of the memo Inc. First quarter 2021 earnings conference call all participants will be in listen only mode should you need assistance. Please see the all conference specialist by pressing the star can you followed by zero.
After todays presentation, there will be an opportunity to ask questions. Most of the question. You May Press Star then one on you touched on the phone to sort of your question. Please press Star then two please note today's event is being recorded.
Now I'll turn the call over to Kim go all of that's the goal. That's please go ahead.
Thank you operator, operator, and good afternoon, everyone. This is Kim call. It that's what the L. H a welcome to the Miami of first quarter 2021 financial results conference call.
Earlier, My Elmo issued a news release announcing financial results for the three months ended March 'twenty, 31st two 2021.
If you would like to be added to the company's email distribution list to receive future announcements.
Please register on the company's website at <unk> Dot com or call L. A chain of New York at 2128383777.
Oh my.
[laughter].
To dial back in Hello, Yes, yes, it's part of the share of my name is going to the side of assembly dropped off the line.
Uh huh.
She dropped off the line you can still hear us though right.
You are in the conference so.
I'll, let her dialed back in something happened I guess that her line okay.
Where does she leaves off maybe I can just continue to read so.
I will I'll just I'll, just continue going on from where from where she left off before we begin I'd like to caution listeners that statements made during this conference call by management, although the.
One of the historical facts are forward looking statements. The word anticipate believe estimate expect intend guidance outlook confidence targets projects and other similar expressions are typically used to identify such forward looking statements.
These forward looking statements are not guarantees of future performance and may involve and are subject to certain risks uncertainties and other factors that may affect my almost business financial condition and operating results, including the impact of the ongoing COVID-19 pandemic. These and additional risks uncertainties and other factors are discussed in the.
The risk factors and other qualifications contained in my almost filings with the Securities Exchange Commission, including the form 10-Q for the quarter ended March 31, 2021, which was filed earlier this afternoon.
The outcomes and results may differ materially from what is expressed in or implied by these forward looking statements, except as required by law <unk> undertakes no obligation to revise or update any forward looking statements to reflect.
Vince or circumstances. After the date of this call. It is now my pleasure to turn off the call. The Paul Cardona CEO of myeloma. Paul. Please go ahead.
Thank you, Dave and good afternoon, everyone and thanks for joining us the right. After I provide a business update Dave will review, our first quarter financial results and discuss our financial outlook and following the financial update I'll give some closing remarks, and then we'll take your questions.
With about half of the U S population now having received at least one injection of the COVID-19 vaccine. We're encouraged that our business is well on its way to operating in a more normal pre pandemic environments, while our clinicians continue to take precautions to protect themselves and their patients as.
As Ive discussed on past calls during 2020, we adjusted our operations in particular regarding our use of telehealth and online marketing.
This adoption of digital technologies supported the continued growth of my own all of last year and to date in 2021, we continue to utilize telehealth and online marketing as these modes of reaching patients are not only mainstream now, but there are also cost effective and very efficient.
The last fall, we engaged a new marketing firm with a particular expertise in digital advertising and we've already seen a very positive impact from their work.
I am pleased to report that our revenue growth has been accelerating rising from 50% to 60% just a few years ago to doubling last year and further accelerating to year over year growth of 132% during Q1 of 2021.
Our first quarter revenues were $2 3 million and 65 revenue units, which was up 117% from the year ago revenue yet.
With the strategic shift to our own direct billing channel, while we build patients' insurers directly and provision of the <unk> with our own clinical staff. We continue to report year over year increases in average selling price during the first quarter revenue from the direct billing channel was 73% of revenue compared with 62% a year ago.
Our gross margin has also improved with the emphasis on the direct billing approach compared with other channels as Dave Henry will describe in a moment.
With approximately three quarters of revenue coming from the direct billing channel for the past two quarters.
Appears that the shift is largely complete note also that we establish of reimbursement track record with additional insurers, we expect to be able to recognize revenues faster the shortening the cycle time from lead to revenue.
Our backlog, which is defined as my approach that of an authorized by payors, but are either in the process of being delivered to users or our weighted payment to US was the 118 units at quarter end as we expected. This was down sequentially from 131 units at year end 2020, as authorizations and orders were lower sequentially in.
The first quarter.
We received authorizations in orders from 66 patients to receive of my approach during the first quarter.
However, we expect the number of patients approved for my approach.
Sequentially as we already had 35 authorizations in orders in April the first month of Q2.
We had the strongest growth ever in our patient pipeline in Q1, after adding about 200 candidates per quarter in the last nine months of 2020, we added 386 mentally medically qualified candidates into the pipeline in the first quarter.
This is the result of increased AD spending less competition from political ads on social media platforms. After the November elections, and potentially a positive shift in consumer sentiment as the pandemic abates and people are more confident about their health and financial situation.
As of March 31, 2021, our pipeline was up 22% sequentially and stands at 940 <unk> units in the reimbursement process, we're spending more in advertising in order to reach prospective candidates and to grow our pipeline and part of this increase in advertising spend was directed toward advertising and new meter.
The outlets for example of full page AD for the <unk> appeared in the March issue of AARP magazine, we expect to advertise and other outlets beyond digital media media in the coming quarters the <unk>.
Kris marketing spending is an important part of our growth strategy and its showing clear results.
As a reminder, we will take several months for these candidates the work their way through the insurance process to an authorization that eventual delivery and payments also we expect between 10% to 20% of the pipeline the fallout each quarter due to personal patient issues and are of lack of insurance approval. So we take this into accounts and our planning.
Since we had fixed codes for the Micropro issued in 2019, we've seen an increase in patient access to our devices with more payers covering the myopic low on a case by case basis for the beneficiaries in particular, we experienced strong growth among Medicare advantage plans covering the my approach.
It's important to note that we continue to sell our products on the wholesale basis to own providers for resell to their patients and these owned providers veterans administration hospitals and international sales accounted for the remaining 27% of Q1 revenues.
We're also recently encouraged by president by the speech in which he noted that approximately 800000, new enrollments into insurance under the Affordable Care Act have occurred recently, obviously, the more patients with insurance the more potential users of of myopia device.
Regarding our international business, we expect it to grow at a meaningful pace this year.
During Q1, we announced the additional statutory health insurers of approved reimbursement of the myopic on the case by case basis in Germany, and these insurers now provide the foundation for reimbursement of approximately 40% of the country's population.
And as other markets reopened from COVID-19, we've now got patient screening day scheduled in the UK and Australia, and we're also adding to our head count in Europe. This year and of launched a German <unk> website and begun online advertising there as well to replicate our marketing success and building the patient pipeline in the U S that we've seen.
During the first quarter, we also announced an important joint venture in technology licensing agreement with rise your medical it provider of medical devices and rehab Hospital services in China, We chose riser. After several years of discussions with the number of potential partners for the largest market in terms of population with the upper extremity paralysis.
The form of launch of the joint venture is expected by the end of this year, we first need to secure all of the necessary government approvals from both the U S and China once the JV company to establish and other milestones are completed our Chinese partners will provide the initial capital to the JV company. The fund its operations the locally manufactured distributed.
The <unk> <unk> will receive a 19, 9% equity interest in this venture will also receive an upfront license fee and annual license payments over the next 10 years. After the venture is established.
To reiterate the launch of this joint venture is ongoing will take some time for over the course of this year to materialize.
Now I will turn the call over to our CFO, Dave Henri to review our financial results in more detail then I'll come back and provide some additional updates and comments on our plans for the rest of the year Dave.
Thank you Paul.
Turning to our Q1 financial results revenue for the first quarter of 2021 was $2 3 million, which was up 132% over the prior year first quarter of higher average selling price along with a higher number of myopia of revenue units drove this increase and reflects success with our direct billing channel in our marketing effort.
More.
<unk>, we recognized revenue of 65 mile per units in Q1 of 2021, an increase of 117% compared with the first quarter of 2020.
Our backlog of units consist of insurance authorization of received but not yet converted to revenue in our backlog as of March 31, 2021 was 118 units ending backlog reflects 66 authorizations in orders in the first quarter and 14 patients had exited the backlog without becoming revenue.
Approximately 92% of the backlog is comprised of direct billing candidates.
Gross margin for first quarter was 73% up from 68% in the first quarter of 2020 and flat sequentially. The.
The year over year increase primarily reflects a higher average selling price again, reflecting the shift to our direct billing channel.
There were 50 <unk> delivered to patients in the first quarter from which we recorded cost of goods sold.
The 65 revenue units that means the net 15 revenue units were recorded at 100% margin because cost of goods sold was recorded in the prior period when the units were delivered.
This favorably impacted Q1 gross margin as well.
Operating expenses for the first quarter of 2021 were $4 6 million. This is up 13% compared with the same quarter, a year ago, and primarily reflects higher compensation and advertising costs. The <unk>.
Operating loss for the first quarter of 2021 narrowed to $2 9 million from $3 4 million a year ago the <unk>.
Net loss attributable the common stockholders for the first quarter of 2021 was <unk> 3 million or <unk> 57 per share and this compares of the net loss attributable to common stockholders of $4 5 million or $2 51 per share from the same period of 2020.
Net loss attributable to common stockholders in the first quarter of 2020 includes the deemed dividend on the repricing of warrants of about 700000.
Adjusted EBITDA for the first quarter of 2021 was a negative $2 7 million and this compares with the negative $3 3 million for the first quarter of 2020.
Cash and cash equivalents as of March 31, 2021 were $17 4 million, which includes $7 3 million received from the exercise of approximately 1 million warrants during the quarter roughly.
Roughly $1 7 million warrants remain outstanding.
Cash used by operations was $2 1 million in the first quarter.
And includes the deposit of about 500000, we paid the one of our contract manufacturing partners to enable the procurement of inventory to support projected 2021 demand from IR pro devices.
Our cash utilization is also benefiting from lower rent as we took advantage of the favorable commercial real estate market to relocate our offices from Boston to Boston from Cambridge.
<unk> not only reduces facility rent costs, but will also better accommodate our projected growth.
Turning to our guidance cash used by operations is expected to increase in the second quarter of 2021 compared to the first quarter due to our annual incentive compensation payments.
We believe that our existing cash is sufficient to fund operations well into 2022.
We expect that cash flow throughout 2021 will follow a similar pattern. The 2020 with higher cash used by operations in the first half of the year and lower cash utilization in the second half with the goal to reduce cash used by operations for the full year 2021, compared with 2020.
With lower cash used in operations in the first quarter compared to the prior year. We are on track to reach to achieve this objective.
As Paul mentioned during the fourth quarter of 2020, we engage of new digital digital advertising agency and the record number of pipeline additions in first quarter reflect at the beginning of the the beginning of the positive impact of that change as well as other marketing changes and a more favorable digital advertising environment with the.
Political season behind us.
We expect that these pipeline additions will result in a growing number of insurance authorizations in the second quarter with 35 authorizations in orders during the month of April supporting that expectation.
We also expect the number of pipeline additions during the second quarter of 2021 to be approximately equal to the number of additions during the first quarter.
Year over year revenue growth in the second quarter is expected to be in line with first quarters year over year growth rate.
Lastly, so low.
Long as we continue the gradual reopening that is underway and travel restrictions and public health Lockdowns continue to be in the rearview mirror. We expect we are well positioned for a strong 2021.
With that overview overview I'll turn the call back to Paul.
Thanks, Dave well increase the authorizations by health insurance companies are an important component of our growth strategy, our chief Medical Officer, Dr. Harry Kopelman is very focused on obtaining what we believe are appropriate coverage policies for the <unk>. So that more patients have access to our devices.
Back in January of 2019, the centers for Medicare and Medicaid services CMS established two new billing codes from the <unk>, which resulted in certain Medicare advantage plans paying for the device on the case by case basis.
The results of these new billing codes and Medicare advantage plans are now providing support for much of our current business. We still have work to do to obtain more appropriate and wider reimbursement.
We previously discussed that these Medicare advantage plans cover about 35% of seniors while the larger portion of Medicare beneficiaries are covered under part B, where the <unk> colored as durable medical equipment rental because of the <unk> is custom fabricated for each patients and is designed for long term use we continue to see.
A correction in the benefit category and recently applied for such a change with the submission of the code Amendment for consideration of this year. However, there is no guarantee that CMS will issue of coverage policy or an acceptable payment amounts of the myopia.
Which case will continue to address the large population of paralyzed individuals covered by other payers.
As you May recall early in 2020, we began testing our new myopia device, which is designed for the pediatric market because of the pandemic, we put that work on hold as vaccinations become more widespread and parents are more comfortable with clinicians meeting with their children. We plan to restart the testing final design work on this product later this.
Year.
We have clinical research underway at several medical facilities and are looking forward to the first of these studies to be published later this year and the.
The meantime, we are working with other institutions, who are proposing breakthroughs such as using brain implanted electrodes. The control of <unk>. If the patient has insufficient EMG signal strength and the arms.
Earlier this year of CBS Sunday morning highlighted such of patients at Thomas Jefferson University Hospital in Philadelphia.
We believe that a macro investment thesis is emerging around technologies that facilitate a brain to computer interface with our EMG sensor technology my almost the leader in this space today is well positioned to benefit in the future of new technologies are introduced.
Returning to the presence, we're focusing on increasing our penetration of the large population of those with chronic paralysis offering of the only solution that works for them. After the <unk> tried conventional treatments such as occupational therapy.
As of deep pool of patients that could benefit from a mile from and this addressable market grows each year with 800000 strokes occurring annually just in the United States, leaving several hundred thousand of these individuals with arm and hand paralysis.
Pleased with our efforts to access more of these candidates in the first quarter and we look to continue the success in the coming quarters.
This concludes the formal part of our presentation of operator and were ready to open the call to questions.
Yes. Thank you.
I will begin the question and answer session.
So asking the question you May Press Star then one on your Touchtone phone.
Speakerphone, please pick up your handset before pressing the keys to the try your question. Please press Star then two at.
At this time, we will pause momentarily to assemble the roster.
And before we take the first question I wanted to mention that we are available for virtual investor meetings. During this time of limited travel. So please contact <unk> investor relations to set at the time their contact information is on today's news release will also be participating some upcoming virtual conferences during the second quarter, including the <unk>.
The <unk> Hymer Med Tech tools and diagnostics summit later, this month and Sidoti virtual small cap conference in June.
Alright, operator, we're ready for the first question of if you are supposed to have.
Thank you.
The question comes from Scott Henry with Roth capital.
Thank you and good afternoon.
Just a couple of questions.
First when I'm just looking at the metrics.
You know it looks like authorization.
Dipped in Q1 from from prior rates I know it snapped back again into Q based on April but can you talk about what factored into why it went down in Q1 and is that just kind of of onetime event or how should we think about that.
Well it was equivalent to where we were a year ago Scott.
I'd say part of it is there's a big push of for authorizations in Q4 as you know we had a strong Q3 Q4.
We've always seen seasonality of this business it might be that with the holidays back in December processing. These appeals of authorizations may lag and we don't and sometimes.
Sometimes we don't hear from the insurance companies for 30 to 60 days. After the appeal for example, and Thats why price we see more we had a strong March and another strong April so that may be the reason for that.
Okay, Okay, Great and then I guess similarly that you know the percent of the accumulative pipeline. The kind of just goes away is that that was a little higher in Q1, and then historically just noise there or would you expect the kind of normalized towards that.
<unk> per cent at the mid point of the 10 to 20 per se.
It was probably the historical range of sort of typically 10% to 20% of it might've been the high end of that range I don't think there was anything.
Unusual about the drops from the pipeline that occurred in the first quarter.
Okay Fair.
Fair enough and then I.
On gross margins, obviously, they were helped a little bit in this quarter, but.
Would you view as a sustainable.
Gross margin.
Percentage of I would say on a steady state basis gross margin in the range of 70% to 75%.
Okay.
70, 75%, that's great and then as well, obviously youre, adding.
Patient much better at higher rates than in the past to make sure. We think about that as kind of the new normal now.
300 and call. It 350 to 400 range as that are achievable on a consistent basis.
Well I mean, theres a lot of factors that go into that for.
The things that we can control, which is the advertising money that we spend in the way that we run our operations. We are we are doing what we can too.
The increase the activity levels throughout the organization and it starts with lead generation that we spend advertising money on it and of filters, it's way down so.
If we are to achieve the objectives. We are trying to achieve we need to continue to do the doing it's a good leading indicator.
Indicator because of <unk>.
Future revenues, because those patients will work through their pipeline to revenue over the next six to 12 months.
Okay great.
Well, thank you very much for taking the questions alright. Thanks Scott.
Thank you and the next tranche of comes from Howard <unk> with <unk> Securities.
Hi. Thanks. This is came off that line.
Thanks.
The question I guess first.
The direct selling pipeline continues to build and drive margin.
When you think of like a reasonable goal of kind of interaction.
Outlets beyond the first time of Nebraska.
I don't think it's going to be.
<unk> be 100%, we're always going to have an international business. We will always have hopefully have VA revenues and we want to maintain the <unk> channel as well so I think.
As it gets.
I am hopeful that we that the.
Note that the direct line channel doesn't get above 80% because that means that the other channels are growing which is what we want to see happen.
Right Okay.
And then can you talk about how had accounts over the past 12 months, what's the latest number and then as you think of adding the one point, which is part of the business do you anticipate adding to the mountains.
The overall head count right now is around I would say in the mid 70 75 people I believe and.
Okay.
Most of the head count adds I would say that the head count.
Ads had been we expect them to be stronger than the first half of the year and then taper off in the second half of the year.
As we've.
<unk> been doing a lot of work to put the the.
The capacity, we need to have the in place to service the.
The greater number of leads coming in and the evaluations, we have to conduct in and all the way through our our patient pipeline. So we're setting ourselves up now and I would expect that the adds to the head count to decelerate as we move through the rest of the year, where we've added folks are in the field clinical staff.
Because there are more people almost double the amount of candidates now evaluate coming into through the advertising. So we have field clinical staff that dose of these evaluations and then they will do the ultimate fittings for these patients and the direct billing channel.
We've grown our reimbursement support team under Dr. Coleman.
And then we've also added a few quality inspectors and engineers to support the growing volume because we have to show average devices inspected before it's delivered two of patients.
Great. Thanks, and then last question as far as the average selling price of mine.
Of myopia, how should we model that going from right around 35000.
Yes.
From a modeling standpoint, I would use 35 as a.
As a number of it to model off of.
Great. Thanks for taking the question.
Thank you.
Thank you and the next question comes from Jim Sidoti with Sidoti <unk> Company.
Hello, Hi, good afternoon.
Good afternoon.
Glad to hear you're doing well.
Just following up on average selling price of it looks like it was about $35.
6000 in the quarter based on 65 units shipped.
What was the what was it in the.
And the March 'twenty quarter of year ago.
A little under 34000.
Okay.
Alright.
And.
It seems like.
Receivable.
Dropped substantially in the quarter I know orders were down a little from the last quarter, but.
Does that indicated all of your ability to get paid from the third party payers is that becoming easier now that youre youre direct billing.
Well actually what's direct billing, we don't except for those certain insurers that were taking revenue on delivery.
We actually wait till payment to recognize revenue. So the receivables that we have are from.
The OSP and the VA providers in the international channels, and then that that portion of our direct billing revenue that we're able to take on delivery and the reason we're able to take the the direct billing revenue now on delivery is that we've established a sufficient collection history. So.
I think the gist.
The circling back to the decrease from receivables I think thats just.
A function of the the decrease sequentially in the revenue.
Okay.
The expected by the way just because of our.
The way of the.
Traditionally the business has been operating.
Okay, and then last one from me you raised about $7 million in the quarter from the sale of warrants.
Is that something that you know.
You can.
Going forward or is that going to be more based on the on the share price.
What is the good share counts of 2021.
We didn't.
We didn't sell any warrants just to be clear they were exercised so.
Alright.
So the.
It's hard to say what might what stock price might trigger more exercises. So it's.
It's hard for me the hard for me to speculate on that.
And in terms of our share count our share count of.
Sure.
As of May 1st was five 6 million shares.
We're not anticipating.
Yes.
We say that we have sufficient cash.
Go well into 2022, so we're not expecting.
Any.
Any financing activities that we initiated.
Yeah.
Any increases in shares will primarily come from the third do happen to be additional warrant exercises.
Okay alright, thank you.
Uh huh.
Thank you and the next question comes from sort of a rule with the Sunday capital.
Yes, congratulations on the quarter. My question is you mentioned that it takes about six to 12 months from one of our patient is identified get into the pipeline and eventually recognize as revenue.
Have you seen that speed up at all.
I think.
We're starting I think the see that and I think.
We will see that more as as.
As we continue through.
2021 and as the.
The rate in the.
The numbers of patients certainly cycling through all the way to revenue again to increase I think we'll see that more as we go forward, but until that time I mean, it is dependent on.
The number of authorizations that we get from that of insurance company and that can fluctuate on a on a month to month basis. So it's.
I think the better way to look at it will be probably quarters at a time of nine months of the time.
Great and then.
Do you guys noticed any issues with your supply chain, either significantly higher coarse ore shortages on certain parts coming from Asia.
We are seeing some cost increases like for example.
The laptops and things like that steel bars used in the <unk> yet so.
So we are seeing some cost increases.
But we are working on cost decreases as we do some of our engineering projects.
But from in terms from the from a supply standpoint.
While there are some obviously that we've heard about and been aware of the shortages of certain electronic components, but right now we're able to procure what we need so in terms of straight supply. We are we're doing okay.
Right now.
Great well, thank you and wish you guys. Good luck. Thank you alright. Thank you. Thank you Edward.
Thank you and the next question comes from Paul Nori with no equity.
Could you describe in some detail about.
How much the advertising environment has improved for you guys and if it is.
Mostly from the presidential election, or if there is also.
And effects from people getting out and shopping more in person as opposed to online.
And maybe the cadence of the improvement over the past.
The five months of how prolonged the film.
Well as you may be aware the way these platforms like Facebook work is you are in a constant auction for eyeballs.
In the fall, we were competing with a certain budget that we've set with a lot of other advertise the specific political advertising so that the.
Calmed down after November.
And then we increased our spending.
While we don't break out the advertising dollars in total it's just under $100 of lead.
And if that turns out to be of good payer of medically qualified candidates that could lead to a $35000 sales. So we see a pretty good return on that.
As I mentioned, we did change the agencies to get our specialist and digital online marketing back in the fall as the test set a positive impact as well because.
As you made aware of.
Sophisticated algorithms to target patients cell look alikes compared to people who've already clicked on ads. So I think between the increased spending and also I think the consumer behavior.
Optimistic has.
Change more positively people or more.
The confident about their health situation or about there their job of their spouses job who might have the health insurance to cover the <unk>. So I think maybe that has led to more.
Click throughs on our ads.
The last couple of months.
Okay, and you mentioned that you continue to sell product into a.
How is that.
Part of the business.
You guys.
Well that part of business continues to generate sales force at the smaller percentage just because our direct billing activities driven by our own direct marketing.
Accelerated and taken over three quarters of the revenue stream here, but we still have a number of patients in that pipeline that our own key providers in the United States and then outside the U S. We work exclusively through our <unk>, obviously precise providers, we the whole network of those ODP providers in Germany, some of the UK Australia.
Liam as well so again as Dave mentioned, one P business, both U S internationally, plus the VA, where we sell to directly there is about a quarter of our business.
And are you waiting to see how your experience in Germany goes in terms of how we.
All you can get into that market before you spread into other European markets or are you kind of doing it in tandem.
Well.
We're well positioned in Germany, we're getting more of these statutory health insurance payers to pay for this and again, it's a deep pool of patients in Germany. Its the biggest countries of the EU. It's got the best reimbursement for high Tech devices.
So our goal there we've just hired another person there to help us penetrate that market.
Opening up new countries requires an investment we are talking to all of the providers in a couple of other countries right.
Right now, Germany will be our key markets UK is opening up again, we've got of screening day going on there.
Well.
Okay.
Okay and the previous caller had mentioned.
And of the length of time between the inquiry and when.
When you can actually book of this revenue but.
What's the typical.
Length of time between like between inquiry of when the patient is confident that they can actually get the device is it pretty similar.
So if you look at that.
Six to 12 months cycle time, we quote.
Let's say you contacted us today, our call center in Fort Worth, Texas would be back in touch with you very quickly.
The range for a telehealth initial evaluation, which could be done in a few days.
And then we need you to go to a doctor's office.
Get all your chart notes about your previous treatments such as the occupational therapy, new to prescription of letter of medical necessity that could take a few weeks then we get that submitted to the insurance company for you.
The approval by the insurance company it could happen within 30 to 45 days on the first pass some insurers will kick it out.
Not approved or denied and therefore, we have to craft an appeal that could take 30 days to do that.
May be approved at that point its sides deny the second time, we may have to go through an administrative law judge hearing, which we then prepare the case for that our team will then conduct that appeal. Once we get that approval. Then we have to range to visit with you in person taking a cast of your arm other measurements.
And then we get the device fabricated and we set up of follow up appointment to actually deliver the device.
See you all of the software settings. So again you just look at the time of lapse. There, it's about six to 12 months sometimes longer.
Yes, if you were to split it out the the.
The break the pipeline up between whats the.
One of them when we use treatment authorization to when it becomes revenue.
It's somewhere in the neighborhood of three to four months can be shorter sometimes when it call. It three to four months and then the rest of that six to 12 months is in the.
Apart from the time the lead is generated to the time, we get the authorization.
And do you find the there.
You lose a lot of patients between the inquiry and.
When you get the authorization or not really.
Yes, we find the third and Thats sort of one of the earlier.
Questions dealt with that point, Theres, Nevada, Theres, a general about a fifth of 10% to 20%.
Dropout rate in the pipeline each quarter that comes from people that.
Yes.
I will drop off of various various reasons insurance reasons health reasons can't get a hold of them. What have you that kind of can be all kinds of reasons and we find that that's the rate at which it's been it's been fairly consistent.
At which people will drop out.
Okay and the last question what is the average out of pocket for people.
These are because we're on a case by case basis, we don't have contracts with insurers.
Unless they have reached their out of pocket maximum.
That's the.
That's the sort of the key thing whether they have an out of pocket maximum or non <unk>.
And besides that is probably going to then be 80 20.
But it depends on the state of that patients' out of pocket maximum.
Okay. Thanks, a lot.
Yep.
Thank you and once again. Please press Star then one of you would like to asking the question.
And the next question comes from Orin Hirschman with AIG H investment partners.
Hi, how are you.
Hi.
You alluded to some of that is no futuristic products I mean, besides of the pediatric product.
And any more specifics you can be in terms of what else do you think you could do or what what's in the pipeline.
Et cetera.
Well, we're looking at how do we continue to enhance the existing microprobe device and then.
We're already starting to think about okay. What's the next generation product.
But we're going to focus on the upper extremity because there are lots of different alternatives for the lower extremity from <unk> ankle foot orthosis, the wheelchairs, the canes exoskeletons and so we're looking at what should be that product mix going forward are there other new types of sensing technologies that we.
We ought to incorporate into our devices. So all I can say is.
We have.
The planning sessions on those and the typical development cycle between conception prototyping patient testing validation supply chain. It's typically 18 to 24 months before new product can be introduced into the marketplace per FDA regulations.
In terms of the additional sensing technology.
Has it been pebble volume.
Where is your IP and Bayer or the critical IP really coming from the outside where the.
The the brainwaves of being monitored where does that dovetail with your electrical stimulation of the IP and understanding.
Well, yes, our IP is centered around using the body's electromyograph EMG signals to power an orthotic device.
And the most recent patent the switch go out to 2039.
Cover multiple joints, which we think is important so it's not just a hand component, but you've got to have the <unk>.
Although for us to be able to reach in grass items. So that's that plus our IP around the control algorithms because yes. This is very sophisticated.
Software to be able to decipher filter sample the body's EMG signals to have a true high fidelity motion, which the patient once the half.
And so in terms of the one that's controlled by Brainwaves for example.
Outside.
IP or technology, we can meet in that case.
Proprietary that you don't have today or have you license. It in today, if you don't have of today.
EMEA at one last question.
So there is some of these experimental projects were like at Thomas Jefferson and you've got drill links that you're using a brain implant electrodes well that's going to be there.
The intellectual property, what we have is an API an application program interface, where we can take those signals whether it comes from that type of electrode our own sensory electrodes to power. The device. So we kind of look at it is we've got a platform that in the future multiple sensor technologies could dry.
All of that for the patient.
Okay is there the important so if I can follow up on the point of view the one the other sensor technology of the sensory technology or the.
The critical you are open for that what's the.
The general thoughts from clients.
Well each of those are going to require substantial investments and a long time to commercialize those so our view is we are partnering with these other entities.
To make our of our API open to them. So we can take the signals they generate and drive our device and again focus on our control algorithms don't change, it's just the different inputs mechanism.
Okay got it okay. Thanks, very much of Congratulates alright. Thank you for the question.
Thank you ask the person who asked the question and answer session I would like to return the heart of management for any closing comments.
Great well, thanks, well in closing we are optimistic that the economy here in other countries is going to continue to open up and that the pandemic will abate over the course of the year and assuming that's the case, we can expect continued patient pipeline growth and record strong annual revenue growth for the fifth year in a row.
We're addressing a large unmet need with a life changing solutions, while the continue along the path toward our next milestone of breakeven cash flow from operations. So again, thanks for your time and for your interest in myeloma have a good evening.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
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