Q1 2021 Viveve Medical Inc Earnings Call

Good afternoon, and welcome to <unk> first quarter 2021 financial results and corporate update conference call.

All participants will be on listen only mode.

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After today's prepared remarks, there'll be a brief question and answer session. Please note. This event is being recorded.

I will now turn the call over to Jeannie Swindle Senior director of corporate Communications. Please go ahead.

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 of the date of this conference call and are subject to numerous important risks and uncertainties 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 company's annual report on form 10-K, and other filings made with the SEC, 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.

Speaking on today's call will be Scott Durbin levies, Chief Executive Officer, and Jim Robyn Senior Vice President of Finance and administration.

I will now turn the call over to Jim.

Thank you Jeanie good afternoon, everyone and thank you for joining the call today I will begin today's call with a brief review up on the first quarter of 2021 financial results.

I'll, then turn the call over to Bob who will provide a corporate update and afterwards, we will open the call to questions.

Today, we reported total revenue for the first quarter of $1 $5 million from the global sale of eight from these systems and approximately 2450 consumable treatment tips as of day ended the first quarter 2021. The company had an installed base of 860 from these systems worldwide.

Operating expenses for the first quarter decreased to $5 $5 million a reduction from $6 million from the same period last year.

The decrease was a result of the company's organizational realignment to focus on our current <unk> clinical development program.

We ended the quarter on a strong cash position due to the success of our public offering in January on our lowered operating cash flow and a $3.3 million from Q1.

Cash and cash equivalents as of March 31 were $28 $4 million before handing the call to Scott our minds on the shareholders on our call. This afternoon. These recent 2021 annual stockholders' meeting was adjourned James sub debt due to a lack of quorum, we would like to encourage all shareholders are welcome to please vote. Thanks.

I'll now turn the conference call over to Tom.

Thanks, Jim Good afternoon, everyone and again, thank you for listening to today's call.

I will begin my remarks today to give perspective on the positive financial results and capital position of the company that Jim just reported today, we are in a strong financial position as a result of the dedicated efforts of the entire but the organization is.

Cheesman of critical milestones in our stress urinary incontinence or S U Y clinical development program.

And confidence in our ability to execute our S. U is strategy to achieve a potential new indication in the United States.

With the capital resources to support operations through the end of 'twenty 'twenty two we plan to continue our strategic focus and the following core areas.

Number one advancing our currently underway pursuit trial and achieving a positive data readout in the middle of next year.

Thereafter, if positive commercially launching the first F. D. A approved patent protected Endovascular office based treatment for urethral hypermobility to improve S. UI in women.

Secondly, focusing on our commercial and market development efforts in the United States and Asia Pacific regions through the expansion of our installed base targeting euro gynecology, urology and gynecology core specialties.

And finally third supporting our customers with successful initiatives to continue to drive increased consumable treatment tip utilization and sales.

The entire <unk> organization is committed to these core areas of strategic focus and successfully achieving critical milestones as we advance our S. U S clinical development program toward a potential new indication in the U S.

I'd now like to direct my remarks to our pivotal as Shuai pursuit trial.

Pursuit is a randomized double blinded sham controlled trial with an intended enrollment of 390 subjects with moderate asks you. Why this is defined as greater than 10, MLS and up to 50 MLS of urine leakage on the one hour pad weight test.

At up to 30 study sites in the United States.

[noise] randomized in a two to one ratio subjects in the active treatment are receiving or cryogen cooled monopolar radiofrequency or C. M. R F treatment.

While subjects in the control arm are receiving an inert or energy less sham treatment.

The primary efficacy endpoint of the pursuit trial is a comparison of the proportion of patients who experienced greater than 50 per cent reduction in your on linkage compared to baseline on the standardized and objective one hour pad weight test at 12 months post treatment versus the inner Chan procedure.

Sure.

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 be monitored throughout the study.

Launched in late January pursuit enrollment is ongoing at nearly all 30 study sites, although a bit slower than we anticipated enrollment is now accelerating and we expect completion in the third quarter of this year.

Importantly, positive 12 month data results from pursuit may support a marketing application for a new S. UI label in the United States.

S UI as a condition that affects an estimated 25 to 30 million women in the United States alone.

Based on our estimates this represents a $10 billion to $12 billion total available consumable market opportunity with few effective noninvasive treatments that exist today to reduce leakage associated with that shuai.

As a result of positive pursuit outcome and FDA approval opens a multibillion dollar commercial opportunity for <unk>.

On the commercial and market development front, we continued to see steady improvement from the COVID-19 caused challenges endured during the past year by medical practitioners and clinics worldwide.

In the U S and Asia Pacific are targeted regions of focus progress is gradually returning to full operations patient flow and elective procedure volumes.

We continue to provide high quality service and support to increase for the procedures and treatment tip utilization to our dedicated customer care team in the U S and distribution partners internationally.

As I previously stated.

Our market development efforts in the U S and Asia Pacific are directed towards core specialties of Euro gynecology urology and gynecology. We're pleased to report that receptivity for our innovative dual energy technology is strong and growing.

Two successful key opinion leader physician events were recently conducted one in Beijing, China with Paragon Med Tech our exclusive distribution partner in that country and another in the United States.

The U S event included a select group of female Euro and Euro Guy and physicians, who with Aviva will launch and grow and Influencer network entitled and Pao Her network.

Several of these influencer programs are planned in the coming months. In addition to our relationship building efforts with key opinion leaders in neurology Euro gynecology and incontinence medical societies and associations.

Our goal is to increase awareness of and build upon our tradition of scientific rigor and the body of clinical evidence that supports the safety and efficacy of <unk> treatment as we advance our clinical program towards a potential new S. You eye indication in the U S.

In the first quarter of this year, but we've continued to make significant strides our focus through 2021 is to complete pursuit enrollment.

Expand our install base of Aviv systems in the U S and Asia Pacific targeting core medical specialties.

Supporting existing customers to drive increased treatment tip utilization in sales.

And to continue the operational efficiencies, we have achieved which has lowered our cash burn rate considerably over the past year.

Finally, I'd like to thank the tremendous team at <unk> for their extraordinary efforts this quarter as well as 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.

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.

You're using a speakerphone please pick up your handset before pressing the keys.

To withdraw your question from the queue. Please press Star then two.

At this time, we will pause momentarily to assemble thereafter.

Our first question comes from Ben Hayner with H T. Please go ahead.

Good afternoon, guys. Thanks for taking the questions first off congrats on getting it ramped up to nearly all of the 30 sites are.

You mentioned that you expect completion on the third quarter I think on the Q4 call. You you talked about early Q3, I mean is that is that still kind of the the sense given that the recent acceleration or should we expect you know mid Q3 or late Q3 any color there would be helpful. Yeah, Hi, Ben Thanks.

Joining the call today I appreciate it.

Yeah, just with respect to the trial.

You know enrollment never goes as fast as anybody hopes it does I think we expect it to see enrollment.

Be a little bit greater.

Through February and March, but you know sort of the COVID-19 impact on clinics and sort of the logistics of our clinical.

Clinical trial execution.

Oh, you know played a part and so we're very encouraged by where we are you know a little bit of a little bit more color I can tell you that we've got a lot of patients have been screened and as you know we have.

You know fairly strict inclusion criteria to make sure that we are enrolling in a pivotal trial.

The most appropriate patient population, who is going to have strong outcomes from the treatment.

So generally speaking we're sitting in a good spot today, we see enrollment accelerating now that almost nearly all of the 30 sites.

Our fully operational and enrolling and randomized patients.

And so it's a little difficult to predict whether it's going to be early in the third quarter mid third quarter.

But our hope is certainly in the first half of the third quarter, we can complete enrollment.

Okay. Thanks for the color there that that's definitely helpful.

And then just looking at kind of the revenue breakdown on looks like U S revenue was a bit better than we expected. It was up you know 30 odd percent you know I suppose arguably.

You could say that that they're there may have been more of a COVID-19 impact in Q1 this year than last year even.

Is there anything specific on that debt you can kind of attribute the the the performance too I mean is it certain regions that are performing well as you know kind of across the board what what's the right way to think about that yeah I think.

You know remember that last year, we were it was prior to the readout of our sexual function trial that was still a part of the our clinical development program and can potential commercial opportunity. We were continuing to target a broad group of specialties I think as we went through.

2020, and began to focus and shift our focus to the clinical development program for US you are on the commercial opportunity around S. UI.

You know I think the focus of targeting Euro Gyn, and urology and gynecology has paid dividends, particularly following the positive preclinical and clinical data we achieved an S. UI last August and I think that's really what's driving you know the positive impact in the U S.

As you know as well.

We you know we've got a tremendous customer care team, who is really you know develop best practices for helping clinics and physicians be successful in recruiting patients for treatments.

And so I think that's an element that contributed to the difference in Q1 this year as well.

Okay. That's helpful. And then lastly from me on the empower her program that you guys are gonna initiated here.

To the extent that you can kind of talk about it in the you know kind of current political environment.

Do you see that you know female physicians are you know on average more engaged or more receptive to the technology or you know.

Is it a something that Oh.

You know it is.

Just oh you.

Good thing for the business overall.

Hum.

You know I don't want to I don't want them, you know sort of make gender characterization stuff for them.

I figured it might be a little bit problematic, but yeah, but but let me just say this I think you know the concept was drive by our sales team you know certain individuals in our sales team and it was a tremendous idea on how to tell you that Oh, it's in its infancy right now we have had our first event.

Was very well attended and enthusiasm for the opportunity to participate in a sort of female only physician network.

Which is focused on stress urinary incontinence for a female population was incredibly overwhelmingly positive.

And so we had our first event again, it's in its infancy right now we have several more events planned we think it could gain a lot of momentum and it's certainly good for business, but it's also you know we.

We are a women's health company and you know try to do what we can to advocate.

In that area and this is a you know this is a step forward in that regard.

Okay, great well that's it from me congrats on the progress guys. Thanks, Ben I appreciate you calling in today.

Our next question comes from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.

Oh, Hi, Scott and Jim and Jamie how are you good Jeff how are you.

I'm doing just fine I'm going to skip any questions on <unk>.

Current political environment, and we will go straight to the free with I had so per.

Firstly can you talk about.

The.

Give us a better sense of the pace of the trial. He gave you some sense about the number of sites and how it looks for that kind of accelerate linearly throughout the second and third quarter will then accelerate.

To accelerate its more swiftly.

We think it's going to accelerate sort of linearly you know let me give you. Some perspective there you know we've screened 280 subjects across 20 on a 25 centers roughly.

And obviously these numbers change on a daily basis, we have some strict as I mentioned in our in the previous response, we have some strict inclusion criteria really aimed at making sure that we have a predominant stress incontinence patient population in this trial are incredibly important for the ultimate outcome of mesh.

<unk> responders from a pad weight reduction perspective, we don't want a bunch of patients who are predominantly urge incontinence patients.

And so you know a proportion of those 280 have been randomized and treated today.

But now we've got all 30 centers up and enrolling I will tell you that just from a from.

From an interest level perspective, we're doing local.

Social media advertising around all of our site and we've seen 3500.

Forms be submitted by women, who are interested in participating in the trial.

So we're confident that the numbers are there you know I think it took in.

In the COVID-19 environment, a bit longer than we had anticipated early in the first quarter to get up and rolling.

But I think were there now and I think we'll continue to see sort of randomization and treatments accelerate as we move through the next couple of months.

Okay got it could you talk about.

With interest from approval her that day in and they play out outside the U S would it be something that you would you would on with our clearance here.

Go for XI and others directly.

Yeah, we will certainly do.

Do everything we can to best leverage a positive clinical outcome from pursuit in the United States and you know, we we I don't want to speculate about the possibilities there but you.

You know health, Canada, CE, Mark and other countries may be willing to accept.

That data, particularly on an FDA clearance to allow for an approval in that country.

So we believe there is an opportunity to significantly leverage yet, but we'll have to go through that process at that time.

Okay could you give us a sense of demographic age as far as the current trial and then maybe compare that are concerned on starwood.

How you think about the Tam and what that May look like in the U S and abroad.

Well, we're focused from a trial perspective, I think the single biggest differentiator there between the Tam NR enrolled population as we are focused on a pre menopausal patient population for the trial.

We did that because it has been our history. That's been part of the inclusion criteria criteria of historical trial, our historical effort in S. E Y and we didn't want to introduce new variables going into our pivotal I think that is.

The single biggest factor from a type of patient perspective between the trial on the total available market that being said you know I don't believe that's going to limit.

Our opportunity if we have a positive trial outcome and get an FDA clearance for stress incontinence in.

Indication.

There's nothing nothing to suggest that our treatment can't be used in a post menopausal patient who.

It has similar S UI characteristics.

And you know severity.

So that's the biggest difference.

Okay got it and then lastly from me on.

Jim on the income statement can you give us a sense of the Orange Giovanni doesn't seem like that's going to kind of peak out.

In the second quarter or the third quarter I think we had previously thought it would be towards the latter part of the year is that going to come a little bit earlier force.

Okay.

Yeah, I mean, it's we expect it to pick up a little bit more in the second quarter, and then it's going to level back down after that but.

So it's not gonna be anything too.

Too dramatic, but it will peak in the second quarter, and then start to lever back down in the third quarter and then come back down later in the fourth quarter and then through next year.

Okay I got it.

It's helpful. Thanks for taking the questions I appreciate it sure. Thanks, so much I appreciate your participation.

This concludes our question and answer session on the conference has also now concluded.

Thank you for attending today's presentation you may now disconnect.

Okay.

Okay.

Okay.

Yeah.