Q2 2021 Viveve Medical Inc Earnings Call

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

All participants will be in listen only mode.

Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays present prepared remarks, there will 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 company's future financial performance.

Any statement that is not a statement of historical fact is forward looking 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 S. E C, which are also available on the company's website.

Also any forward looking statements represent managements view only as of the date of this conference call and should not be relied upon as representing management's views as of any subsequent date.

Speaking on today's call will be Scott Durbin the V C E L and Jim Roberts Senior Vice President of Finance and administration.

I'll now turn the call over to Jim.

Thank you Jamie and good afternoon, everyone and thank you for joining the call today.

I will begin today's call with a brief review of our second quarter 2021 financial results.

I will then turn the call over to Scott, who will provide a corporate update and open the call to questions afterward.

Today, we reported total revenue for the second quarter of $1.7 million from the global sale of seven systems and approximately 3500 consumable treatment tips.

As of the end of the second quarter 2021 company had an installed base of 859, but these systems worldwide.

Second quarter total operating expenses were $5.1 million compared to $4.6 million for the same period last year.

The increase is mainly a result of the company's efforts to advance our stress urinary incontinence, whereas <unk> clinical development program.

We ended the quarter in a strong cash position due to our continuing operational measures to manage our cash burn.

As of June 30th 2021, we reported cash and cash equivalents were $25.4 million.

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

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

I'll begin my remarks today based on the positive financial results and capital position of the company that Jim just reported.

<unk> strong financial position as a result of the efforts of our entire organization, which is focused on advancing our stress urinary incontinence program toward a potential new indication.

Initiation of our pivotal U S pursuit trial in the first quarter represented a critical milestone in that effort and we are looking forward to achieving the next milestone completion of 390 patients randomized in the trial.

We have a high level of confidence in the strength of the pursuit study design and in our ability to execute our strategy to achieve a potential asks you why indication in the United States.

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

Number one rapidly advancing the currently underway pursuit trial and achieving a positive data readout if positive preparing to commercially launch the first FDA approved patent protected and do that you know office space dual energy treatment for urethral hypermobility to improve.

<unk> S UI in women.

Secondly.

Focusing our commercial and market development efforts on the U S and Asia Pacific regions through the expansion of our installed based targeting euro gynecology, urology and gynecology core specialties.

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

As I previously stated our entire organization is committed to these core areas of strategic focus as well as continuing to achieve critical milestones as we advance our S. U I clinical development program towards a potential new indication in the U S.

I'd now like to direct my remarks to the specifics of our pursuit trial for Us UI.

Pursuit is a randomized double blinded true sham controlled trial with an intent to randomized 390 subjects with moderate S y <unk>.

Moderate asks you why is defined as between 10 and 15 milliliters of urine leakage on the one hour pad weight test at up to 30 study sites in the United States.

Randomized at a two to one ratio subjects in the active treatment arm will receive or cryogen cooled monopolar radiofrequency treatment, while subjects in the control arm will receive a true inert or energy less sham treatment.

The primary efficacy endpoint is the pursuit trial is a comparison of the proportion of patients who experience greater than a 50% reduction in urine leakage compared to baseline on the standardized and objective one hour pad weight test at 12 months post treatment versus the interchange procedure.

Sure.

This study also includes several secondary endpoints assessed using the one hour pad weight test the three day bladder voiding diary.

And other behavioral and quality of life questionnaires sub.

Subject safety will also be monitored through the study.

As I previously stated pursuit was launched in late January and enrollment is underway today at 28th study sites with two additional sites currently being activated.

Over the course of the first couple of months as study sites were on boarded and trained patient randomization were slightly lower than we originally anticipated how.

However in May we launched supplemental patient and site specific marketing efforts, which greatly accelerated patient enrollment and randomization.

Since may patient interest in this study has been extremely high we now have seen over 8300 patients complete the pre screening questionnaires of which over 1700 and 50 patients had been qualified from that process.

It is important for me to underscore that the pursuit trial is highly powered with strict inclusion criteria for the proper diagnosis of moderate S. UI.

The trial was intentionally designed to better assess the primary efficacy endpoint and potentially increase the probability of a positive outcome.

That said and with enrollment continuing to gain momentum.

<unk> pursued enrollment stands at 653 patients with 202 patients randomized and an additional 100 patients currently in screening.

Further our study sites have a goal to screened three patients per week, which puts us on target to complete enrollment early in the fourth quarter, just slightly behind our original Q3 estimate.

Importantly, positive 12 month data results from pursuit may support a marketing application for a new S. U Y label in the U S to put this into perspective as you is 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 to reduce leakage associated with S. UI.

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

On the commercial end market development front medical practitioners and clinics worldwide have continued to show steady improvement from the COVID-19 caused challenges in the past year.

We will of course continue to monitor and assess any impact resulting from the current delta variance surge in specific states and geographies.

In the U S and Asia Pacific are targeted regions of focus many practices have returned to full operations patient flow in elective procedure volumes and our dedicated customer care team in the U S and distribution partners internationally continued to provide high quality service and support.

To drive increased procedure volumes and treatment tip utilization.

These positive efforts resulted in approximately 3500 consumable treatment tips sold globally in the second quarter.

And this represents a 29% and 50% unit increase quarter over quarter and treatment tip sales for the U S and international markets respectively.

As I previously stated our commercial and market development efforts in the U S and Asia Pacific are directed toward core specialties of Euro gynecology urology and gynecology.

Although we have a very small commercial sales organization in the U S and Asia Pacific region. Their efforts are demonstrating strong and growing physician receptivity for our innovative dual energy technology.

Further several successful key opinion leader physician events were held in the second quarter and targeted Asia Pacific countries.

In the U S. The empowerment network of select female Euro and Euro Guy and physicians that I referenced in our Q1 call reconvened and more S. UI physician Influencer programs are planned in the coming months.

These programs continue to augment our relationship building efforts with key opinion leaders in urology Euro gynecology and within continents 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 the beef treatment as we advance our clinical program towards a potential new S. You eye indication in the U S.

Strategically as the pursuit trial progresses, we initiated a long term reimbursement effort to support and expand the potential long term commercial opportunity of our noninvasive single session durable as shuang treatment.

The company's announcement in early July of a new technology category three CPT code from the American Medical Association establishes a long term pathway for potential reimbursement pending a positive pursuit trial readout and FDA approval of a nephew I indication.

Issuance of the new code is a significant milestone and further reflects the strong clinical evidence and potential benefits of our dual any energy procedure for improving as you lie in women.

As reviewed by the a M a and supported by key medical specialty societies.

Again this is a long term process, but one of great value to pursue as we believe that the the procedure could ultimately become a preferred S. Shuai treatment option that may be broadly covered by insurance in the future.

The second quarter of this year was one of diligence and focus as the entire organization advanced our S. U I clinical development program and successfully executed our core initiatives our focus through the remainder of 2021 is to complete pursued enrollment.

Expand our installed base in the U S and Asia Pacific regions with core medical specialties support our existing customers to drive increased treatment tip utilization and sales and to continue the operational efficiencies. We have achieved that has lowered our cash burn rate considerably over the past year.

Finally, I'd like to thank the dedicated team at the V for their continuing 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.

We will now begin the question and answer session.

To ask a question you May Press Star then one on your Touchtone phone.

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

To withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

And our first question will come from Jeffrey Cohen of Ladenburg Thalmann. Please go ahead.

Hi, Scott and Jim. Thank you so much for taking our questions. This is actually destiny on for Jeff.

Maybe we could begin with the CPT code.

Could you touch a bit more about how this could benefit you ahead of regulatory approval and could you also touch upon the time savings. If may have provided you with doing it ahead of approval as opposed to after.

Thanks, Stephanie and thanks for the question I appreciate you listening to the call today so.

You know the standard process and reimbursement is is for a new technology is to first get a new technology C. P. T three code.

With the support of Peru by M. A N and it requires.

A review of our data and the safety profile of the technology.

With key medical societies, like a UA and others, who.

You know govern neurology and neuro gynecology.

And it's an important first step in a long term process towards ultimately gaining a category one code and achieving a reimbursement level with private payers in the United States.

So what the category three code does is it sets us on that trajectory. It allows us to track procedures and most certainly will accelerate the process of achieving that category code category. One code. Once we have and if we have a positive read out from pursuit.

And if we get a marketing Ah indication from FDA.

So it's it just shortens the process, but it's a necessary and a very important step for the long term you know reimbursement prospects for a new technology.

That's excellent. Thank you and I know you had migrated you believe university to a more virtual setting almost entirely virtual or do you have any plans to bring that in person or maybe a high hybrid of that.

Yeah. It was certainly a extraordinarily successful programs Aviv you are as you mentioned you know for a lot of different reasons. We've missed it for the last 18 months, we've tried to do our best in a virtual setting for now we're continuing in a virtual.

Setting, but we continue to monitor the overall environment and physicians willingness to travel and you know take part in you know that kind of event in person and we're certainly anxious to get back to you know sort of in sort of the in person education, but for now we're continuing to do it virtually.

Yeah.

Okay. Thank you and finally are there any other trends Oh, you asked that you could call out that supported growth this quarter and any insights in some of the trends for potentially Q3 as well.

Yeah, we saw remarkable a increase and we continue to see you know remarkable adoption and increase procedure volumes and utilization of the consumable treatment tips as noted by the level of unit sales in Q2 are really the strength in the APAC.

Region as in South Korea, and in Taiwan, and China, We have very strong distribution partners that continue you know long term distribution partners that have continued to.

Support our technology, and and the clinics and physicians, who perform our procedures in those countries.

So you know it's been a very steady state business for US we continue to see a growth. There. We're very encouraged you know just in the overall environment by the by the volume of procedures and utilization both in Asia and in the United States.

And you know pending anything you know delta variant related or other variant related I'm. You know our hope is that we're going to continue to see that trend continue in the U S as well.

Okay, great. Thank you I'll take the rest of my questions offline.

Thanks, Stephanie.

Yeah.

The next question comes from Ben Hayner of a G. P. Please go ahead.

Good afternoon, guys can you hear me Okay. Yep can you hear you fine thanks Ben.

Great.

Well congrats first of all congrats on the quarter and the progress that you've made enrolling.

It really sounds like you kind of have a pretty good visibility into the.

Insight so to speak.

Could you remind me whether or not you guys plan to disclose any kind of immediate procedural success data once it is fully enrolled.

Do you mean sort of an interim analysis or.

In terms of hybrid.

Goodbye.

All of the three best.

We're successful or immuno exco.

If we're successful I know you haven't had issues.

But.

I just was wondering if theres going to be any data.

Before the big Big data.

Yeah, I think you know our next our next disclosure will certainly be around full enrollment of the trial. When we our randomization numbers are you know the one once we highlighted a 202 patients.

Completely randomized in the trial infers that they had a successful treatment. So we will announce when we hit the 390, Mark at which point all 390 of those patients will have received a successful treatment. So we haven't had really had any issues on the.

Treatment side.

Okay I got it figured out.

Okay.

And then just.

You've got the CPT three code in place.

There's a process to get them to see if you wanted to I apologize I didnt.

Didn't have my full attention on your answer to <unk> question. So.

I do apologize there but.

Any special considerations to kind of keep in mind.

You kind of go through the rock process and a value gets assigned to the the treatment.

Yeah, there's a lot to keep in mind actually and so you know as the CPT. Three code is released at the beginning of 'twenty 'twenty. Two will begin to track procedures. We will have that data are you know are we intend to read out on a topline basis the pursuit talk trials.

Primary efficacy endpoint at least top line and in Q4 of next year and as quickly as we can submit for marketing application to FDA.

During all of that time, we'll be working towards you know a massive commercial launch are in stress incontinence in anticipation of the label when the label comes or or you know following the full you know a clinical study report from the trial, we will look to have that data published.

As quickly as we can it is really the publication of the pursuit trial data.

That is the trigger point for the application of the CPT One code.

Uh huh.

And so we will you know get it published as quickly as we can.

File for the CPT, one code and begin that process and from there you know it takes one to two years.

To sort of get all the payers onboard and and you know work through that process, but you know, it's an important process, particularly for our procedure and there are lots of considerations from a pricing perspective that we will you know we will spend a lot of time on between data readout and FDA clearance a we've had a.

A lot of conversations with you know many of the major payor private payers in the United States about the technology about the trial about the ultimate indication in the treatment and we've gotten great feedback from them on sort of <unk>.

Bracketed reimbursement levels for our procedure, specifically and so we will continue to work with them and refine that and gather more data and ultimately a lot of the reimbursement level will come down to the pricing of our treatment tips and again, that's something we will work through are in.

Future, if we have a positive trial readout.

Okay that makes sense.

Just kind of thinking about it if everything kind of track.

Plan in the publication.

Yes.

Asap.

Presumably you're going through the rock process in 2023, I mean, you mentioned one to two years.

The stability that you get out of the reimbursement in place.

2020 for too early to tell I you know that's a good that's a good guesstimate I'll say it that at this point in time in the 'twenty 'twenty four time frame, we will certainly start to get some.

Some payers onboard at that time.

We'll do a lot of work.

You know forthcoming to make that happen all of that process happen as quickly as possible.

So our hope is certainly to have some level of coverage from a you know some of the private payers by the early 'twenty 'twenty four time frame.

Okay, Great and then just lastly for me just curious.

Well not any but a lot of the existing accounts or are kind of paying attention to the pursuit study you know whether you get it all.

Questions about that.

What's your sense of the reaction from existing accounts to what you guys are doing yeah people are thrilled our you know our current accounts are thrilled with what we're doing I'm you know they they have long been aware of the fact that we've been data driven and our ultimate goal has been to get a women's intimate health indication.

You know the the benefits of that are you know Ah self explanatory with respect to having being the first on label device. It opens up the market opportunity considerably and you know so many of our physicians are.

Paying very close attention to you know were pursued is in the process and.

You know are hoping that our you know the pursuit trial data reads out as as consistently as many of our current providers see in their practices on a daily basis.

Okay, great well.

That's all I have thanks, a lot for the questions guys. Thanks, so much bad and I appreciate everybody dialing in today. Thank you.

Yeah.

This.

Concludes our question and answer session. The conference has now also concluded. Thank you for attending today's presentation and you may now disconnect.

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