Q2 2021 Vivos Therapeutics Inc Earnings Call
[music].
Please standby were about to begin.
Good day, everyone and welcome to the vivo Therapeutics second quarter 2021 conference call. At this time participants are in a listen only mode.
Question and answer session will follow management's remarks. This conference call is being recorded and a replay of today's call will be available on the Investor Relations section of the those website and will remain posted there for the next 30 days.
I'll now hand, the call over to Mr. Edward low vivo says Investor Relations officer for introductions.
Leading of the Safe Harbor statement. Please go ahead Sir.
Thank you operator, Hello, everyone and welcome to vivo Therapeutics second quarter 2021 earnings Conference call.
Copy of the company's earnings press release is available on the Investor Relations section of our website at Www dot the vivo slice dotcom with.
On today's call are Kirk Huntsman, Devos, Chairman and Chief Executive Officer, and Brad and then Chief Financial Officer Today, We will review the highlights and financial results for the second quarter 2021, as well as more recent developments.
Knowing these formal remarks, we will be prepared to answer your questions.
I would also like to remind everyone that today's call will contain certain forward looking statements from our management made within the meaning of section 27, a of the Securities Act of 1933 as amended and section 21 E of the Securities and Exchange Act of 1934 as amended concerning future events words, such as May.
Should <unk>.
<unk> expects intends plans believes anticipates hopes estimates and variations of such words and similar expressions are intended to identify forward looking statements.
These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the company's control.
Actual results, including the results of the both whose growth strategies operational plans future potential results of operations or operating metrics and other matters to be addressed by members of management. In this conference call may differ materially from those expressed or implied by such forward looking statements.
Factors that could cause actual results to differ materially include but are not limited to the risk factors described in other disclosures contained in vivo through filings with the Securities and Exchange Commission, including our second quarter, 2021, 10-Q, which is being filed today as well as in our most recent Form 10-K.
Which can also be accessed on the Ddos Investor Relations website.
Except to the extent required by law. The boss assumes no obligation to update statements as circumstances change now at this time. It is my pleasure to introduce Kurt Huntsman, Chairman and CEO of Cmos Kirk. Please go ahead.
Thanks, Ed and thank you everyone for joining us today on our second quarter 2021 earnings Conference call.
I'm excited to review our strong quarterly results and provide you with an update on our progress.
Afterwards, our Chief Financial Officer, Brad Amine will review the highlights of our second quarter financial results Paul.
Knowing that we will be happy to take your questions.
Our second quarter revenue results were quite strong well ahead of our internal forecasts and analysts.
This is due to the continued recognition and adoption of our vivo system as a treatment for mild to moderate sleep apnea by members of the medical and dental communities as well as the benefits of our accelerated growth actions, including our focus on strategic sales and marketing initiatives we.
We are also beginning to see revenue from beyond our core of VIP enrollment revenue and appliances, such as the value added services, we offer our vips and their patients as well as management revenue from our medical integration Division.
As we are still relatively new to being a public traded publicly traded company I'd like to briefly recap our mission and strategy.
He was a growing medical technology company.
Since the beginning our mission has been to rid the world of obstructive sleep apnea or OSA.
To realize our goal of vivo is focused on developing and commercializing innovative treatments for adult patients suffering from sleep disordered breathing, including OSA.
For those of you not familiar with OSA is a chronic illness that impacts nearly 1 billion people globally and over $54 million in the United States.
Over 80% of OSA suffers are unaware they even have a condition.
Mostly because getting a proper clinical diagnosis is often confusing and costly especially for children.
Because of these challenges.
Majority of these suffers remain undiagnosed and untreated.
Those that are properly diagnosed are often left with extremely unattractive treatment options.
[noise] include having to wear a CPAP machine every night for the rest of their lives or subjecting themselves to costly painful.
An invasive surgery.
At vivo, we believe we simply have a better way to treat OSA than the current standard of care.
Our highly effective vivo system treatment is delivered within a comprehensive treatment ecosystem located within especially trained and equipped dental offices and supported by medical and other healthcare professionals.
Through our growing network of vivo trained dentists, we offer an easy to use low cost screening test using our vivo score ring recorder device powered by sleep image that is dispensed by a dentist or a medical doctor.
In our experience about half of patients tested with vivo score will screen positive for OSA.
Once diagnosed by a qualified physician patients receive a.
Please evaluation work up performed onsite by trusted dentist.
From there they are given and it clearly laid out and comprehensive treatment plan offering them specific treatment options.
Due to our efforts to educate healthcare and dental professionals. Many are choosing vivo treatment, which the majority of patients complete in just 12 to 24 months.
Upon completion, 97% of patients report, having achieved their primary treatment objectives and over one and four should see their OSA symptoms completely resolved.
In most cases, no further treatment or intervention is required.
We have made great progress in spreading the word about the benefits of vivo treatment options through our target audience. The estimated 200000 general dentists and dental specialists across the U S and Canada.
As of today, we have trained over 250, dennys across North America and internationally in the use and application of the vivo system.
Our dentists are enrolled in our vivo integrated practice or VIP program, which offers training and other value added services in connection with the with using the vivo system.
Turning now to the second quarter results, we achieved revenue growth of over 37% on a year over year basis, and 30% over the first quarter of 2021.
Although I would like to note that the year over year comparison does reflect the drag on our revenue last year caused by Covid.
We are thrilled with these results, which demonstrate the effects of our accelerated growth measures with rising enrollments by new VIP, Dennis and sequential quarter increases of 25 and 34%.
For products and services revenue respectively.
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Our increased revenues also reflect our emphasis on strategic sales and marketing initiatives, which have been designed to foster further recognition and adoption of the vivo system by the medical and dental communities.
Given our revenue and VIP growth during the second quarter I think it's clear that these initiatives have positively impacted our performance.
In addition to our topline results I'm pleased to report that for the second quarter of 2021.
We recorded gross profit of approximately $3.6 million, a 33% increase compared to gross profit of approximately $2.7 million for the same period in 2020.
We also achieved gross margin of 281% up sequentially compared to gross margin of 78% for the first quarter of 2021, although down slightly year over year.
We also exceeded 19000 total cases treated with the vivo system and we ended the quarter with cash and cash equivalents of $34.2 million as of June 32021.
Brad will review our financial results with you in more detail.
He goes to say we were very pleased with these results.
In addition to our core business lines during the quarter. We also began to see strong demand for our new vivo score diagnostic product and <unk> therapy service.
As I mentioned earlier vivo score as a home sleep test for both children and adults within.
Within 24 to 48 hours of testing patients, who test positive receive a telemedicine console and confirming diagnosis and prescription for treatment from a qualified sleep specialists.
Although we generate some revenue from vivo score, we mainly view this product as a screening and diagnostic tool to get the dentists and their patients talking about and treating sleep apnea with the vivo system.
Our other new product mile correct as a service where trained therapists will provide veeva trained dentists access to oral phase show mile functional therapy also known as O M T via telemedicine technology.
Both of these offerings were launched in the second quarter and I'm happy to report that the initial demand we receive for both has exceeded our expectations.
Based on this demand we continue to expect these products will represent meaningful upside to our revenue potential as they build further momentum throughout the remainder of this year.
The caveat here is that in Q3 and eventually moving into Q4, there are unknown impacts of the surging Delta variant of Covid on dental practices patient visits and consumer sentiment.
In addition to our second quarter results. We've also made strides in other areas.
In April we announced the appointment of Dr. Meaning coronary widely acclaimed as a leading integrated cardiologist as an independent consultant serving in the role of the medical director of clinical education.
As previously announced Doctor coronary is also one of several physician owners of the versus first news Omnia Center, which opened in March and is located in Delmore, California.
Addition to her other responsibilities related to vivo says first Giussani center for which <unk> earns management fee revenue her duties as medical director of clinical education include the promotion and expansion of vivo says medical integration Division, which was launched in 2020 with the goal of creating strategic alliances between the medical.
Dental communities.
So more medical doctors could work directly with Dennis including dentists, who participate in the VIP program for trading sleep disorders in patients.
Vivo score we believe this will further this will further the diagnosis and treatment of OSA with vivo system.
Also during the quarter, we completed an underwritten follow on public offering of four 6 million shares of common stock to support our continued growth. This included the exercise in full of the underwriters' option to purchase additional shares of common stock for total net proceeds to the company of 25.
$4 million.
Brad will discuss this in more detail later in today's call.
Suffice to say this has considerably strengthened our balance sheet, leaving us well positioned to continue our growth during the remainder of this year and beyond.
We have also continued to publish exciting new findings from real world data.
Following the quarter end in July we unveiled new data from a patient survey commissioned by Devos related to the use of the vivo system.
I'm pleased to report that our findings included a 97% vivo patient satisfaction rate in.
In addition study findings showed that over one and for vivo as patients experienced a complete resolution of their OSA for those treatment.
After we initially made that particular announcement there were some online pundits who suggested that these results weren't all that impressive.
We emphatically disagree.
As there are as we are unaware of any other treatment modality for OSA that can make a similar claim without lifetime intervention or surgery.
Moreover, we plan to continue to publish clinical results from ongoing and future studies as they come in and that we believe will continue to confirm the compelling benefits being realized by vivo patients and providers.
Our firm belief is that patient clinical successes are the ultimate driver of our business model.
The fact that nearly all patients surveyed reported they had achieve their desired treatment outcome is a powerful statement and is further proof of just how well the vivo system works.
More recently I'm happy to share that just last week, we opened the vivo <unk> Institute International Training Center in Denver, Colorado.
This 15000 square foot state of the art facility was established to augment our current highly acclaimed online training programs to offer advanced post graduate education and training to dentists dental teams and other healthcare professionals from around the world and a live hands on setting.
Of course curricula at the Institute include General courses on sleep and breathing disorders, as well as training in patient screening and understanding sleep test various therapeutic protocols and treatment options medical billing and best practices for in office systems and integration of the vivo system.
The new training facility can accommodate three to 400 medical professionals per day.
Here, we will continue to educate healthcare providers about OSA endeavours treatments for OSA within their practice areas as well as provide dentists training on <unk> related practice management tools. We are absolutely thrilled to establish this institute, which significantly increases our clinical.
Raining capacity, while also enabling us to leverage the technology that we've built into the center to provide the highest quality training for dentist all across the world.
You can learn more about the institute by going to Www, The vivo Institute Dot com.
So in closing the second quarter was a significant period for us as the nation began to emerge from what now appears to be the first round of Covid infections and Lockdowns.
We achieved considerable revenue growth. This is the result of our accelerated growth actions, which we implemented by strategically deploying from our December IPO and may follow on offerings.
These actions not only drove our strong second quarter performance, but have also established a strong foundation for our future growth potential in future quarters.
In addition to the substantial uptick in VIP growth in appliance sales, which showcases continued adoption of the vivo system. We are also seeing strong demand for our new product offerings, including our vivo score a diagnostic product and mile correct therapy services.
While these products were only recently launched in Q2, the strong demand we've seen supports our belief that these products represent substantial potential upside to our growth prospects.
As we look to the future working closely with our marketing partner Osman marketing, we are launching aggressive social media and other marketing campaigns, along multiple fronts to both providers and consumers. We believe these initiatives will help raise awareness of our brand and the compelling benefits of our treatment for people.
From OSA.
Now that our network of trained clinical dentist is beginning to fill out across the U S and Canada, we have begun to reach out directly to a number of dental support organizations or dsos.
According to Morgan Stanley over eight 3% of practicing dentists in 2019 belonged to Dsos in the United States and that number is expected to grow to as much as many as 25% to 30% by 2025.
These corporate dental practice, the operator's control thousands of general dentistry and specialty practices throughout North America. We are currently in active discussions with several dsos and hope to launch pilot programs with them by the end of the third quarter.
In addition, we are piloting other initiatives that are intended to make it easier for more dentists to actively screen and refer their patients to VIP dentists.
If successful we will leverage the results to aggressively expand our service offering to a large number of dentists, who may not be ready to become fully trained vips under our current program.
This initiative could open the door for many more dentist to be exposed to vivo <unk> and many more patients to receive the care they need for their OSA.
Finally, we are actively engaged in forming additional strategic alliances and commercial relationships with industry partners and major health insurance Payors as well as prominent leaders in the medical and dental professions.
Those alliances and our relationships come about we will be making further announcements. We are extremely proud of all our accomplishments to date and are even more enthusiastic about our prospects for the future. We look forward to updating you on our progress as we continue to execute on our strategic growth initiatives.
This concludes my opening remarks, now I'll pass the call on to Brad who will review our financial results Brad.
Thank you Kirk and good afternoon, everyone.
Today I'll review, our second quarter 2021 financial results.
We reported total revenue of approximately $4.5 million for the second quarter of 2021, an increase of 37, 5% compared to approximately $3.3 million for the second quarter of 2020.
This increase was related to revenue from appliance sales VIP enrollments.
Billing intelligence service subscriptions and initial management fees from our medical integration Division or <unk> program.
Revenue growth in 2021.
When compared to 2020 is partially attributable to the negative impact of COVID-19 on our revenue during the second quarter of 2020.
During the second quarter, we enrolled 73, Vips and recognize revenue of approximately $2.4 million compared to 101, Vips and recognize revenue of approximately $2.5 million during the same period last year.
During the three months ended June 32021, we sold 3082 total oral appliance arches for a total of approximately $1.6 million an increase from the three months ended June 30th 2020, where we sold 1266 total total clients.
<unk> for a total of approximately $600000.
The increase in appliance revenue is due to volume increases.
For the six months ended June 32021 revenue increased 23% to more than $7.9 million compared to approximately $6.5 million for the six months ended June 32020.
The increase was attributable to the same factors I mentioned earlier during the first six months of 2021, we enrolled 126 Vips for revenue of approximately $4.1 million compared to 133, Vips and revenue of approximately $4 million for 2020.
Additionally, our billing intelligence service revenues increased from approximately $300000 for the first six months.
Of.
2020 compared to $400000 for this first six months of 2021.
During the first six months ended June 32021.
We sold 5652 oral clients arches for revenue of approximately $2.9 million. After the six months ended June 30th 2020, we sold 3365 total oral clients arches for revenue of approximately $1.9 million.
The increase in appliance revenue is also due to volume increases for the six months ended June 32021.
Gross profit was approximately $3.6 million for the second quarter of 2021, and approximately $6.3 million for the six months ended June 32021, compared to gross profit of approximately $2.7 million at approximately $5.1 million for comparable periods in 2020.
Gross margin for the second quarter decreased slightly on a year over year basis to 81% compared to 83% during the last years quarter as during the height of the pandemic many Dennis enrolled into our VIP program and revenue shifted to higher margin service revenue in the second quarter.
2020.
Our business continues to be driven by high margin service revenues, including VIP enrollments drilling intelligence service revenues during both the three and six month periods.
Gross margin for both the first six months of 2021 and 2020 remain constant at 79%.
Sales and marketing expense increased by approximately $1.2 million.
$2 million to $3 million for the six months ended June 32021, compared to approximately $1.1 million for the first six months ended June 30th 2020.
The increase was primarily due to an increase of approximately $700000 in sale.
Because of sales commissions on increased sales approximately half a million.
Due to our new marketing campaigns updating marketing materials for investors and Vips and promotion of Congressman conferences and events taking place through June 30th 2021.
General and administrative expenses were approximately $6.1 million for the second quarter of 2021 and.
And approximately $11.2 million for the six months ended June 30th 2021, compared to approximately $3.5 million and approximately $7.7 million for the three and six months ended June 32020, respectively.
The year over year increase was mainly due to higher expenses related to our increased personnel associated with supporting our sales growth as well as our status as a public company, which started in late 2020.
We realize these expenses were somewhat higher than what analysts had modeled.
Which reflect higher than anticipated revenues from our core business as well as the beginnings of revenue from our new products and services, including vivo score diagnostic product and the micro correct therapy services.
As well as management fee revenue from our medical integration Division and sponsor ship revenue, which accounted for approximately 1% of Q2 revenue.
Net loss was approximately $4 million for the second quarter of 2021.
<unk> to one $4 million for the second quarter of 2020.
The quarter over quarter increase was primarily due to higher G&A due to the factors that I mentioned earlier.
Net loss for the six months ended June 32021 was approximately $7.4 million compared to $4 million for the first six months of 2020.
Turning now to our balance sheet.
In may we enhanced our liquidity by completing a follow on public offering of four 6 million shares of common stock at a public offering price of $6 a share.
The offering consisted of 4 million shares of our common stock as well as an additional 600000 shares pursuant to the exercise in full of the underwriters' option to purchase additional stock.
This generated aggregate net proceeds to the company of approximately $25.4 million.
As for the rationale of the raise with greater than expected demand. We've seen for our recently launched Veeva score and Mario correct products, Our management and board of directors determined this additional capital could be highly effective at this particular time.
Since closing the offering we have been making targeted investments.
As additional salespeople to support our growth.
As evidenced by our second quarter results, we are already seeing the benefits of deploying this capital and expect to realize accelerated revenue growth through these new revenue streams during 2021 and beyond.
At June 32021, our cash and cash equivalents were approximately $34.2 million compared to cash and cash equivalents of approximately $14.1 million at March 31.2021.
With the proceeds from our December IPO and successful follow on offering in May we anticipate having ample financial resources to meet our capital requirements Fund our operations and continue executing on our capital strategy for the foreseeable future.
Moving forward, we will continue to aggressively expand our presence within the medical and dental communities with our expanded sales force and continuing to introduce and educate healthcare and dental professionals on the benefits of the Viva system for their patients.
Our recent sales momentum is a strong testament to the increased awareness and adoption of the Viva system throughout both the dental and larger healthcare communities.
We continue to see strong demand and increased usage of Veeva products and services, both in our core business as well as.
Our recently introduced products and services, including vivo score a mile correct.
And the medical integration Division.
We're hopeful that the current trends we are seeing in our business will provide momentum through the balance of 2021 and beyond.
At the same time.
We will remain prudent with our expenses and management of working capital maintaining strong expense management practices, while continuing to deploy capital strategically to support our continued growth.
That concludes our prepared remarks, now I would like to turn the call over for questions. Cody. Please go ahead.
Thank you if you'd like to ask a question. Please signal by pressing star one on your telephone keypad, if youre using a speaker phone. Please make sure that your mute function is turned off to lay your signal to reach our equipment. Once again that is star one if you would like to ask a question.
We'll take our first question from Alex Nowak with Craig Hallum Capital. Please go ahead Sir.
Great Good afternoon, everyone.
There are a lot of good color on the on the marketing spend I just wanted to dig in there a little bit more so the investment that you're making can you kind of mentioned how youre allocating it is it building out more teams on the sales side more feet on the street is it more around the branding exercise is it more around.
Patient and customer reach out there just any detail would be helpful.
Yeah, Great question so.
We're approaching this in phases, Alex So we've got the first order of business for US. We believe was to establish a network a national network throughout the U S and Canada for for Doc for doctors to be able to treat the patients. This means that we.
Had to focus our marketing efforts almost entirely on the professional community the dental community.
And then we began augmenting that last year by introducing the vivo system to the medical community. So we are our initial.
Thrust here has been with the professional community we are.
Beginning.
To move our emphasis and our spend our marketing spend over into a broader.
More consumer oriented type type of spend you will see in the months ahead ahead, you'll start to see actually in the next few weeks, you'll start to see a greater emphasis on social media, you'll see things that are.
There'll be more.
Consumer oriented type.
Type offerings in terms of media spend and so we're actually beginning to transition to where we're not only are we continuing to.
To spend money to attract additional providers, but we're also beginning to.
Generate some brand awareness amongst consumers so youre seeing us go through a little bit of an evolution here as we sort of find that we filled out the network to the point, where when we do make a a a market spend on social media. There there are doctors available to treat patients whose leads come in.
So that's that's really the way that we're spending our money that's how we see the go forward strategy.
Yes, no that's great and Kirk you, obviously have a lot of experience on the DSO side. So I thought the commentary you had on the call in the press release. It was really interesting there so with the pilot program.
A successful well.
Would it basically be like a large mass amount of vips coming onto the platform. If you did sign up for this DSO or how would that work and what are you thinking about timing in there.
Well that's another great question so.
A little background is probably in order here so.
The DSO universe is.
Basically there are several major players in the DSO World. These are operators that have hundreds and hundreds of dental offices scattered across multiple states and then theres a whole new generation of DSO operators that are smaller.
They may have anywhere from three to 50 different offices. So the the the universe is expanding the DSO space is expanding one of the unique aspects of this is that there's never been a DSO to our knowledge that has successfully implemented a sleep a dental sleep program.
And there's many reasons for that one of the reasons one of the major reasons for that is simply that it takes a lot of different kinds of training capital equipment expenditures staff training at whole changeover in workflow process.
And then the medical billing part becomes an obstacle for them as well. So every attempt thus far that I'm aware of in the DSO space has proven to be.
Very very problematic and and that's across the board what what we are going to them with is a radically different program. That's made possible by our vivo score devices. So what we're doing is we're going to the dsos with a different type of a value proposition we're.
We're not asking them to spend hundreds of thousands of dollars per practice on training and and cap capital expenditures, we're not asking them to upset their whole workflow process throughout their general dentistry or specialty practices. What we're doing is we're leading with the tip of our spear, which is the <unk>.
Vivo score product in a program that takes and asked them to go and introduce this into their hygiene programs, where their patients are cycling through hygiene, and the hygienist or screening and offering the vivo score screening device as a means of getting a baseline for the <unk>.
Patients in their practice so all patients of these practices are being screened for obstructive sleep apnea, using our vivo score product those at about 50% of those we know we will test positive. So once they test positive we introduce our new partner, which is empower sleep and the physician.
<unk> there we will do a confirmed diagnosis a telemedicine visit as needed and we will write the script for the doctors to then go ahead with treatment. So what we what we're now doing is we're building out this ecosystem, where the patients have the ability from the dsos. The patients can be sourced from the DSO is the.
<unk> will screen and refer to a local VIP office, so that what that does is it eliminates the need for the for the DSO to have to.
B E.
A full on all in got to train a bunch of specialty people in my in my DSO now to handle this program, it's an easy way for the Dsos to do this and so nobody has ever come to the Dsos with a program like this that can really work and one of the things that we have.
Note it in our in our modeling that the DSO, it's really like DSO valuations are driven by EBITDA and so to add 345, 6% to EBITDA is actually more or less the holy Grail of the dental profession, and what our program has the potential to do.
Is to add 345, 6% to EBITDA, obviously, when they go through the recapitalization process and they get they get their valuations the higher their practice level EBITDA the more at a 10 to 12 multi.
Multiple valuation they get for their overall operation. So for the DSO is this is a very compelling set of economics and it's very easy there is no capex vivo drives the program vivo supplies. The rings vivo train their staff is the training can be done over a few a few hours and so it's a very simple.
<unk> entry point for the DSO than later, if the DSO wants to incorporate.
And add their own specialists to capture further economics out of the program then they have the upgrade path to be able to easily do that and so everything is facilitated by the the introduction of our vivo SCOR program into the DSO is that's the way that we get there that's the way we.
Make the program successful and that's the way we whet their appetite with all things Veeva because these doctors will see their patients getting better under this program and the word will spread very quickly.
Alex.
Asked about.
Yes, you also asked about the sales teams as you recall in Q1, we added our second sales team and now we have three fully operational sales teams it.
On the VIP enrollments.
Perfect Alright, I appreciate that just last question just any update on new studies, we should be watching for the Stanford study when that should begin enrolling.
The Stanford study appears to be mired in some some sort of.
Just administrative black hole there at Stamford, we talk to them every week they've had some turnover on their ads.
Administrative staff and we're just waiting we're ready to go everything has been agreed to we're waiting to go to get that started we're hopeful that that's going to happen at any time.
And then yes. There are other studies that are wrapping up and we'll have some announcements.
I don't know when but we will have some announcements around that as soon as we get them ready to publish.
Publish.
Okay, great. Thanks for the update I appreciate it.
Yep.
Yep.
Thank you we'll take our next question from Scott Henry with Roth capital.
Thank you.
Good afternoon.
A couple questions.
First on the vivo score.
Some great percentage gains in the quarter.
Could you tell me about the absolute number of vivo scores put.
Put out in the market was during the quarter and can we think about that at the top of the.
Donal.
A leading indicator and we should track.
And traction thank you.
Yeah, Great question, Scott I would say that.
The impact of vivo score deployment in Q2 was fairly minimal I we.
We did start to receive shipments although some of those shipments were delayed.
There appears to be something of a global shortage of.
Various components for manufacturer and so we were affected by that somewhat in terms of delays of receipt of the.
The equipment. So we had a limited deployment throughout Q2, so I would not put a tremendous amount of emphasis on that in Q2. However, we have fully deployed there.
The latter of the last couple of weeks of the quarter, we were able to get some out the door, we were able to get some position then they started generating a little bit, but where we're really Q3 is where we're starting to see the the more full deployment. Brad do you want to comment on that at all or is that yes. The orders that we placed.
Include about 4000 of the.
Veeva score diagnostic rings, right and so that's really what's out there and we're using those both for sales as well as for our sales and marketing team to use his demo devices as well as with the Dennis.
What we found one of the most effective ways for us to attract the attention of these doctors.
Yeah, Yeah, we give them a demo ring they take the test they see that they have sleep apnea themselves and suddenly we have their full attention.
Okay.
Shifting gears Brad.
Got you.
Youre, adding sales teams yet strong to queue.
We expect sequential revenue growth in Q3, and Q4 in the second half of the year.
Well the range, we believe that the range that we're deploying will help the dentist.
As a tool and serve as a tool for them with their own patients.
The outcome of that and is still yet to be determined but we are seeing a lot of tests come back from from those Dennis ends.
The next step is for them to once they come back and they're tested either negative or positive for OSA. They look at the ones that tested positive and.
Start the vivo system process with them so.
We can't really spur.
Speculate on how many of those will result in increased revenue.
Over quarter at this point yet but.
That's the objective.
We are seeing just to your point, there Scott where we are seeing.
A rather dramatic increase in the number of tests.
And as Brad mentioned, the tests theoretically should lead and based upon the pilot testing that we've done they should lead to an uptick in sales of devices, but we are not you know we're not yet far enough along to be able to give you any sort of an idea for how.
Many of those positive tests will convert into clinical treatment cases. So we're working on that we should have better visibility on that in Q3 and Q4.
Okay.
Thats helpful.
Sure.
The mile correct.
A new revenue driver and you talk about the magnitude of revenues that come in I mean is that a.
$5 million product.
Or could it even be more than that and perhaps a couple of years out just trying to get a sense do you think about that got it.
So the Milo correct therapy, then that this is technically called oral facial mile functional therapy that therapy, we have seen in in some of our through some of our dental offices.
And reports from practitioners, we've seen benefits in terms of.
The duration of treatment being shortened case acceptance and and compliance being higher and also with the quality of the outcomes for these cases being better so theres lots of clinical benefits to the oral facial mile functional therapy. What we are doing now in the in the Institute.
<unk> the vivo <unk> Institute as we have made the oral mile functional therapy, a centerpiece of the training to go along adjunct of Lee with our standard vivo system treatment therapy or treatment.
Curriculum, so what's happening is that the.
The new generation of of graduates lets say from the Institute.
Are all going to be schooled in the idea that with every vivo case they should.
Include the oral my oral facial mile functional therapy.
That has the potential to add about $800 between six and $800 of additional.
Gross revenue.
Margin to our to our already existing margins. So for every case that gets the oral a mile functional therapy, there's literally a box that the dentist checks. So if he's submitting a case that he is ready for to order appliances. There's a box that he checks that says I want oral official.
Therapy oral facial mile functional therapy with this case that box when he checks it automatically.
It adds substantially to our revenue for each case. So as we go forward, we're going to we expect to see a growing number of cases with higher margins for the company because of.
The presence of oral facial mile functional therapy, and so we get lots of benefit we get better clinical outcomes shorter treatment times better case acceptance and compliance. We also get greater margins per case, all of those things work to the benefit of the company the patients and their providers.
Okay, great. Thank you for that color and thank you for taking the questions.
You bet.
Thank you that does conclude today's question and answer session I would like to turn the conference back over to Mr. Huntsman, Chairman and CEO for closing remarks.
Thank you operator.
I would like to thank everyone for participation and for joining us on today's call and for your continued interest in vivo therapeutics, we look forward to our progress with you in the future. Thank you very much and have a great day.
Operator.
Thank you that does conclude today's conference to be JV for your participation.
[music].
Yeah.
Okay.
Okay.