Q2 2022 Biotricity Inc Earnings Call
Please standby we're about to begin.
And my commentary before the opening Bell heard me describe our company in terms of a product timeline and as a journey and our vision.
I'll be echoing those themes throughout today's call only about 50 companies uplift to NASDAQ every year. So that alone is a major achievement.
The positive ramifications for Biocryst city from this event will resonate for years to come.
Our journey to NASDAQ came after hard work, which we built.
Our operation from concept to commercialization no small feat for a small company and what are the most complex diagnostic markets in health care for those of you are new to the space is important to remember that cardiac disease is the number one killer in healthcare in every country in the world and patients at cardiology offices are.
Typically lifelong and duration, we set out to build a complete solution that feel some of the current gaps in cardiac care and we are well on our way to achieve that with the upcoming product releases.
We began with cardiac diagnostics via our <unk> product, we generate the majority of our sales today, but our vision is to follow individuals throughout the cardiac journey.
Understanding where we are at on that journey is central to understanding why we are so excited about our future and I would like to begin by describing our robust product pipeline.
In terms of Biocryst city, and what we started and what our focus was from the beginning we felt that there was a gap in the marketplace and remote patient monitoring where.
Patients are coming into these chronic conditions like cardiac disease.
And they are.
Hello, but more importantly increase the revenue stream for the Doctor and also in our approach creates a revenue stream for Biocryst city, because we are delivering the technology is the technology that service models. So the doctor pays when they utilize the technology as opposed to.
Making zero dollars by outsourcing it.
And so when we take that model and we apply that in the diagnostics. We've got in great adoption and so when you think about your city today, it's no longer a proof of concept story, it's about really an execution. So how do we successfully do what we've been doing successfully up until this time so.
State that in a different way how do we continue to sell and do what we've done in 23 States in 50 states and that is what our.
Next year and next two years is about is about executing and continuing to do successfully what we've already done on top of that is to layer on this idea of vertical growth, which is execute on our product roadmap and followed this patient through that cardiac journey, so, let's dive and contextualize that as well what.
Happens to a patient so patient walks in there complaining of something they go onto diagnostics. That's bowflex once they've been diagnosed they come back to the Doctor and the Doctor does.
Procedural intervention, so pacemaker installed oblations, some sort of intervention procedure or the prescriber therapeutic for the patient to take.
That will.
Deal with their cardiac issues and help control them and now dissipation goes into disease management and so they're in and out of this doctor's office every three months every six months for follow up and checkups and if something is going outside of range. Then they go back to diagnostics. So diagnostics becomes this tool.
That's used once or twice a year on a patient it's not used every month, it's not used on a regular basis.
Once they have been diagnosed.
The majority of the care that is delivered is really around disease management and this is where we've provided.
A portfolio rebuilt the portfolio that.
And cardiac management as an ecosystem.
The total addressable market goes from $1 billion.
To $30 billion and $50 billion. So the idea for us as a company is to create this vertical growth.
Vertical growth strategy through executing of a product portfolio to track these patients through their cardiac journey sold directly into the existing clinics was increasing this total addressable market and so we're very excited about that and that is our plan and so over the next 12 to 18 months, we will have announcements around our execution.
On this product portfolio, we have already talked about.
And do your press release back in September 14th about our upcoming bio Kitten, which we expect is a product launch.
Early next year and that product is a suite of medical devices that connect into our ecosystem that allow tracking of a patient and that.
Tool now becomes a tool that is given to every patient that supplements diagnostics as opposed to.
Tool that they are only on.
Once in a while or once a year, it's a personalised toolkit and all of that is reimbursable. So that is what we are really excited about and I think that over the next year and the next 18 months as investors track. There are two things to look out for right, which is what I talked about earlier this idea of continuing to exit.
Is that kind of deal typically reserved for larger companies already listed on NASDAQ. So we were excited to welcome a new set of investors under such positive circumstances.
I think the one thing that is often overlooked is our dedication to it not just creating but also maintaining shareholder value and you can see that in our share count at this stage in our maturation as a company.
We achieved our uplift without a reverse split and are now on NASDAQ with a very modest 43 million shares outstanding to retain value for our shareholders and we work very hard to maximize our capital resources to squeeze growth out of our operations without unnecessarily accessing the public markets.
We achieved our uplift without a reverse split and are now on NASDAQ with a very modest 43 million shares outstanding to retain value for our shareholders and we work very hard to maximize our capital resources to squeeze growth out of our operations without unnecessarily accessing the public markets.
That is a strategy, we intend to maintain in the future.
Our balance sheet is now at its strongest position in company history, giving us that resources for more than a full year of growth as of quarter end, we had a record cash level of $11 $7 million much stronger position than that less than half a million dollars in cash on hand, we had a year ago.
General as we grow our revenue pipeline, our burn rate as a percentage of revenue shrinks.
<unk> us to stretch their dollars further as we add additional revenue to do this we invest in our professional sales force. This allows us to manage our geographic expansion to create current growth while also being relentless in pursuing a strong R&D pipeline keeping up a strong R&D program to lay the groundwork for future growth.
<unk>.
Every quarter, we talked about the built in growth characteristics of our strategic model. So Q2 2022 highlighted those growth attributes why another strong year over year revenue increase but this quarter also highlighted the resiliency of our model against unusual circumstances, which in Q2 came in the form of both.
Figurative and actual headwinds.
As we had forecast we achieved solid triple digit year over year revenue growth with 181 million in fiscal Q2 2022 revenue versus <unk>.
Just under 750000 in fiscal Q2 2021. This represents a 143% year over year increase a continuation of our uninterrupted streak of triple digit year over year quarterly revenue growth since the inception of our revenue cycle.
Given the circumstances. This was not an easy quarter to maintain triple digit growth Q2 is often a quarter that shows some seasonality as <unk>.
Many cardiologists go on vacation in the summer months, particularly August leading to lower usage rates for our technology and that is typical and expected.
Wasn't expected was the surge in Covid. If you look at the start and finish dates for the quarter, which ran from July one to September 30th.
Coincided with the ryzen peak of the Covid Delta variant almost week for week.
In the U S. The Delta search began around the fourth of July and peaked in mid September showed that.
And that whole disruption felt inside of Q2.
As a result, we experienced temporary COVID-19 shutdowns and a number of southern States, particularly Texas, Arizona, Oklahoma in Florida as cardiologist offices, the FERC some procedures, Fortunately cardiologists and patients who need diagnostic testing and treatment typically deal with clinic closures by deferring those to the weeks that follow.
Clinic reopening such that this is a temporary situation.
And markets recoup that lost volume in the weeks and months of follow up.
When I say headwinds I also mean literal headwinds hurricane hit Louisiana on August 29th right in the middle of our quarter and was bracketed by tropical storms on either side, making this a very busy storm season across our southern and eastern markets, including New England. So COVID-19 was compounded by.
Climate to throw a lot at us in Q2, we still managed to 5% sequential quarterly growth and great year over year growth and most importantly are already returning to our traditionally higher growth rates.
Picture of these charges.
Overall are gona spiked, 119% to $5.7 million compared to 2.6 million and Q2 fiscal 2021 with multiple products in development. We also had elevated R&D expense, which totaled 625 September $26000 50.
5% higher than the 402000 are these spending in the same period last year.
With this combination of elevated cost a total operating expenses rose to 111%.
Rose, 111% $6.3 million compared to $3 million in Q2 fiscal 2021.
The result was the bio touristy incurred a net loss of $10.7 million versus 3 million in the comparable period in fiscal 2021.
However, this include a very large non cash accretion charged your $5.2 million rep.
Representing 1410% that's $4.8 million increase over last year's accretion expense the.
The company also encouraged significant NASDAQ listing fees and related charges that were all one time in nature, but necessary for the upload process.
But in a way that potentially follows them throughout the remaining lifetime to monitor and protect them and ensure they are provided with superior chronic care.
Doing this within a recurring revenue business model is something we believe our investors truly appreciate in value.
At this point I will turn the call over to will cost for his closing comments.
Q too we.
Still were able to do a triple digit growth and we believe that triple digit growth for the company is basically unstoppable at this point and that is focused on just a bowflex product everything else that we talked about on this call is really an add on and will accelerate this approach and this is what we're super excited about over the next 12 to 18 months couple of things.
I would like to highlight despite whether in Covid, we still managed to have a record quarter, where our current trailing revenue is $5 75 million and on track for continued growth.
R Q2 revenue was 1.8 million.
And that represented the 10th consecutive quarter of triple digit year over year growth.
Quarterly revenue increase.
Our ability to grow is not going to be hampered by any shortages or any issues within the market place because we have already addressed that and dealt with that and I think that that is a testament to how well managed to companies. So when you take Ah well capitalized company alongside and execution plan.
And a strategy that is built on.
Ken quarters of showing successful quarter over quarter growth along with.
Spending and a control of burn I think we are well positioned to really over.
Over the next year execute in a way that investors will be very excited.
On top of that.
I would like to talk about some of the things in terms of our future and our plan and how we will take the capital that has come into the company and how we will deploy that so.
Course that capital is primarily designed to expand our footprint and expand on our bio flux diagnostic program and create a presence from going from 23 states.
To a larger footprint, but.
One of the questions that come up.
Is that how much of that capital is going to be used in terms of your product roadmap and your deployment R&D dollars going to increase in one of the things that.
The answers because tell a doc do not have retention they needed stickiness they needed lifelong patient they needed retention rates, what <unk> built an ecosystem of diabetic patients.
That were in disease management that they were.
They are facilitating care management for and so these patients are lifelong patients and so when teladoc acquires.
The longer they get this influx of retention or a.
Our retention rates high retention rates patients that are there and then because they have the telemedicine. They can actually service. These patients remotely and so this is what we are doing for the cardiac landscape and what we see over the next 18 months as we slowly and methodically execute and launch. These other products is that we are already in an ecosystem.
Where you have lifelong patients and patients that need and require.
A number of services for proper care and we are starting the journey with them, but we are not alongside them throughout that entire journey. So as we execute all of that we will we will replicate what <unk> did for diabetes in the cardiac landscape and that's what we are very excited about is it management team that's what I'm very excited about it.
Really bringing that vision to reality and to fruition and I think the other.
And so that is one of the key goals for the next 18 months is really working towards.
Sales acceleration by creating by two things expanding our sales force and deploying the capital that we've raised in our recent equity raise while simultaneously executing on our product portfolio and we have the capital to.
To execute on all of that and we don't foresee any capital needs for.
For at least 12 months in terms of an equity raise for the company.
And so I'm going to pass on that for women in reemphasize that so everything that we are talking about.
Reimbursable existing reimbursable and it's a need that is required not only in our existing ecosystem.
But in hospitals and.
Clinics, all across the country and so what that does is.
Whenever you think about a new product you think about okay. What is the business model what we have.
We're going after areas, where reimbursement exists and what about cost of acquisition, where we've already spent the dollars to acquire our existing customers who were selling into the existing ecosystem. So that cost of acquisition has already been spent so we're actually enhancing the lifetime value of our customers as opposed to incurring new cost of acquisition.
And our existing Salesforce does what they continued to do which is open up new accounts. So our lifetime value goes up our cost of acquisition is the same that it has been so it's not actually creating a new cost of acquisition because that is one thing that investors and and people get concerned about is.
Those two items you are creating a new product is there a new cost of acquisition is a different cost of acquisition.
Because you are going after a new type of customer in in this case, it's our existing customers. So no and to what is the business model is there is there a reimbursement is there a difference and against something that we have so so we have a singular goal.
Which is to drive better care for doctors and patients that use our technology every day, we're on the cusp of rapidly changing from a single solution company to having a portfolio of solutions followed by our evolution into digital healthcare ecosystem provider. We have already begun this journey by developing solutions that connect our doctors and Chuck telehealth platform to eventually.
Create the largest virtual cardiac clinic and what I mean by that is that we have one ecosystem.
And then we'll take our first question.
Oh Hello, This is Alan clay for Maxim congratulations on the quarter.
One the chronic care business that you're rolling out to talk a little about how you think about what this opportunity is to yourself over time and and and there's other companies that are that are pursuing chronic care. So [noise]. So why do you win and then second.
One bio tray, which the F D. A is reviewing now.
Could you maybe if there's any update on that thank you.
Somebody else and how do we work in.
In comparison to some of the other people who are doing chronic care. So.
Chronic care in cardiac really does not exist. Its you know longer dated in diabetes in cardiac there really is no provider and so what you have is you have a bunch of people that are trying to.
Collect a number of off the shelf devices integrate them into some sort of software and get them into a into a cardiologist office.
The bio flux, which is which is a key product inside of the clinic is the entry point and there's very few players in real time high end diagnostics and I bring this up because the two are really tied so if you go to a cardiology clinic or a hospital or a multi care group you've got these nurses and these doctors logging into multiple systems.
About this new concept you are brought to bear on the concept of ecosystem.
And I was wondering if you could give us.
Some perspective on you mentioned that it is something.
That can also attract new patients to the doctors and it's sounding a little bit more like a.
A doximity type of ecosystem with the doctors up in the cloud and with telemedicine and and exposing these doctors to new patients.
Yeah, well you did a pretty clean job in.
Pairing yourself to the Nevado and diabetes versus cardiac.
Did you do something just to give us a flavor for this new concept of ecosystem and maybe compare it to some of the peers out there that you see and how you're different.
Gotcha.
So I talked a little bit about you know why teladoc acquired Labonte right because it is about retention rate and <unk>.
Doximity and these guys. So so most of the telemedicine is out there she talked to Doximity doctor on demand and so on and so forth. These telemedicine providers are really dealing with urgent care one off visits right. So you know a young family. They are a key that has a fever you have a rash.
Skinny issue or something like that and you ended up doing a video call and you have a one off visit.
We are going to eventually come there and then b, we can invite them into that ecosystem and what I mean by that is we can say hey, youre looking for a cardiologist why don't you come to one of these five cardiologists that are within our within range of where where you live and we want to do that why because eight it's it's a.
It gets them into a proactive into our ecosystem, where we know that if they go to a cardiologist who is using our product diagnostics is going to be down in the bowflex. If they get diagnosed we know that they're going to go into chronic care and if there is kind of care. Then we know that they are in the ecosystem and they will continue now that again makes it even stickier in terms of our really.
<unk> shipped with the cardiologists and so that's where I see that in 18 months youre going to see a big transformation at Biocryst that there's a huge opportunity and right now we aren't even really focused on bringing people from the outside into the ecosystem because we're busy building the ecosystem. So I would say you know and I talked about this before and I talked about this when we did R. R.
NASA listing is that I see the company going through two transformations. The first transformation is the one that's going to happen over the next 12 to 18 months, which is all about growth expansion of the product portfolio and the development of the ecosystem and then after that it's going to be okay. Well. We've got all of this ecosystem how do we bring people who we know are going to end up at a cardiology.
Just somewhere but into our ecosystem of cardiac cardiologists does that makes sense.
Absolutely got it sounds like kind of a.
Potential linear growth pattern today, an acceleration of that with more growth focus of growth capital, but this second phase I was a little bit or kind of exponential in terms of a little bit more not traditional salesforce door by door, but more a broad based marketing to so that kind of a BTC basis.
Yeah.
That's exactly right and we understand cost of acquisitions, we've done experiments. So a lot of these things that we're talking about you know we we've we really studied all of the stuff you know I talked about earlier in the call where I said.
People.
Our sing Okay Youre talking about all of this stuff is this whiteboard concepts. No. These are all developed ideas developed it took on so when we are talking about these things, it's because we've actually analyzed.
<unk> done some homework on it we studied it we understand how to bring users into what are users doing how are they looking for cardiologists. What is the pattern. We study that and that's where we align everything that we're building.
Got it excellent and then just one quick follow up on that.
Could you just comment briefly on the capital.
The capital strategy going forward.
In terms of additional capital or additional leverage and things like that.
Yeah, absolutely so as I sort of talked about earlier in the call you know.
We have the strongest balance sheet than we've ever had we did have a very good financing, where you know what I talked about how well demand management team manages burn.
And and focuses on growth and so we have the capital that we need to execute on our strategy over the next year year and a half.
And expand on our sales force, we've already started deploying that capital and so for the foreseeable future. We have no intent on raising any kind of equity dollars and we have no interest in.
Interesting in.
Doing anything that's going to be dilutive to the company and our focus is really taking the capital that we have brought in deploying it.
Expanding our growing.
Growing from here and and and showing that growth and then from there you know.
When when when we have seen the fruits of that execution and we've created value for the company. We will go through our future growth cycle.
Beyond beyond that timeline. So you know in the short term and in the foreseeable future no no change on the capital strategy No plan on raising any capital we are very happy with where we are and we're very excited about our you know our plans over the next 12 to 18 months.
And any concept of leveraging the balance sheet or death.
So you know we we may we may look at those concepts I mean like I said, you know when when people are thinking about our capitalization strategy and how to deploy capital. We have a strong balance sheet. We don't want to put anything that kind of messes up that balance sheet or messes up with equity if there are opportunities.
As to you know.
To supplement our capital strategy, our equity capital strategy with something that you know like inventory financing and things like that which allows us to free up capital that we use for inventory without messing with our with our equity or anything related to dilution. Then of course, we would explore those but you know as I said we.
We are we are very happy with where we are at we will of course always look to stretch the dollar and if we can free up some capital you know like I said in this particular content like inventory financing, where it's not touching a dilution it's not touching it's not equity linked whatsoever and very traditional old plain. Vanilla then, yes, we would do that because then we can take that.
And then redeploy towards further sales expansion.
Got it thank you very much.
Moving on to our next caller.
Okay.
Hi, This is spenser kirschman and for Kevin Dede with H C. Wainwright.
Congrats on a good quarter, given all the headwinds that we face.
Was just curious on your growth plans for the future in terms of your sales force right now the head count and then any any kind of color you can provide.
On plants actually expand past the 2030 current states.
Yeah, absolutely. So we we actually don't really talk about our sales force size I'm, just because you know that it's a dynamic thing and it's something.
Something that we don't disclose but what I will say is we've already started expanding so the moment at the moment. We finished our capital raise we immediately started and we've been hiring over the last little while in terms of expansion from 23 states.
So the idea of course, you know our dream and our focus is to get to 50 states, but we are not chasing states. We are we're more interested in talent and and what I mean by that is you know you may find the stake that you really want to be in but if you can't find the right type of talent you can't find an a plus talent then I'm not going to go into <unk>.
Higher be talent, just because I want to have that state because you know there are many states, where we can put in multiple reps. You know for example, the New York Metropolitan area. We have two reps there, but you know we could put five reps are in in that in that area and it still may not be enough rate versus going in and see.
Hey, I really want to be in Washington State, So I'm not going to I'm going to I'm going to force myself, because I want that 50 state a 50 seat geography I mean, so the plan is for sure and get in and expand that footprint as wide as possible, but with a focus on talent.
Yeah.
Thank you there are no further questions at this time gentlemen will turn the conference back over to you for any additional or closing remarks.
Thank you. So I wanted to thank everybody that joined us on the call today and to summarize we are very excited over the next 18 months about what's going to come and in this transformation that we're having as a company are by Christie.
And I want to leave you guys with a few very important thoughts if I had to summarize everything in this call and everything that we spoke about.
One is.
We are capitalized way better than we ever have had been in the future in the past.
And that positions us to execute on our plan and I think for investors institutional open market investors that came into the deal.
You really need a company to be capitalized in order to track them and make sure that they can execute on on what they are saying that they can do and so we have that capital and we also have a track record of knowing how to successfully expand and apply our business model and I don't mean to oversimplify that but we have a product that works.
It's it's used by 1500 cardiologists over 23 states. So now the question is how do we continue to do that successfully across 50 states and that is by continuing to do what we have done and deploying the capital that we brought in are effectively as we have shown that we can do and then the third piece, which we've talked a lot about is real.
Really this implementation of our product portfolio, because that's a layered on growth strategy everything we talk about triple digit growth like you know this year next year and the year. After this is based on just the bio flux, so everything else, who you're talking about is.
A complementary but it's an enhancement on our growth plans it'll it'll accelerate our growth and it's not a concept. It's already been developed so every quarter over the next 12 to 18 months, you will see us working towards and executing that strategy and so from an investment perspective investors have really two things to watch out for you know taking capital and how we're deploying that cash.
Capital and executing and growing on our base business and B, how we are bringing this ecosystem alive and implementing that and selling into the existing accounts and why that is so important is because that second part if all we did was continue.
To do what we've done over the last two years and.
And execute that product portfolio.
We will do fantastic and investors will do fantastic from a growth trajectory perspective, because the captivated audience and the customer base that we already have it's already there it exists and we're selling into it. So we've already you know I talked about earlier, we've incurred that cost of acquisition. So now we're increasing the lifetime value of those of those customers.
<unk> by selling into those accounts. So those are the closing remarks that I that I wanted to leave everybody with and I think that it's important.
Because when investors think about a company. It's always about do you have the capital to execute do you have a strategy that has proven itself. Yes. We do do you have a way to enhance it and we've got a product portfolio and then how are you going to launch that product portfolio and do you have a business model for them and as we've said before and we said on multiple calls everything that we do at Biocryst D.
It's a recurring revenue model in the health care space.
Aligned with reimbursement, we do not put something out into the market and we do not look at something from a product perspective that doesn't line up with reimbursement and with physician economics.
With that I want to thank everybody. We are super excited we're so glad that you joined US today, we're so glad that you've taken an interest in our story, we hope to continue to Wow, you over the quarters to come.
Thank you Sir that does conclude today's conference. We thank you for your participation you may now disconnect.
Okay.