Q1 2022 Asensus Surgical Inc Earnings Call
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As a reminder, this conference is being recorded now I'd like to turn the conference over to your host Mark Klausner from Westlake partners.
Sir Please go ahead.
Good afternoon, everyone and thank you for joining us for the census, surgical first quarter 2022 business and financial update conference call.
On the call with me today are Anthony Fernando President and Chief Executive Officer, and Chemise ran per cab Chief Financial Officer.
Before we begin I would like to caution listeners that certain information discussed by management. During this conference call, including any guidance provided are forward looking statements covered under the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Actual results could differ materially from those stated or implied by our forward looking statements due to risks and uncertainties associated with the company's business, including any impact from the COVID-19 pandemic and other geopolitical factors beyond our control.
The company undertakes no obligation to update the information provided on this call.
For a discussion of risks and uncertainties associated with the census, surgical business I encourage you to review the company's filings with the Securities and Exchange Commission, including the 2021 and Form 10-K filed in February 2022 and the Form 10-Q expected to be filed later today and any other filings we make with.
C C.
During this call. We will also present certain non-GAAP financial information related to adjusted net loss attributable to common stockholders and the adjusted net loss per common share attributable to common stockholders management believes that these non-GAAP financial measures taken in conjunction with U S GAAP financial measure.
Yours provide useful information for both management and investors by excluding certain noncash and other expenses that are not indicative of the company's core operating results.
Management uses non-GAAP measures to compare our performance relative to forecast and strategic plans.
<unk>, our performance externally against competitors and for certain compensation decisions.
Reconciliations from U S. GAAP to non-GAAP results are presented in the tables accompanying our earnings release, which can be found in the Investor Relations section of our website.
It is now my pleasure to turn the call over to our census, Surgical's, President and Chief Executive Officer, Anthony Fernando Thanks, Bob and thank you all for joining US today on today's call I will provide an overview of our recent accomplishments and then SME is to review our financial performance.
Which I will discuss our performance during the first quarter as well as our priorities for the rest of 2022 before turning to Q&A.
Before turning the call over to me, so I would like to provide an overview of our recent performance.
Despite headwinds associated with all we'd spike early in the first quarter as well as the ongoing political instability in eastern Europe , We drove strong procedure volumes as a result of the continued increase in system utilization globally.
Total case volumes, increasing 29% year over year, and 16% sequentially over the fourth quarter.
While we are disappointed by the slowdown in newest enhance program initiation, we have experienced that fly Fi yet.
In large part due to the macro factors that I mentioned.
During the quarter, we continued to leverage events aimed at driving awareness and growing our pipeline.
Video customers.
During the first quarter, we attended multiple highly impactful industry events, including the society of American gastrointestinal and endoscopic surgeons all stages in much in Denver, Colorado.
And the German Surgeons Congress also known as D C K in Leipzig, Germany.
Yep.
Feedback at both events with extremely encouraging is both surgeons and hospital administrators are highly engaged with Santander and visa in Oklahoma the guided surgery.
As we continue to focus on the development of Syn heads and components ophthalmic guided surgery. During the first quarter, we announced the expansion of our digital solutions R&D Center in Yokneam Israel.
Since the opening the center as part of our acquisition of MST. In 2018, we have continued to put together an incredibly talented and growing team of engineers developers and scientists who are working together to bring innovative augmented intelligence capabilities to the platform.
And we look forward to updating you on our progress in the clock is ticking up.
With that I will turn the call over does that mean for our financial update thanks.
Thanks, Anthony turning to the first quarter for the three months ended March 31, 2022, the company reported revenue of $1.1 million as compared to revenue of $2 $1 million in the three months ended March 31 2021.
Revenue in the first quarter of 2022 included zero point $4 million in Bd's revenues zero point $4 million in instruments, and accessories and zero point $3 million in services.
The three months ended March 31, 2022, total operating expenses were $18 $2 million as compared to $14 $4 million in the three months ended March 31 2021.
For the three months ended March 31, 2022, net loss attributable to common stockholders was $19 $1 million or eight cents per share as compared to net loss attributable to common stockholders of <unk>.
$17.3 million or <unk> <unk> per share in the three months ended March 31, 2020 a month.
For the three months ended March 31, 2020 to the adjusted net loss attributable to common stockholders was $16 $6 million or seven cents per share as compared to an adjusted net loss of $12 $2 million or six cents per share in the three months ended March 31, 2021.
Adjusted net loss as GAAP net loss adjusted for the following items.
Amortization of intangible assets change in fair value of contingent consideration.
And the fair value of warrant liabilities, all of which are noncash charges.
Net loss attributable to common stockholders is a non-GAAP financial measure a reconciliation from GAAP to non-GAAP measures can be found in our earnings release.
Turning to the balance sheet. The company had cash cash equivalents short term and long term investments, excluding restricted cash of approximately $118 $5 million and working capital of $110 million as of March 31 2022.
I would now like to turn the call back over to Anthony.
Thanks Elyse.
I would now like to provide an update on recent performance as well as the progress we have made on the key focus areas for 2020 two.
A reminder, those are.
But the continued market development up to San has system and second the ongoing development of our product portfolio and continuing the technological advancement of Syn <unk>.
Starting with market development.
One of our key focus area is raising awareness of the fantastic stuff and the health economic benefits of digital laparoscopy, we continue to seek out publication that provide relevant data to support increased adoption.
During the year, we would continue to look to publish additional peer reviewed papers that focus on the clinical economic and workflow benefits of digital laparoscopy.
Head that's come back to traditional laparoscopy and also showcase how digital technologies and real time clinical intelligence can be helpful to surgeons and patients.
During the quarter, we had full papers published which further demonstrate the safety and feasibility of sand has across gynecology urology and colorectal procedures.
In addition to focusing on expanding our list of clinical publication.
<unk> continued to leverage our growing body of real world clinical data through the utilization of our clinical case registry that'd be referred to as trust.
We believe that trust is the largest robotic assisted laparoscopic registry in the industry with more than 1700 patients enrolled as of the end of the first quarter.
The registry includes a variety of procedural specialties, including Domino thoracic Urologic and gynecological procedures performed at select sites across Europe .
The primary purpose of the registry to collect safety and efficacy data from procedures performed using centers.
Well as build a unique collection of incorporating and 12 month postoperative follow up data.
We expect to continue to grow this body of clinical data to facilitate an increased number of high quality clinical publication.
Illustrating the value of spend hence and performance guided surgery and support our commercial adoption strategy.
These publications and the trust registry are incredibly important in order to provide data that supports and validates the benefits of San head and the continued technological development of the platform.
The next segment of our market development efforts is the expansion of our global footprint, including the growth of our installed base the acceleration of procedure volumes and the increase in the number of foundational sites.
Beginning with new program initiation the fed.
Last quarter was very challenging given the macro headwinds associated with Covid in particular, the resulting reduction in hospital access across all of our key geographies during January and February .
These challenges were compounded by the ongoing unanticipated political instability impacting Russia and eastern Europe .
Which has negatively impacted us and I'll commercialization partners ability to access hospitals and grow our installed base in that part of the world.
A portion of our commercial pipeline for 2020, two had ties to Russia and the C. I S region actually had recently secured the necessary regulatory approvals to commercialize in Russia and had book over a period of yet with our distribution partner in that region.
Given the political climate, we believe it is unlikely those.
All of this will come but anytime soon.
As a result, we have shifted our commercial organization's focus to other areas within the EMEA region, including countries invest in Europe to help further strengthen our pipeline.
Yeah.
While we are disappointed with the slower than expected start in 'twenty 'twenty. Two we continue to build a global pipeline of hospitals and surgeons and we continue to expect to have 10 to 12, New program initiation by the end of the year.
Now turning to procedure volume.
Despite the backdrop of an unstable macro environment, we drove very strong volume trends performing over 650 procedures, our highest quarter to date.
Total procedure volumes increased 29% compared to the prior year and 16% compared to the fourth quarter of 2021.
Representing the third consecutive quarter of growth, primarily driven by volumes in E. M E, which grew 43% compared to the prior year as well as low single digit growth in both U S and Asia.
It's about both heavily impacted by Covid spiked early in the year.
This quarter, we were pleased to see significant milestone accomplishments from surgeons in Europe , and the United States.
Dr. Larry monetize some 11, Keith and his team at <unk> University Hospital in Lithuania performed 100 colorectal surgery Dr.
Dr. James Friedman at Southern Surgical hospital in Louisiana reached their hundred Sandhurst case ended up that drove Eddie and the team at Hackensack Meridian Health Pascal Valley Medical Center in New Jersey.
That 300 procedure with the same kind of system.
I would like to take a minute to help you understand why we are.
So focused on increasing procedure volume in a wide variety of surgical specialties.
When a case is performed with ascend had system, we have the ability to collect system data and surgical video.
Over time as we accumulate this rich digital library of surgical data, we will have the ability to generate powerful clinical insights that will enable bahamas guided surgery.
Surgeon to reduce surgical variability and drive consistently superior surgical outcomes.
We are also focused on increasing awareness of sand has and educate the surgical community on the benefits by leveraging industry events we.
We had a strong start to the yet on this objective.
This quarter, we attended the annual sages meeting, where we received very positive responses and audience engagement from surgeons and patients.
Dr. Amit Trivedi effect on secondary again helped basketball League hospital discuss the clinical utility of Santana system and augmented intelligence in the operating room.
Dr Francisco be alcohol of Mount Sinai Hospital in Chicago and Dr. Michael Cook off unless you have the New Orleans, both emphasize the advantage of being able to transition from laparoscopy to the center has system Affectless fleet due to the sand has systems deliberate beside and replicate that.
Coffee methods, a unique advantage over alternative robotic solutions.
We also attended the D C Congress that was held in Germany.
N has surgeons Dr. Orloff Hensen, Dr. Florian should show ended up the deep loss Stefan also highlighted the clinical value of our digital laparoscopy system.
And importance of innovative technology in all honesty, it's upside.
Turning to the expansion of our product portfolio.
Excited to build upon our accomplishments and reach additional regulatory milestones between further develop the same system.
And broaden its applicability.
We continue to expect commercial launch a five millimeter articulating instruments in the second half of the year, which is currently in a pilot launch in the U S and Europe .
We also expect to submit a five 10-K application for pediatric clearance in the U S. Following strong early clinical utilization in Europe , and increasing demand from U S surgeons.
This will broaden the applicability of the same has system's unique combination of three millimeter instrumentation with five millimeter camera scope combined with haptic feedback to benefit more patients that digital laparoscopic option in pediatrics and minimally invasive surgical solutions.
More broadly we continue to expand the utilization and applicability of the intelligent surgical unit or I S. U globally, and we expect to receive CE Mark approval for expanded machine recent capabilities in Europe in late 'twenty or 'twenty two.
While the macro landscape has continued to present unique challenges we've made good progress towards our 2022 goals such as the ongoing growth in San has utilization.
Element of high quality clinical data and the progression of our innovative product portfolio.
We believe we are very well positioned to continue to execute on our strategy and drive the long term adoption of scent.
Before I open the line for Q&A I'd like to express gratitude to all of our employees throughout the world for their tireless efforts and dedication.
I would like to open the line for questions.
Okay.
Thank you very much.
At this time, we will be conducting a question and answer session.
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One moment please poll for questions.
We have our first question from the line of sway them for Qunar drama content with H C. Wainwright. Please go ahead.
Thank you. This is RK from H C Wainwright could have turned on and coming and chemise.
Hmm.
Secondly on the on the volume front.
Great quarter as you said.
You know you.
The first quarter, where you have.
A huge increase in the procedures.
I.
Thinking of thinking through that number.
It also seems that you know the most of the procedures like came.
From EMEA.
Having said that what you said regarding the macro situation and.
Going forward do you think.
You know that that situation could impact.
The growth in procedures in the European region.
And then obviously, we have all kinds of other things going on including corporate.
Shutting down.
Okay.
Some other places around the world, but Ah just just on the macro.
And Frank what do you think.
Yeah.
Okay.
Question.
The European front I think we are seeing some of the the COVID-19 related issues that are transpired in the early part of the January February time frame, it's definitely settling down and we're seeing a good procedure traction.
So I don't think even at a macro level looking at the U S N anywhere in Asia.
Feeling pretty good that the.
Covid impact is continuing to reduce at least the way that we see now.
We are hoping to have a.
Greater impact than we had earlier in the from the Covid front.
But on the.
The eastern European political front that.
That is a challenge.
So that but but again from a system point of view.
You do have Oh, the largest installed base in the European region, and and there mostly in Western Europe .
So we are not anticipating any.
Big impact in terms of volume because of all the hospitals off the continuing to perform.
With some hospitals in the eastern European region at that time.
Slow down, but he he even you know.
In a global sense, we're not anticipating it to impact us negatively.
And we hope to continue the the growth trend that we've been looking for.
Perfect.
On the.
Revenue front.
Yes.
It did not got cheaper as as much upfront revenue base.
Seen in the first quarter of 'twenty one.
Colored that was I think at least one commercial now maybe you're on two conversions during that.
Time period, and the first in 'twenty one.
Now that you have some of these machines out there on the on the leasing front for awhile.
Hum.
I'm not asking for a specific number but I'm just trying to understand is this.
Certain a person's age of missions that potentially could get to the stage, where they could convert over the next three to six months.
Okay.
Yeah, Ken I think trying to nail down a number of what's going to come but it's a bit difficult.
Because they're all you know it.
Situational different hospitals have different criteria.
And theyre trying to make a decision to cut them, but but the only thing that I'd say is that you know it is part of our strategy and be actively.
Speaking with these hospitals.
To find the right time to make that.
Conversion, but I Couldnt give you a percentage are to say that this percentage is going to convert other than saying that it is our intent and that's what we are continuing to pursue.
Okay.
Last question from me on the clinical registry that you called trust them.
So that the information that you collect the data that you collect them as I said it is digital it is rich.
Have the complete data you know starting from the procedure to the to the cause.
Hey man to the metrics of.
How they are system operates.
Yes.
Is that database can you use it.
Regulatory filings are.
Or is it only for publications and commercial.
Are things where you can.
Sure Fox potential customers you know what these machines can do.
Yeah, Great question, Okay. It can be used for regulatory and our customer.
Related.
That is for about a week maybe these are.
It's a C are opened.
The mechanics of.
That we put data into so it is to manage the database and we can use it for.
Any any purpose that we.
I'm going to use the data.
Okay.
Thank you for taking my questions.
Thank you okay.
Thank you ladies and gentlemen, we have reached the end of the question and answer session and I'd like to turn the call background, Sydney, Fernando President and CEO for closing remarks, how about yourself.
Thank you again for your interest in our census, surgical and we look forward to updating you on our progress on our next quarterly call. Thank you.
Thank you ladies and gentlemen. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.
Yeah.
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