Q2 2023 Biotricity Inc Earnings Call
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Good day and welcome to Bioterror cities fiscal second quarter 2023 financial results Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Valter Pinto managing director Casey S. A strategic communications. Please go ahead.
Good afternoon, everyone and welcome to Biocryst today's fiscal second quarter 2023 earnings Conference call. As a reminder, biocryst cities fiscal second quarter ended on September 32022. So all figures presented for this period will reflect that end date.
Today, we issued our fiscal second quarter 2023 financial results press release, a copy of this press release is available on the Investor Relations section of our website and the full financials will be filed with the SEC on Form 10-K and posted on Edgar.
Before beginning our formal remarks I'd like to remind listeners that today's discussion may contain forward looking statements.
Management's current views with respect to future events, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward looking statements by electricity does not undertake to update any forward looking statements, except as required and.
I'd now like to turn the call over to Biocryst is founder and CEO Dr. Mccarthy.
Please go ahead.
Thank you Walter and thank you everyone for joining today welcome to our fiscal second quarter 2023 earnings conference call. During the second quarter, we continued to advance our product development and commercialization strategy in order to position our company as the all in one go to solution for cardiac diagnostics and disease management.
Our leading revenue driver in the second quarter continued to be biotechs are high precision single unit mobile cardiac telemetry device that provides real time monitoring and transmission of the patients ambulatory ECG diagnostics.
We continue to grow our dataset, which is comprised of billions of patients heartbeats, allowing us to further develop our predictive capabilities relative to ensure fibrillation and other arrhythmias.
Revenues earned with respect to this device are comprised of device sales and technology fee revenue or technology the service revenue.
For the three months and six months ending September 32022, a combined device sales and technology fee income totaling $2 4 million and $4 4 million represented an increase of 32% and 24% compared to the corresponding period you had prior showcasing our year over year growth in validating our recent strategic initiatives.
Our business model continues to focus on providing our unique technology to a growing pool of physicians hospital networks and patients are.
Potential market continues to grow in parallel with that risk population with a global current market for Afib, you expected to reach $26 billion by 2027.
According to American research.
In October we launched our biochem cardiac disease management solution.
This rollout follows two successful pilot programs that brought our technology into two facilities that provide care to over 60000 patients combined.
Okay cardiac is designed to expand upon by proceeds existing remote monitoring tools that are used by today.
By over 2000 physicians nationwide.
This easy to use solution, but the actual data at this stage.
Fingertips to assist them in making treatment decisions quickly.
Baca cardiac combines chronic care management remote patient monitoring cardiac diagnostics lifestyle management, bidirectional communication and telemedicine to help engage and manage patients better.
With leading doctors in the cardiology space to more efficiently address the unmet need for their patients and we intend to continue our rollout of bio care in the upcoming quarters.
This quarter, we have identified key drivers towards our path to profitability in the next 18 months, including new distribution partnerships with leading distribution networks, our new partnerships not only build out our ecosystem with leading physicians in this space, but also provide expanded access to a large network of sales representatives.
Earlier this month, we executed an agreement with one of these major distribution networks, and we intend to pursue relationships with other major distribution networks in the coming months.
Earlier in 2022, we also launched <unk> cardiac monitor now directly available to consumers just device leverages, our continuous monitoring technology, allowing patients to manage their lifestyle with long term data on the art activity.
It changes the landscape of personal heart monitoring in just one times debt conventions in 2022.
We are thrilled to continue building on our previous product offerings, and new distribution networks and look forward to continued growth in the future.
Additionally in September we were awarded an NIH grant from the National Heart Blood and lung Institute for AI enabled real time monitoring and predictive analytics for stroke due to chronic kidney failure.
It is a significant achievement that broadens our technology platform.
Does he stays demographic.
<unk> will focus on our bio flux AI and innovative system for real time monitoring and predictions stroke episodes and see TD patients.
Cardiac diseases, often chronic and impacts of quality of life of individuals in many ways and it continues to grow as a leading cause of mortality globally. We expect by Christie's differentiated approach to raise the standard of care and build a lasting relationship that carries the patient through the entire lifecycle.
We look forward to our future growth in our effort to alleviate key issues involved with current cardiac care today.
I would now like to turn the call over to our CFO John <unk>.
Thank you across during the three months ended September 32022, the company earned revenues of $2 $4 million.
Rents of 32% increase from the corresponding quarter of fiscal 2021.
Gross profit for the second quarter totaled $1 3 million, yielding a gross profit margin of 54%. Despite certain increased cost of salaries, including freight charges, we expect margins to improve and the cost of the bikes are sold to become lower as a percentage of revenues as business sales volumes expand.
Cellular and other costs associated with technology piece will continue to decrease on a marginal basis as our business scales, but tightening of this margin to 54% was the result of special promotions. This summer intended to accelerate device sales and build a strong base of our recording technology fee revenues, we expect gross margins to improve.
Prove to about 60% over time.
During the second quarter biodiversity and pretty net loss of $4 9 million as well as a comprehensive loss of approximately $4 4 million compared to 11 million in the comparative quarter of fiscal 2021. This resulted in a net loss per common share of $9.04 per share for the period.
Total operating expenses were $5 7 million compared to $6 $3 million for the corresponding second quarter of the prior year.
General and admin expenses for the period were $4 $9 million compared to $5 $7 million for the corresponding prior year period.
The decrease in G&A expenses was a result of the company's continued efforts to achieve capital efficiency as part of its path to profitability. During the second quarter, we incurred research and development expenses of $8 million compared to $6 million for the corresponding quarter in the prior year.
The increase in research and development activity is directly related to the development of new technologies for our ecosystem as well as the development of continuous improvement.
Product enhancements to existing products.
Christie ended the fiscal quarter with $2 $5 million in cash.
We remain focused and more confident than ever in our fundamental business strategy to innovate commercialized capture share of a fast expanding marketplace and grow revenues.
We expect to continue disrupting the growing cardiac care marketplace with our platform and technology I would now like to turn the call back over double cost for his closing comments. Thank you.
Thanks, Sean and thank you again for everyone, who has joined our call today, we made significant strides in terms of product and distribution network expansion. Our overall strategy remains to bring seamless remote cardiac monitoring solutions to patients throughout their entire lifetime integrating our diagnostic devices and telemedicine for superior chronic care, we are excited for what.
Fiscal year, 2023, and 2024, having store for our company and shareholders I would now like to open up the call for questions.
Yeah.
Yeah, if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again press star one to ask a question.
We will take our first question from Frank <unk> with Lake Street Capital markets. Please go ahead.
Great Hey, Thanks for taking my questions, maybe just to start maybe a little more color on the distribution network development in the quarter would be great to understand how that came to be kind of what youre thinking about growth expectations and then any margin implications, we should be considering as this scales.
Great question, Frank So as I had indicated and I think the last quarter's call and talking about our strategy for 2022 about building out the distribution relationships and we are successfully seeing that.
We are not publicly disclosing the details of those of Europe . When you plan on disclosing those in.
In the coming weeks and months, so you'll get more color on exactly what we expect and the implications as we announced at <unk>.
Okay. That's helpful and then maybe to pivot over to the.
The cardiac disease management and pilot programs I think it was a press release on the tape a couple months ago, maybe bring us into the Oklahoma on Kentucky.
Pilot programs, how those went how did patients leveraged the whole portfolio and then how should we be thinking about that ecosystem on a go forward basis.
Absolutely so.
Those pilots were really focused on three key components for US right. One was we wanted to make sure patient engagement patient usability technology are there any improvements in workflow from patient adoption and engagement perspective.
And we learned a lot and we improve things and added features and particularly certain features that we thought were very helpful. But we're not as is always the case when you do a pilot.
Pilot that was successful in optimizing that.
We can now scale that and hence the announcement for full scale launch. The second piece you were evaluating with the same kind of concept, but now nursing that provider perspective.
Work flows are the workflows working how do we optimize time, how do we make sure that it's seamless within there.
Clinic practice and it doesn't disrupt their their environment.
And again same kind of thing we learned.
A lot and we.
We figured out where to streamline and we're going to improve and where to add features and that was also successful and we saw great adoption.
From the nurses and I didn't.
Understanding of how the whole system works together seamlessly fits in with the rest of our product portfolio and then the last piece you were looking at was reimbursement and any.
Details around reimbursement and ensuring that you know reimbursement across the providers. How information is presented as part of the reimbursement lifecycle. How information is presented and verification of all of that because we were successful on all those three aspects.
We moved the product and added features and now it is ready for commercial launch and it's going to be.
Going to full rollout at Seabee health in Kentucky, as well as a few other of our key sites and then.
And after that it'll be pushed through our entire ecosystem.
Got it that's great color and then maybe last one for me I appreciate the comments on our pathway to breakeven in 18 months, maybe speak to some of the inputs required. There is it a cost cutting initiative that needs to happen more robust growth, maybe just give us a little bit more color into how to bridge to profitability and it would be helpful.
If you could address the balance sheet as well and the same.
Question. Thanks.
Sure. So in terms of our path to profitability I think that you know as we see the technology landscape today in the biotech landscape. You know people are laying off people are not able to grow anymore.
And generally the.
The environment is not as positive I think that Biocryst. Fortunately, we're in a very positive position were very much in the opposite direction in terms of we are still growing.
And in fact, where we've got these new products that will cause they vacate and enhance that growth we're expanding in hiring for key positions.
Where.
Reducing our expenses and cautious.
For John's comments, so could.
It could be in a position where we're growing we're expanding in hiring.
Reducing costs.
The three together is what's going to get us to that path in terms of our balance sheet and how we are looking at that I think.
You know the company has shown itself.
Prudent users of cash we're very prudent in how we deploy cash in and.
Deploy it in a way that facilitates growth, but does not overspending that is still going to be our path forward.
We will act access capital Opportunistically as it makes sense for the business as it relates to direct drive growth.
Okay. That's helpful. I'll stop there thanks for taking my questions and congrats on all the progress.
Thank you.
Mark.
We will take our next question from Kevin Dede with H C. Wainwright. Please go ahead.
Hello. Thank you for taking my question. This is actually Michael Donovan, calling in for Kevin BD.
First question, how close bio flex AI upgrades the implemented with current bio flux versions.
Sorry, you broke up there Michael you were saying something about Biopharma AI upgrades being implemented in.
Firefox is that yes.
Yeah exactly so.
A bit about bio flux AI.
Now how are the AI upgrades gonna be implemented with with your current bio flux.
Platform together.
So we have a couple of different ways of implementing our AI and our on and off.
Our AI works on two key components right. So on the device itself those algorithms, we don't really touch because there maybe you just don't have the processing power Andres you were really talking about the cloud and in the cloud we're looking at two things right.
How do we show the most meaningful data at.
At the front right so clean out the data that is not relevant or it's not actionable.
And then the other piece is to make the workflow and the automation are at from a from an operational perspective more efficient right so creating the data summaries.
No way that is faster so that you can scale up your ability as you get more and more devices in more and more data coming in how do you get them a more accurate.
And how do you get a more automated so we're looking at AI in terms of an operational exercise for the bio flux in terms of the ecosystem of managing that data stream and how to presented and then the other thing is the accuracy of it. So we're implementing it in both those areas and that essentially leads to our ability to grow.
ROE and handle more patient data and more clear.
Our clinics and physicians without having to scale up as much on the operational side.
Okay that makes sense and.
Oh for Bio Trust now that you have more data with <unk>, how are physicians responding to the three channel patch versus wanted to lit lead patch Walters and assess future translating to sales as you would expect.
Absolutely on a on the sales side, we are seeing that that uptake in sales and we are very happy with the launch that has happened so far in terms of the three channel.
And then how the physicians are receiving that goodbye.
Three areas. So we did a head to head comparison, we've taken the device we've had vascular surgeons use at heart surgeons, EPS cardiologists and interventional cardiologist each of them has a slightly different opinion on what is most valuable for them.
First and foremost because it's a connected device theyre able to get the data summary, within three days, which is a huge change from waiting two weeks, that's a big deal for anybody who's in interventional list or on the surgical side, because they need to intervene.
And Moreover, because it's a connected device and if the patient has an app you can actually pull that data and pull the data.
Yeah.
Nobody nobody really uses that.
But it is a feature that is available the second piece that we are finding on the E&P side. They are liking the three channels because he piece or do you live in the world of electrical activity and having that huh.
Available that robustness is very important and then the last piece that we're seeing.
More on the cardiology side that they're really appreciating is the fact that we are not using the customer customer electrode device can you. The standard electrodes. So they can switch the type of electrode based on the skin sensitivity of the patient. So an older patient that has you know sensitive scheme or somebody who's got some for skin outage or whatever you can.
Use it.
Different kind of sensor and still service that patient, whereas in other holter.
Holter patch solutions, you're stuck with the electrode that they are providing.
Thanks, So costs and one last question, so how does <unk> being positioned.
In terms like against other retail heart monitors.
So <unk> do we reposition it right is really for.
You know two categories right.
People, who are very engaged in that whole quantified self health span versus lifespan that space right people, who are very knowledgeable. They may have heart disease that runs in the family and they wanted to take a proactive approach to.
Managing there there.
Health and lifestyle and then we look at people who are diagnosed with cardiac issues do you have a personal device. So just as you have a you know a blood pressure cuff her await scale, if you've got if you're if you're a kidney issues right or are you a diabetic right weight makes a big impact so the cost.
And when you're using a pretty sophisticated way at scale to monitor where they're using a blood pressure cuff. So.
The bio hardest really positioned for those people that are diagnosed with cardiac issues for self managed trains. So we're kind of staying away from the personal heart monitor.
The context of fitness and exercise and really focus on okay, you've been diagnosed at the cardiac condition.
I'm sure you all had that feedback you want to track yourself see what's working what's not working that's how bio hardest position and it's also positioned into our the lifestyle management piece of our biotech cardiac approach so, whereas the physician can provide and give the patients blood pressure cuffs and weight scaled it can also say.
Hey for lifestyle management, and 40 or you know I wanted to see your exercise.
Three times a week they will provide the bio art as well so that's our positioning of the product so it's slightly different than the traditional fitness market.
Okay perfect. It actually one one final question because there's the extra last one.
So a lot of scale.
A bit more clarity at our distribution partnerships, but not so much on that ankle, but in terms of the head count. So in addition to the partnerships where you would be.
Increasing your sales force as well.
So we have always increased our sales rep in a strategic way and really driving and adding them as it facilitates opportunity in the market. So.
In this particular case, what we're continuing to do that right, we will add Iraq.
But we are very very focused on partnering closely on the distribution side, so that will create a.
Strategic.
Hiring for us for a couple of people that will actually work very very closely with those distribution network. So that we can help drive revenue from those and again a lot of that we will be talking about publicly in the coming weeks and months.
Perfect. Thank you and congrats on the quarter.
Thank you.
As there are no further questions at this time I will turn the conference back over to management for any additional or closing remarks.
Yeah.
Thank you everybody for joining the call. We appreciate you guys coming in and taking the time to listen to our story is always are there any other questions that come up that were not answered please feel free to reach out to us.
Directly or through Investor day biopsy Dot com. Thank you.
Thank you that does conclude today's conference. We thank you for your participation and you may now disconnect.
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