Q3 2022 PAVmed Inc Earnings Call
[music].
Ladies and gentlemen, greetings and welcome to the <unk>, Inc.
2022 earnings conference call at this time, all participants are in a listen only mode.
A brief question and answer session will follow the formal presentation.
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As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Adrianne mellow life's President of Investor Relations. Please go ahead.
Thank you operator good afternoon, everyone. This is Adrian Miller, Vice President Investor Relations at <unk>. Thank.
Thank you for participating in today's business update call joining me today on the call our Doctor Alicia Eclogue, Chairman and Chief Executive Officer of patented along with Dennis Mcgrath, President and Chief Financial Officer, Pat, but the press release announcing our business updates and financial results is available on pad Mezz website. Please take a moment to read the disclaimer about forward.
We're looking statements in the press release, the business update press release and this conference call. Both include forward looking statements and these forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made factors that could cause actual results to differ are described.
And in the disclaimer and in our filings with the SEC for a list and description of these and other important risks and uncertainties that may affect future operations see part one item one eight entitled risk factors in pad, but its most recent annual report on Form 10-Q filed with the SEC and subsequent updates.
<unk> and quarterly reports on Form 10-Q, and any subsequent form 8-K filings, except as required by law I bet disclaims any intention or obligation to publicly update or revise any forward looking statements to reflect changes in expectations or in events conditions or circumstances on which those expectations may be based.
Or that may affect the likelihood that actual results will differ from those contained in the forward looking statements with that said I would like to turn the call over to Alicia Eclogue DUC backlog.
Thank you Adrianne and thank you all good afternoon for joining us on this quarterly update call.
Our first start by thanking our long term shareholders for their ongoing commitment and support you'll notice that this quarter, we're using a new format.
In response to feedback, including our one of our long term investors in Boston.
Really happy that we've done that so far the feedback from at least epic webcast yesterday.
For my part I will.
Remind you I'm speaking of lucid bad will present, a pair down up there where we sit today and encourage those of you who want to take more details to review the webcast. If yesterdays dedicated lucid updates that'll be available for a week on the investor relation page Investor Relations page.
On the website.
So I turned up this past quarter and in the recent weeks. Our team has continued its relentless focus on executing on our long term strategy and our vision to build a high growth diversified technology company.
He said Barrett and technology teams are all delivering results, which are steadily advancing us towards that goal and are doing salary brackets say them on schedule and under budget as we continue to keep a close eye on cash preservation to protect our long term prediction.
So let me start with a few quarterly updates starting with lucid as we reported yesterday regarding volume increased 20% sequentially quarter to quarter and a.
436% annually 2088 tests in the third quarter.
We now have 13 lucid vendors operating stakes.
Plan to plan to open three more during the fourth quarter, the laboratories operating independently and we demonstrated enhanced quality and efficiency metrics on yesterday's call and as we noted we started to receive payments recognizing revenue on E cigarettes.
Uh huh.
We're excited that the various cancer care platform. This has progressed well and it is now proceeding towards the initial launch later this year.
All of the key pre commercial development project product mhm.
Mercury carpets ultrasound and ease of care are all progressing well ultimately towards design development.
Development testing and regulatory submission.
As I mentioned from our overall.
She'd point of view, we've kind of been able to continue to be active and execute our growth strategy, while preserving cash.
Right.
Just a couple of introductory lives on an avnet.
I admit it's a diversified commercial stage medical technology company.
Started in the medical device space, but we've diversified over the years to include both the diagnostic sector.
Yeah.
Corporate structure currently consist of two majority owned subsidiary Lucid diagnostics are publicly held.
Company in that manner.
Bears help our digital health company, which remains privately.
Yeah.
And that model has evolved into a shared services model, where it had been provides comprehensive services to the theory that other internal business unit.
And you can see on the fly in everything from administration HR finance product development.
I T regulatory manufacturing and clinical research and others are provided at the patent that level on behalf sooner.
And that provides us with a variety of key benefits to the company and we believe for the long term.
Our long term shareholders in terms of economy of scale.
So that diversification that has an impact on our cost of capital.
Having our current portfolio can be.
Divided into the commercial product pre commercial products that are.
On a clear path towards commercialization, and then project, which remain in the R&D realm.
On the commercial side, we have done to lucid product because I need to check we continue to do that.
All cases with the first generation Capex device <unk>.
Pre commercial side, we have.
The carpet ultrasound product, we have the two best products software platform that platform as well.
Several iterations of our smart court.
And then EBIT care, which is very thorough job weisman device, which is complementary to that you said that.
We also continue to work on the R&D project next slow Unfortunately, I have and I'll touch on that.
Sure.
Just a few summary slides to get on lucid, which are getting pare down from our update yesterday as we mentioned our growth.
Of the testing volume for our testing has been continued.
Continue to settle and increased 28% from the last quarter and this growth has been driven by combination of things increased personnel in the field as I'll show you as well as improved sales training and data driven processes.
I've said repeatedly that we view this as a bit bottle strategy, we're not full throttle yet and we wanted to generate sufficient test volumes and demonstrate our ability to grow testing volume and demonstrate physician adoption as well as to generate claims history, which is important for them for a long term.
Contracting and never contracting with payers.
I described this in a bit more detail yesterday, but briefly the volume.
And shifted to include about 22% of patients.
That had been tested were.
Performed that satellite lucid person.
Our own nurse practitioners.
Co located at a physician practice and we're excited about the expansion opportunity that comes with that with that new model.
I mentioned, we continue to steadily grow.
Well according to plan and expand our sales team a year, where you were up to 37 professionals on our team and as we've described over the last couple of quarters. Our plan is to continue that growth and plateau at a level.
Sales professionals.
That time period has been pushed into the first quarter at the end of this year and we expect to reach that number by mid first quarter.
The plan from that point honest and use that 16, but we believe we'll be able to continue to drive top line growth through.
Increased experience a medium rep right now it's only been in the field for.
For a month or two.
Believe it takes them four months to be fully effective.
Yeah.
Similar story with our lucid test centers our goal we have 11 states.
States covered right now with 13 centers to expand that with an additional three by the end of the year and that will get us to <unk>.
And again, we are planning this to plateau, they're not planning on opening additional pet owners and while the current drivers of growth isn't there to support them.
It's important that work with us.
Our expanded infrastructure.
Okay.
There's a couple of comments about the laboratory.
Uh huh.
Cause you know either.
Taking over the operations of the laboratory for February and we've seen some dramatic improvement in many parameters operational parameters quality parameters are shown in more detail yesterday and perhaps the most relevant one from the point of view of patients and physicians is that we have the turnaround time is not down to a record low.
Just under a week.
And as I.
Arrived in more detail yesterday, the process by which we are able to submit claims has.
It has improved has improved and we started that process in August .
Half of that 2000, what claims that we've held since the laboratory transferred in February and we're in the process of submitting their claims and they actually have started to receive even though that probably started in August .
Claims.
Claims paid in the.
Corning.
Just one comment about a couple of comments about Medicare.
If you look at the payer mix. There you can see that our payer mix is heavily weighted towards private person by person.
Our Medicare with regard to the lucid.
With regard to the L T D.
As you may recall back in the spring, we havent, apparently fairly intense amount of activity with the publication of the draft local coverage determination can be and at a flurry of activity around.
The public common period now the public common period over them, we simply wait until the multi X entity, then affiliated with the medical Medicare administrative contractor to get around to reviewing the responses.
Funding to them.
Well I just want to make one thing clear like that where it may have been some confusion on the call earlier it had been reports that multiyear.
With not engaging and that's just not the case, but we actually have had calls with model X. We got a call to discuss our clinical utility plan, but with regard to the LCD process.
It's not a interactive process he just simply wait until they complete.
Complete their review and then we have we'll have the opportunity to respond after the accomplishment, David and updated L. T D.
On the private payer side, we continue to have conversations with private payers, but ultimately for us to have meaningful conversations we need two things happened, we need increased claims history, which will get just getting started starting to do and also are you telling me that which we're starting to collect them.
As I mentioned, so far we have had out of network payments that are getting paid and.
And the full 50% to 60% out of network benefit.
The.
Paid that respects the target lift price, having said that and those payments are coming in at about 12 to 1400.
Which is gratifying.
Yeah.
And as I discussed yesterday on the manufacturing side, we're really happy to translate our manufacturing of diesel check for high volume manufacturing, we're extracting immediate benefits with regard to decrease in the second half as well as long with capacity and scalable long term scalable.
Let's move onto them.
Hum.
It's healthy.
Digital all company, that's developing any cancer care platform that combines patient engagement with the smartphone connected devices, along with an enhanced cancer care platform that the clinical care team can use to collect.
New data on patients who have cancer care.
And Ah respond accordingly, and to do so in a way that's integrated with a pump.
The long term plan is to incorporate smart device physiologic monitoring with an implantable pump.
Biosensors that all off a physiologic monitoring.
The.
The plan that we've described.
In previous calls is to first launch will be referred to as Garrett solar which is.
The cloud connected platform software platform in conjunction with.
With box connected a Bluetooth enabled device.
Curious is that first.
Uh huh.
To deliberate and implantable smart part this is a modular device that has an implantable physiologic monitoring device with the traditional basketball Court and then the final stage will be to have a fully integrated smart and final glassdoor.
Your logic physiologic monitoring.
Yeah.
So as I mentioned and I'll talk a little bit more little more put a little more detail now and we are on the verge of launching with them.
Popcorn.
By the end of this year on schedule as we have previously described so you can see on the left there.
We're launching software platform, which has been completed and is.
Completed testing and is now ready for lunch along with.
Bluetooth connected health care metric devices activity monitors scale.
That monitor blood pressure caused by a digital thermometer. So those are all Bluetooth connected through that.
That the company provide that a lot of that data along with patient's symptom reporting could be transmitted.
Through the cloud to the acquisitions the platform on the on the commercialization side, we worked extensively with Deloitte consulting to establish the market dynamics and to hone our commercial strategy, where we're quite excited about this model with a subscription based model with revenue with recurring revenue are the part of.
The practice will pay verity.
Friction fee per seat and there'll be able to bill with a remote patient monitoring or RPM coaches have shown here, which actually are established are they're not under rather than your decision not.
Not a COVID-19 era.
These are called that have existed and so really from a reimbursement point of view that's established there's nothing for us to wastewater. There's also are our platform will also consolidate telemedicine dorm, which they physicians will have the opportunity to develop as well.
Overall this gives them an opportunity to have a significant net contribution margin again based on this existing existing reimbursement.
An additional area I bet, we've learned at our initial engagements now with potential clients because they are.
New enhancing oncology model, which was the CMS program that it won't go into a lot of detail on but basically.
Use of incentives with regard to certain aspects of quality of care that would be enhanced with this kind of remote monitoring to provide them.
Financial incentives for practices that can that can actually be significant they can add significantly to the practice revenues. We're targeting the full range of oncology care Sarcology practices large cancer centers integrated health networks, a bit of an early emphasis on rural practices going forward.
Probably three things that we believe that's a remote patient monitoring will be beneficial and we have a commercial team that's already been.
That's already been utilizing demos to enter to interface with them such.
Such practices with potential clients.
Clients.
The other aspect of this that you might imagine is getting started with customer integration stuff on the relaunch of site. There's a whole slew of things that have to be done to make sure that the Betsy.
Practices are software or their EHR and so forth can be fully integrated with our system.
We hired a really talented and experienced person to lead this effort.
He led customer engagement epic electronic health record company and a great job.
So far with us establishing.
That infrastructure from customer integration, our initial interactions with the with potential clients has been that there's a very very strong focus right now on tools that can enable remote patient monitoring and everything that we've all the feedback we've received so far has been quite positive and we look forward to getting our first contract.
Mobile ear and officially launching.
This product.
Yeah.
Well right now with an overview of the other products within our portfolio as I mentioned, we still continue to.
Harbeck procedures utilizing the key opinion leaders at level two and two.
To provide us with procedural and product improvement, but as I've described previously all of our efforts for a longer term expanded commercial launch are focused on the carpets or ultrasound device.
That product is making good progress through that study design and product development.
We're starting to do cadaver work and getting and starting to the images that demonstrates that we're able to using them.
Device to actually see the anatomic structures carpal tunnel and positions I'm in a way so that the cutting can be done under under correct ultrasonic mentioned, that's progressing well.
The second.
Harry I'll focus on the pre commercial product is that they are a smart part a the middle of what we refer to internally as parents Mercury, which is the combination of the implantable cardiac monitor.
With an existing traditional chemo ward.
That is also progressing well we've had multiple interactions with FDA to understand and make clear.
What our preclinical testing will need to deepwater.
Mission.
We have engaged with several high caliber outside contract manufacturing partners for the various electronics closures and so forth and again.
So animal work and so again, that's moving forward on track and looking forward to getting quickly to design freedom moving toward the work that's required for regulatory submission.
Very much a similar story with he took care if you recall it and secure the device that is looking to compete with the Medtronic device for bleeding.
Dysplastic socket.
Obviously, it has synergies with the Ethernet switching products.
Users directed energy center frequency and we are also making good progress.
With the both the catheters the console electronics, all the mechanical aspects of it had multiple animal studies have shown really promising results and including indirect head to head comparisons with the Medtronic textbooks. So again on target.
We're on schedule to advance through design freedom of movement towards regulatory submission you comments about R&D project. Those of you who've been involved with patent for a long time now about next month.
Recollection of that history, we had.
Okay.
To have next slow actually complete that pre submission testing and.
Gulfport regulatory submission.
First half of this year and we're getting really good regulation law, which was the whole point of this.
The technology, but we encountered some technical challenges during the Ah repeat ability during the last eight months.
And that required us to kind of go back to the drawing board in Mexico.
Excellent back with BMO.
We're still very committed to the concept. We think is a good market opportunity here and there's a lot of activity right now in the R&D side, but right now it's still unknown, what the solution will be in and when we'll be able to bring it back on to a pre commercial.
Our portfolio is our implantable and policies.
Vascular access device again.
But that remains an R&D project, we have first generation device continues to undergo a first in human.
In Colombia, that's going well.
The Reits works, we've had no complications associated with it and we're continuing to expand the number of patients our long term plans with best depend a bit on a revised regulatory strategy, our new head of regulatory.
Regulatory and quality has.
Engaged with us on a process to develop a more streamlined plan than we had previously thought you'd relegated to and depending on how that goes we may move this up into the pre commercial realm.
After we've completed the person who's done.
So with that I'll end and hand, the reins over to Dennis to give myself or quite initial uptake.
Thanks, Felicia and good evening, everyone you see in front of you the balance sheet. So our summary financial results for the third quarter reported in our press release that was published earlier today.
On the next three slides I'll emphasize a few key highlights from the quarter, but I encourage you to consider those remarks in the context of our full disclosures covered all of our quarterly report on Form 10-Q that was filed with the SEC yesterday afternoon.
And it is available on our website. So as you can see here.
Cash that <unk>.
Sequential decrease was $8 4 million.
Vendor payables.
A $3 million sequential decrease when considering accounts payable and other recurring accrued expenses.
Convertible note a net increase of 6 million driven by $10 2 million net proceeds from the issuance of an additional convertible note it was offset.
By $5 million of principal converted to equity related to the April 2022.
As mentioned yesterday, the committed equity facility from lucid stock issuance proceeds for the quarter were $1 8 million most of which we had already reported to you as part of our update in August .
Shares outstanding for pad met including Unvested restricted stock awards as of today, its 93 2 million shares.
And as also mentioned yesterday lucid is now S. Three eligible and as previewed with everyone previously similar to what we have previously done at pad let them.
Lucid board considers a good governance to have a shelf registration with an embedded ATM on file with the SEC lucid were planning to do so in due course.
Slide 18 here.
Compares this year's third quarter to last year's third quarter uncertainty.
I Trust you will review the information on my comments in light of the cautionary disclosure at the bottom of slide about supplemental information, particularly the non-GAAP information.
Revenue for the quarter reflects 39 Eastern guard tests average payment rate of $1945 per test.
Right.
Higher than 1938 Medicare rate as we received one cable closer to our E. S. P. A 2000 and $499.
And then the Medicare rate that skewed things slightly higher.
The prior year reflects the fixed monthly fee received from the third party lab that lucid use.
Before setting up our own lab earlier this year.
Revenue recognition are.
The key determinant is the probability of collection.
Mentioned this multiple times in the past for the vast majority of loosen the lucid patient out of network claims submissions means revenue recognition occurs when the claim is actually collect it versus when the patient report.
Invoiced and submitted for reimbursement.
As you'll see in our 10-Q. This is called variable consideration and jogging of gaps ASC 606 revenue recognition, which we all have to live by those guidelines.
President and dealer is insufficient predictive data.
The recognized revenue when invoiced.
Our GAAP loss is slightly higher about 2% higher than our non-GAAP losses, slightly lower about 5% lower for the third quarter.
Due to the effect of higher noncash charges in the current quarter related convertible debt most comparisons our sequential comparisons.
Our non-GAAP loss per share is 15 cents.
For the third quarter compared to a loss of 17 states.
Per share in the previous quarter.
So slide 19 here is a graphic illustration of our operating expenses as presented in detail in our press release.
The total GAAP and non-GAAP Opex was relatively flat sequentially.
The cost of revenue primarily consists of easily check devices lab supplies and fixed lab monthly or facility costs.
And is now being presented in our 10-Q as operating expense consistent with the practices of other diagnostic companies.
Sales and marketing was slightly lower about 5% sequentially.
<unk> also decreased about 9% sequentially and some of that reflects an allocation of about 800000 of log costs in the prior quarter as no revenue was recognized in that quarter and therefore, the typical cost of revenue type expenses are reclassified to G&A in the previous quarter.
And then lastly, R&D decreased 8% sequentially.
So with that operator, let's open it up for questions.
Yeah.
Thank you.
Ladies and gentlemen at this time, we will be conducting a question and answer session.
If you would like to ask a question. Please press star one on your telephone keypad.
Confirmation film will indicate your line is in the question queue.
You May press star two if you'd like to remove your question from the queue.
All participants using speaker equipment, it may be necessary to pick up your handset before pressing desktop keys.
Ladies and gentlemen, we will wait for a moment, while we poll for questions.
Our first question comes from the line of Frank.
<unk> from Lake Street. Please go ahead.
Okay.
Good evening Hi, guys. This is Charlie mounting on for Frank just a couple of quick questions for me it's just.
First on the lucid front I heard your comments about the flat towing centers I assume that does not mean it definitely can you maybe just talk what you're looking to see before re accelerating openings and maybe any feel for timing around that.
Sure let me just start by emphasizing one thing too.
To keep keep hammering this point that the lucid test centers support the growth, they're not drivers of growth right, they're not they're not they're not they're not they don't generate actual activity there there available for them.
That are that are ordered by physicians through our sales and marketing process to actually perform testing that and also just want to emphasize one thing real quick Charlie before answering it well, which is that we have now expanded our use of the satellite lucid test centers, where our nurse practitioners can be more mobile and work with them. So.
So the the plateauing of the lucid test centers mirrors, the flat part of the same strategy of plateauing of our Salesforce altogether and this is something we described in a bit more detail I believe if I'm. The last on the last quarterly call that as part of our efforts to be cautious with regard to cash preservation, we set a target.
Good for both of those that we thought would give us would have give us critical mass.
Regard to the sales team and then with the Cushing support with lucid test centers to support the sales team, where we could continue.
Next level to drive growth through increased.
Increased effectiveness of the sales force as they get more time in the field and so forth all of that is really driven by.
By the mid mid throttle strategy right, we want to have enough activity. So we can demonstrate ongoing sales growth to get the word out to continue our momentum with <unk>.
Physicians and physician adoption.
Need to continue that growth as well to generate claims history, which is a critical step one of the critical steps in engaging private payers for in network contracts, but to do so.
Honestly at a mid throttle level, because we still have we still are not at the point, where we have predictable reimbursement. So the answer I think to the last part of your question is is there. Some permanent thing noted it's really just a we're pausing at a level that we think we can do that.
We feel confident that will allow us to continue to drive volume growth and the while keeping our cost in check and that.
Pivoting from that will be a function of what we what we see with regard to.
Both the trajectory of out of network payments and the percentage of the lucid tests that are paid out of network again emphasize we've been quite happy with.
The payments that we're getting we just got a note. We just don't have enough of a sample size you have to know what percentage of the test we will we'll generate that volume and then of course as we.
Collect clinical utility data and engage with private payers will start seeing something that work payments as well so until we.
It really a holding pattern that we believe will continue to still drive test volume growth, but but holding pattern until we get with regard to the infrastructure until we get more predictable reimbursement numbers and we just think that's the appropriate sort of a prudent thing to do.
From a cash preservation plan.
Great. Okay. Thank you and thanks for clearing that up for US My other question just looking at the balance sheet. It looks good but last quarter, you called out modulating spend the christer asset portfolio outside of lucid with a focus on the most near term and largest opportunities.
Has your capital allocation changed at all since then or should we continue to think the.
The order of crowd or prioritization, it's fair Syncarp bags.
It's exactly what we are wherever he went to.
Described and we've stuck to that plan and you can see the well we are seeing some savings already on the R&D side. So it's it is entirely at this point from the.
The non lucid, let's just put it in the two phenomena. We have obviously you have the commercial products with lucid.
Very soon we'll have the commercial software product with them with their stuff.
The various solar software platform, so that that'll be out in the commercial world when it comes to the <unk>.
Investment of resources.
Our capital allocation that you as you say into the product portfolio. The focus is.
I believe and remain the same on those three products. So the three products being the ultrasound portion of Capex.
The first version of an implantable burst device that various marketing product and.
He sits here esophageal ablation product. So those that is embedded in that is where we are focusing our resources and capital allocation, but we're not shutting that we continue to.
My son effort on the two research projects, which I described but those are relatively modest investments with pure R&D work at this time and then as we talked about last time, we have rationalized and put on the back on the backburner a number of them.
Lower priority lower yields we believe a higher risk projects that we've been working on and those remain on them on the shelf.
Okay, great. Thank you very much and this if I can just one last quick question you spoke to a commercial agreement with another increase in May can.
Can you give us an update around that contract and call out whether or not you have received reimbursement reimbursement under that contract and if so kind of at what level.
Just to remind you that even though we had that was the first example, but since then we've reported on multiple I believe we have seven correct me if I'm wrong, if I'm wondering the seven or eight.
<unk> secondary PPO contracts, we have not broken them that data and we're not reporting on those individuals' on sort of individual plans at this point that would be sort of too granular at this level with the with the sample size and I think we'll just suffice it to say that you know you saw we had 39 payments in the quarter, though they are a mix of a variety of private payors.
And the and Dennis gave you the data on the average payment, which was the 19th just a bit over $90 million.
And also that the out of network payments that are coming in are 1200, 1400. So you know as we get a higher more volume in our sample size is large enough.
We will certainly be in a position to kind of breakdown.
Where that where those payments are coming to whether they're from secondary ppos from iron that work with traditional payers eventually with Medicare and so forth, but I think it's a bit premature to break then Dennis would you like to add anything to that.
No I agree.
Too early to kind of give any kind of directional.
Information, that's reliable to be able to create some kind of forecast based upon the information that we've gotten so far it's just too early in the submission process and the collection process.
I mean, the bottom line.
Charlie is that.
The 39 payment for the test that we submitted in August and got paid before September were private pay.
So and it was a mix of different parents, well, we'll look forward to increasing that and perhaps at some point breaking that down.
Okay, great. Thank you very much and thanks for answering my questions and I'll hop back in queue.
Thanks Carolyn.
Thank you.
Thank you.
Our next question comes from the line of Ed Woo.
From ascend capital markets LLC. Please go ahead.
Yeah. Thanks for taking my question and congratulations on the progress I know you are very focused with your capital allocation right now, but what are you seeing out there in terms of the M&A space and opportunities for adding new products into your portfolio have you seen valuations come down significantly to a point where youre seeing.
Interesting opportunities out there or are valuations still you know all over the place.
The answer is yes, and I always appreciate your interest in our call because I know, there's not a lot that I can talk about sort of directly but there's a lot of there are a lot of opportunities out there.
That has historically been the case, we get to see a lot of opportunities within the space and we've got to evaluate them and and and you're right. I mean the markets are there are companies that are that are tight for cash and for a variety of other reasons are looking to partner or to be acquired and so forth. So.
There's a lot of activity there nothing to report yet and we will obviously, let you guys know I mean, if if and when we crossed the threshold with any of the opportunities.
But let me just reiterate one other point I made last time, which is that.
Our cash preservation stance is important it's important that we maintain a runaway and protect our long term interests, but I've also said repeatedly that we're not.
We're not getting sort of violate our core core core DNA of this company, which is too.
To pounce on attractive opportunities as we can.
Just like we did with lucid with mirrors the profile of what that would look like is going to be it's obviously a bit different now than it would've been two or three years ago.
And we're looking at opportunities with a very close eye on the opportunity for them to either be synergistic with our current portfolio in some way and to not be a capital drain and to be accretive in.
Some capacity here in the near future. So those are the criteria. We look at we have opportunities. When we we have looked at and continue to look at and while well, let you know when we went on the shelf.
Great well, thank you and good luck.
Thanks, Ed.
Yeah.
Thank you. Our next question comes from the line of Anthony <unk> from.
From Maxim Group LLC. Please go ahead, thank good evening.
Hey, good evening, Dennis highly Sean how are you great.
Wanted to just dig a little deeper into the commercial launch launch for virus.
By the end of the year.
Can you talk a little bit about about that particular business model and what the pipeline of potential.
Potential customers looks like at this point.
Yeah, well, let me start with the latter so the pipeline of potential customers are really the full spectrum of oncology practices. So that we have.
We were really fortunate that we have a good relationship with Deloitte and we did an extensive market dynamic in marketing and market them.
Alex this with them. So we have a really good understanding of where disease.
Oh.
<unk> get their care for their cancer and it can vary anywhere from a relatively small private practices to a larger.
Our larger practices, even mega practices as well as.
Cancer programs that are affiliated with more moderate sized community hospitals, all the way up to the big academic Medical center. So really all of them are our targets for us as I mentioned that there isn't there isn't an obvious opportunity with rural with world practices in terms of the advantage of their patients tend to be more dispersed.
The advantages of remote patient monitoring.
Our our particularly.
Potentially greatest wouldn't that put that group.
And the business model is well I'll, just sort of dive into that a little bit deeper and as we engage with the practice, we when we engage with them. We have most now that show how the software platform.
Can feed can be fed with.
Ah patient symptom reporting as well as data from these Bluetooth connected devices.
And provide them with data to not just to enhance their care, but also to provide them with the opportunity to required.
<unk> activity.
That can be subjected to remember that could that could be reimbursed and remote patient monitoring or RPM.
R. P M. It's sort of a hot topic right now and setting up a system that allows physicians to bill crowd under RPM codes. Again. These are established codes are not transient codes like clinical telemedicine codes that came from Covid.
Requires really good software platform and our feedback so far has been quite.
Quite positive we have you found that the practices are very focused on RPM.
Codes at the opportunity there with the practice.
Revenues, three want him and and that our platform does in fact do that one of the things that you have to do in order to go for RPM codes or on a monthly basis as they have to show that the patients submitted paydown of some kind from a device and after game.
Device.
At least 16 days of the year. So that requires a really good platform that engaged with the patient that encourage them to do the <unk> to measure the various parameters the current matter.
The forward thinking once we have an implantable device that'll obviously be fixed because that's not gonna depend on patient patient engagement patient them.
Patient compliance.
And you know as I mentioned there was the other part of the value added here comes from being able to integrate within their system.
The process of integrating with their with their health care with their electronic health record and other aspects of their IP infrastructure requires.
Some talent and skill on our part and we were really happy that we've recruited somebody who's able to them to help us with that type of engagement.
So that's a little bit of a prediction of what I said, but perhaps there was more more details that you wanted to dive into that yeah. No. That's great. That's great and then just.
A quick follow up for just a quick question on cortex. So.
There is debate about how much coverage CMS, which expanded coverage of telemedicine during COVID-19.
We'll look currently allowed.
Allowed to continue.
In terms of remote patient monitoring are there particular CPT codes right now.
It's all under and they're yeah.
It actually on slide 15 are there are there are codes for the onetime onboarding for the for a monthly fee.
Hum.
Listen all on slide 15, and those are not again just to emphasize for the third time those were not.
Temporary.
Codes that have been in place. The telemedicine codes were brought in under Kogan and are subject to ongoing sort of statutory updates, but these RPM codes or not.
So they're there they are their codeshare boneless accomplish the payment Rachel will establish the criteria under which you can build on our well established with regard to the 16 days a month.
So all of that is all of that infrastructure and reimbursement is established.
Okay, Great that's helpful and then.
Before switching to <unk> 37 sales professionals go into 58 that is that 100% for lucid.
That's really something that we're not we're not we haven't reported on the commercial team for four various yet versus just obviously its just people are just gearing up with that we have strong leadership in place. We are starting to create individual sales reps are right now the sales leadership. They are the ones who are actually out looking and.
Scouring for or early early adopters to them to the various technologies and we'll report on the on the <unk> sales team over time.
And on <unk>, we have we do have a.
Three individuals' the same into the individuals that we've had throughout this limited.
Procedural and product improvement focused on launch and they remain the same.
Okay any any feedback from kols on on Capex at this point.
So the Capex activity right now remains that procedural in product development and product improvement work. So we have our core group of Kols, who would look to expand them in here and there, but as I mentioned before we're not investing in a and expanding.
Team or expanding that Monday the activity been.
The limited number of Kols, we have we're using this exclusively as a procedure and our product development exercise and we're gonna wait Capex ultrasound before Kieran.
For a full commercial launch.
Okay, Great I'll hop back in the queue. Thank you very much I appreciate it.
Just one follow up I know you often do but can I get that one real quick one quick follow up to Anthony's last question, which is that as you might imagine.
The surgeons and our Kols list, who we do training with but you could ever worked with and they do a limited number of cases. We've obviously are also shown on the Carpet's ultrasound device in the prototypes for that and where we're heading with that and the feedback on that on the ability of these are folks who have done the procedure with the gen. One device and the feedback was the opportunity to have it.
For alumina ultrasounds ultrasound imaging as Youre working within the carpal tunnel has been has been quite positive and where we're utilizing those folks with corp ex experience to help us with that development process.
Thank you operator sentiments interruptions.
Thank you.
Ladies and gentlemen, we have reached the end of the question answer session I would now like to turn the conference to Doctor, Alicia Eclogue, Chairman and CEO for closing comments.
So I'd like to again, thank you all for joining US today. It was really great questions from all of the folks who came on line.
Good discussion.
Look forward to a waste of being fully transparent with our communications and keeping you abreast of our progress and to keep them and keep an eye on for our press releases and obviously these quarterly calls we appreciate any feedback as I mentioned the webcast version of this was the result of direct feedback from them individual investors who have.
Kim Kim gave us advice on how to improve our communications and we're always open to that for two two to more feedback positive or negative.
Please keep up to date sign up for email alerts to keep up to date with our social media feeds.
And as always Adrian is available for direct contact that 8-K M. At Padma dotcom. So again, thanks, everyone and have a great.
Thank you. The conference calls have made ink has now concluded. Thank you for your participation you may now disconnect your lines.
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Yes.
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