Q4 2022 Helius Medical Technologies Inc Earnings Call
Speaker 1: So.
Speaker 2: Thank you for standing by. Welcome to the Helios Medical Technologies fourth quarter and year end 2022 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question and answer session. Instructions will be given at that time. As a reminder, today's conference may be recorded.
Speaker 2: I'd like to hand the call over to your speaker, Michelle Bilski, in Best Relations. Please go ahead. Ask the operator questions without affecting the competition on both sides of the window.
Speaker 3: Thank you, operator. Welcome to the fourth quarter and year-end 2022 earnings conference call for Helios Medical Technologies. This is Michelle Boeske of Insight Communications and Investor Relations for Helios. With me on today's call are Dane Andreef, Helios Medical's President and Chief Executive Officer.
Speaker 3: and Jeff Batisan, Chief Financial Officer. Also on the call today is Dr. Antonella Favet-Vantelt, Helios Medical's Chief Medical Officer, who will be available as needed during Q&A. At this time, all participants have been placed in a listen-only mode. Please note that this call is being recorded and access to the webcast can be obtained.
Speaker 3: through the investor section of the Helios website at www.heliosemedicals.com. Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including those identified in the risk factor section of our most recent annual report on Form 10-K and quarterly reports on Form 10-Q .
Speaker 3: Such factors may be updated from time to time in our other filings with the FTC, which are available on our website. All statements made during this call are as of March 9, 2023. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events, or otherwise, except as required by law. I would now like to turn the call over to Dane Andreef, President and Chief Executive Officer of Helios. Thank you for your attention.
Speaker 4: symptoms of MS when used in conjunction with a supervised therapeutic exercise program.
Speaker 4: Ponds is also authorized in Canada for the treatment of chronic balance deficit due to mild to moderate traumatic brain injury or TBI and just announced this morning for stroke.
Speaker 4: In the US, PONS also has an FDA breakthrough designation for stroke in addition to the breakthrough designation for MS, which we believe will be a significant benefit as we see green embarrassment in the United States.
Speaker 4: During the fourth quarter, the benefits of PON therapy continued to resonate with healthcare providers, physical therapists, and patients in the US as we added prescribers and trained TTs.
Speaker 4: Because Parn is the only available portable and readily accessible neuro stimulation therapy with the potential to generate neuroplasticity essentially rewiring parts of the brain.
Speaker 4: It is a potential game changer for people suffering from gait imbalance impairment.
Speaker 4: Our mission is to make this important and innovative technology available to as many qualified patients as possible, and we are working to improve access on multiple fronts. Physical therapists play a key role in pond street and training them quickly enough to meet demand.
Speaker 4: with the bottleneck we faced early in the US launch.
Speaker 4: to standardize the process and reduce training time, we introduced an online training module which allows practitioners who wish to treat MS-related balancing gait deficit to learn remotely at their own pace in three hours or less.
Speaker 4: Instead of through an in-person multi-day course, it has quickly become the primary method for training therapists, which means faster relief for patients.
Speaker 4: Another way we've improved access is through our recent partnership with Upscript.
Speaker 4: a leading telehealth company focused on providing medications and devices direct to the consumer.
Speaker 4: through pondtherapy.com, Americans with gait balance deficits can now access online health evaluations.
Speaker 4: Fulfill Ponds Therapy prescriptions through a network of fully licensed providers with e-prescribing capabilities and obtain ponds through home delivery.
Speaker 4: The initial response has been overwhelmingly positive.
Speaker 4: And the first devices were shipped in January 2023.
Speaker 4: Patients who are motivated to improve their walking can now take the fight against MS into their own hands.
Speaker 4: Sales of Ponds devices are currently on a cash pay basis.
Speaker 4: but we don't want cost to be an impediment to use.
Speaker 4: In June 2022, we launched our Patient Therapy Access Program, or PTAP.
Speaker 4: which provides patients access to on label Pawn therapy at an early 85% discount to list price.
Speaker 4: PTAP was scheduled to expire at the end of 2022, but we're pleased to announce that we're extending this program through June of 20.
Speaker 4: 23.
Speaker 4: The vast majority of U.S. Ponds device prescriptions in the fourth quarter were through the PTAP program.
Speaker 4: The Neurology Centre of New England has been an important contributor to our PTAP program, and we were thrilled to add the institution to our Ponds Therapeutic Experience program.
Speaker 4: PONSTEP is an open label observational trial that allows us to partner with some of the nation's premier academic medical centers to observe PONST therapy in a real world study.
Speaker 4: while enabling the key opinion leaders in MS management to build their knowledge and advice, advise the broader medical community.
Speaker 4: During the fourth quarter, we also added MGH Institute of Health Professions.
Speaker 4: and Oregon Health and Science University to the program, bringing the total number of PalmStep Centers of Excellence to five as of today.
Speaker 4: to most effectively help those suffering from balancing gait impairment. It's critical that we engage not only the patients, but also the two other PON therapy stakeholders, the neurologists who prescribe PON and the physical therapists who oversee the treatment. You've already heard how we've improved and streamlined the treatment of PON.
Speaker 4: neuro rehab specialists and have well over 200 leads to follow up on.
Speaker 4: Interacting with the broader neurology community, as we have with concept, is another key to properly educating patients and providers about the mechanism of action and benefits of confidence.
Speaker 4: In April , we will be attending the American Academy of Neurology annual meeting in Boston. And at the end of May, we'll be at the consortium of multiple sclerosis centers.
Speaker 4: annual meeting in Denver, which is attended by the MS Centers of Excellence.
Speaker 4: focused on MS neurology. Turning to our Canadian activities, at the end of 2022, PONDS was authorized for sale in Canada for chronic balance deficit due to mild to moderate traumatic brain injury.
Speaker 4: as well as all the moderate symptoms of MS. Yesterday,
Speaker 4: We learned that Health Canada extended cons indication to include use as a short-term treatment of gate deficit to mild to moderate symptoms from stroke. An estimated 78,000 Canadians are currently living with stroke with more than 89,000 new strokes occurring every year and gait impairment is a major source of post stroke disability.
Speaker 4: A real world evidence database analysis showed that mild and moderate stroke patients using PONS therapy experienced an average of six to seven point improvement in their functional gait assessment score over the 14 week treatment period, which far exceeds the 4.2 minimal detectable change usually seen in stroke patients. Before starting treatment, most patients were considered at risk of falling, but after 14 weeks of PONS therapy, they were considered at risk of falling.
Speaker 4: 28% of the patients were no longer at risk of falling. sourcrotch is specific Heine, sorry,
Speaker 4: routine rehabilitation physical therapy does not usually provide a meaningful reduction in this risk.
Speaker 4: usually in the 1 to 3 percent range. So this is a significant improvement.
Speaker 4: Ponds has been commercially available in Canada since 2019 for MS and TBI, and we're happy that Health Canada authorized Ponds for stroke, enabling Helios to deliver clinically meaningful benefits for stroke patients as well. This was a huge win for Helios and for Canadian suffering, balance and gait impairments.
Speaker 4: partnership agreement with Canada's HealthTechConnect, a leading health technology company specializing in neurotechnology innovation.
Speaker 4: This agreement grants HTC the exclusive rights to purchase, market, and sell, and distribute ponds through the Metropolitan Vancouver area, subject to certain minimum.
Speaker 4: The initial term is for five years with the possibility to extend it to 10 years.
Speaker 4: HTC has been an instrumental partner for Helios, and we're excited to strengthen our relationship and expand our presence across Vancouver through HTC's network of leading edge neuro rehabilitation clinics.
Speaker 4: Other exciting developments are underway in Canada and we hope to share them very soon.
Speaker 4: Though it is currently a smaller market for us, we believe Canada's growth potential parallels the U.S. market in the near term due to the multiple indications, in particular TBI and now stroke. With that, thank you and
Speaker 4: With that, let me turn the call over to Jeff to discuss our fourth quarter financial results in detail. Let's get started.
Speaker 5: Thanks, Dane.
Speaker 5: Thanks, Dane. It is a pleasure to be with you today.
Speaker 5: So, our revenue was 282,000 for the fourth quarter of 2022 compared to $258,000 in the fourth quarter of last year, an increase of 9% comprised primarily of product sales in both periods.
Speaker 5: Full year 2022 revenue was $787,000, an increase of 51% over 2021, reflecting the impact of the U.S. commercial launch of ponds for MS in April 2022, partially offset by a small decrease in revenue in Canada that resulted from exchange rate.
Speaker 5: $4.2 million in the fourth quarter of 2021, a decrease of $1.4 million.
Speaker 5: The decrease was primarily the result of lower product development and clinical trial activities following the US commercial launch of POMS.
Speaker 5: Operating loss for the fourth quarter of 2022 was $2.7 million compared to a loss of $4.1 million for the prior year period.
Speaker 5: The public warrants we issued in connection with the August 2022 financing are accounted for as a derivative liability instrument on the balance sheet.
Speaker 5: The increase in the valuation of these derivative instruments from the date of the offering
Speaker 5: and evaluation of these derivative instruments from the date of the offering to the date of the offering.
Speaker 5: The quarter or year end resulted in a expense of $2.5 million during the quarter. The warrants will require revaluation in future quarters.
Speaker 5: tied to our share price, resulting in non-cash income or expense for each recording period.
Speaker 5: We reported a net loss for the fourth quarter of 2022 of $4.9 million.
Speaker 5: or a loss of 17 cents per share, compared to a net loss of $4.1 million or a loss of $1.31 per share for the same period last year.
Speaker 5: Our cash burn from operations for the fourth quarter of 2022 was $2.1 million, a significant decrease from the average quarterly run rate of approximately $4.1 million over the previous three quarters of 2022. Reflecting the results of our focus on reducing cash burn and extending our cash run The first quarter of 2022 was $2.3 million, a significant decrease from the average quarterly run rate of approximately $4.1 million. Reflecting the results of our focus on reducing cash burn and extending our cash run Our next quarter of 2022 was $2.4 million, a significant decrease from the average quarterly run rate of approximately $4.1 million, a significant decrease from the average quarterly
Speaker 5: to increase throughout the year as the U.S. commercialization of ponds continues to develop.
Speaker 5: though we may experience quarterly fluctuations as we make refinements to our U.S. commercial roll out of ponds.
Speaker 5: We believe broad third-party payer reimbursement will be needed to achieve our full revenue potential.
Speaker 5: Our 2023 quarterly cash burn is also expected to be below comparable quarters in 2022, reflecting the results of our actions in 2022, while recognizing that the first quarter cash burn is typically the higher quarter as a result of the concentration of cash payments.
Speaker 5: for such things as bonus payments, audit fees, and public company related expenses.
Speaker 5: $14.5 million of cash on hand at year end and our reduced cash burn, we believe we have a cash runway to take us through 2023. With that, operator, let's now open the call for questions. Thank you. If you'd like to ask a question, please press star 11. If your question has been answered and you'd like to remove yourself in the queue, please press star 11 again. Our first question comes from Jonathan Ascoff with Roth MKM. Your line is open. Because we don't have a question, please raised your right hand and ask a misleading question.
Speaker 6: Thank you. Good afternoon guys. Congrats on the progress and I'm curious you know the PTAP extension is that you know driven overwhelmingly by you know the price the cash price being you know prohibitive let's say.
Speaker 4: Hi, Jonathan, it's Dane. Yes, first and foremost, because it is cash pay and we're implementing our reimbursement strategy, but we also want to have, we want to share the adoption.
Speaker 4: Okay, and how about the TEP traction? What can you tell me about people in TEP? Currently, we are enrolling into our five sites at the moment. So we're pleased with the five sites that have signed up so far. We're looking to hopefully get to the 10 to 12 level by year-end. Okay, and how about trial enrollment for stroke?
Speaker 4: In the United States for for Ms and gate deficit 1st and foremost, we're looking. Through CMS right now and looking to meet with them over over the next 3 to 6 months regarding our coding 1st and foremost. And then 2nd, also remember that the program will go live and that's for emerging technology. What we understand right now the, the, the law will come down. The rulemaking will come down in April . There'll be a 60 day notice period.
So if you look at the programs that were implementing, one to generate evidence for insurance would be our pawn step program, which we just spoke to, but also our registry under what the under M S right now. So we are collecting data, medical records and so forth under our registry. And, Antonella, would you like to just add to that as well?
Yes, absolutely. Thank you, Dane. Right now we have, as I mentioned, the concept program which aims to provide data regarding the utilization, the real-world utilization of PONS and the ability of PONS therapy to be effective under different conditions of adherence to physical therapy.
The other program is the registry program, which aims to collect not only information about therapeutic outcomes of parts, but most importantly, therapeutic outcomes as it relates to the overall management of MS patients. Therefore, we have...
what we call soft outcomes that we are prepared to collect and present to both CMS and the insurance partners to show cost-effectiveness in management of patients with MS. Okay, thank you. And PTAP is still $3,895, and the cash is still around $1,700.
$17,000, $18,000?
Hey, this is Jeff. The PTAP is $38.95. The cash pay pricing is around $14.5.
Hey this is Jeff. The PTAP is $38.95. The cash pay pricing is around $14.5. Okay thank you very much guys.
Yep, thanks Jonathan. Thank you. Our next question comes from Jeffrey Cohen with Leidenberg Salman. Your line is open. Hey, this is actually Destiny on for Jeff. Thank you for taking our questions. I just have a couple around a bunch of the things you talked about. So can we start with...
how many PTs you've trained today to date through your online training program? We haven't announced that, but it's well over 100 right now. And if you look at just between H
I'm wondering around PTAP, you said it was extended until June 2023. So what kind of access strategy for patients that is? Are you thinking about implementing or leveraging beyond June 2023? Is there the opportunity for it to be?
would you have something a little different? Just high level, what are you thinking in terms of that?
You know, at the moment we have. Okay, go ahead. Yeah. Yeah. Yep. Yep. Sorry. Yeah. So, you know, I think at the end of the day, we're going to be focused on making sure that there's access to Ponds therapy.
We're also very much interested in making sure that we're gathering data that allows for reimbursement. And so I think that we will continue to look at ways to make sure that there's access to ponds, but also pushing towards getting reimbursement, because ultimately reimbursement's going to be key. And so I think that's the basis of what we're really looking at how do we do this as part of our change that we saw earlier in the series. I woulddone' given it. And I'd evenappputed to most of the people inLaurence's
I think we've announced it until June 30th, and as June 30th approaches, we'll look to see what makes sense on a go-forward basis at that point.
Okay, perfect. Yes, I know you guys have been very diligent in trying to make this accessible.
Awesome. Last one for us, you mentioned about 200 leads.
that you're going to follow up with. Can you just walk us through what that follow-up process looks like and can you assign any like timing to any of those leads or is it still a bit too early to tell?
You know, we've actually had a number of access or upon therapy online training already before the conference. We actually did a teach in our director of. Of physical therapy at Helios.
Whitney did a great job. So she actually trained PTs live right there and then at our booth after hours So we were getting actually a great response, but really Definitely a bigger Movement would be going after the super regional PT clinics
like physical, like ATI, like PT Solutions, and a few others that we would like to be able to just roll it out at a national or a corporate level. The Pawn Strength, because it's so easy, it's free.
to the PT and to the clinic. They could do it in three hours or less at their own time. They could break it up. It's actually a wonderful resource for them but also for the patient.
Got it. Okay, that's great. Really great. All right. That does it for us. Thank you so much. Thank you. Definitely.
Thank you. As a reminder, to ask a question, please press star 1-1. Our next question comes from Anthony Vendetti with Maxim Group. Your line is open....
Thanks. Good to see you, Dane, at the PT conference in San Diego.
No, that was a wonderful meeting. Thank you, Anthony, for spending time with me. Absolutely. Most of my questions were answered, but—
Can you talk a little bit about your operations in Australia? I know it's approved. They were authorized for sale for short-term use. Is that still early stages?
Just an update on what that is there. Well, sure. So again, just to remind everyone on this call, our investor base, the TGA, which is the regulatory body, approved helios for balancing gains.
with no indication. So if you think about that, it really puts the PON device, PON therapy, back into the practitioner's hand. So if they have a stroke patient in one corner with gait deficit or an MS patient with gait deficit.
or a TBI across the room with a balanced deficit, they're able to treat the patient. So that is a very exciting potential for us. We are talking to consultants and looking at distribution partners for Australia, but no news yet.
at the moment. Okay, okay. But that broad sort of indication seems like a...
you know, a significant market opportunity potentially in Australia.
Very much so. Even though it's a smaller country than Canada's 40 million people, I think Australia has 26, like you said, Ponds therapy or Ponds device could be treated for any of their balance and gait deficits across any neurological
indication for traumatic brain injury. Okay, great. Great.
Just remind us, you mentioned that there's another conference upcoming, a neurology conference you're going to be attending. When is that? And – it.
What's the goal when you attend that? Yep, so that's the, in April , it's going to be in Boston, it's the American Academy of Neurology, and that's for general neurologists. So remember, all neurologists and prescribers can prescribe for MS.
for gate death to do the MF. So we definitely want to be there. We have a booth there and really provide our clinical data, our real world data in MF. But also talk to them about our platform right down in the US, how easy it is for any rehab, hospital or clinic.
and the physical therapist and or the rehab hospital. Okay, great. And then maybe more for Jeff, I guess the guidance of revenues to exceed what they were in 22, in 23, but at this stage, obviously there could be a lot of quarterly fluctuation. Should we expect that fluctuation to be similar to or trend according to the cadence that it was in 21 and 22, or literally it could be up and down every quarter?
just because of the stage of stage of growth you're at? You know, I think it's more of the latter. It's just, you know, we're doing a number of things getting the rollout happening here in the US. So I think that there's going to just be fluctuations and
and how things, the uptake occurs here in the US. You know, having said that, there always is in the Canada side, third quarter's always the soft quarter in Canada, and that's because with the weather, that's what people are vacationing, and so that's typically the softest quarter there.
All right, thanks so much. Thanks, Dane. Thanks, Chip. Appreciate it.
Thanks, Andrew. Thanks a lot. Thank you. There are no further questions at this time. I'd like to turn the call back over to Dane Andrews for closing remarks.
Great, thank you everyone. We at Helios continue to be gratified by the marketplace's perceptions upon and are very proud of the foundation we built.
Ponds is an important therapy that has the potential to improve the lives of millions and we remain committed to bringing this innovative technology to all those who can benefit.
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