Q4 2022 ENDRA Life Sciences Inc Earnings Call
Speaker 4: I P.
Speaker 5: Sighing
Speaker 6: participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Speaker 7: After today's presentation, there will be an opportunity to ask questions.
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Speaker 10: I would now like to turn the conference over to Yvonne Briggs. Please go ahead.
Speaker 11: Thank you, operator. This is Yvonne Briggs with LHA. Good afternoon and welcome to Indra's fourth quarter 2022 Business Update and Financial Results conference call. Earlier today, Indra issued a press release on this topic, which is available in the investors section of Indra's website.
Speaker 12: Before we begin, please note that today's discussion will include forward-looking statements.
Speaker 13: All statements by management other than statements of historical facts, including statements regarding the company's strategies, financial condition, operations, costs, plans, and objectives, as well as anticipated results of development and commercialization efforts, the timing of clinical studies, potential partnership opportunities, and other financial and financial
Speaker 14: and expectations regarding regulatory processes. Receipt of required regulatory clearances and product launches are forward-looking statements.
Speaker 15: except as required by federal securities laws, the company disclaims any obligation to update or revise any forward-looking statements.
Speaker 16: Please refer to the company's Form 10-K for the 2022 fiscal year, which is expected to be filed by the end of this week, for more information about risks and uncertainties related to the forward-looking statements.
Speaker 17: In terms of the structure of today's call, Francois Michelin, Chairman and Chief Executive Officer, will begin the prepared remarks followed by Michael Thornton, ENDRAS Chief Technology Officer.
Speaker 18: Mr. Thornton will be followed by Irina Pestrakova, Senior Director of Finance, to review the fourth quarter financial results. With that said, I will now turn the call over to Francois Michelin. Francois.
Speaker 19: Thank you, Yvonne. Good afternoon, everyone, and thanks for joining us today to discuss Endra's fourth quarter financial results and business highlights.
Speaker 20: Let me start by saying that our top priority of the company is to complete the necessary Taya scans in order to submit our de novo request to the FDA.
Speaker 21: I'm excited that we've scanned over 100 subjects in 2022 and deployed our interactive software guidance tool to our global study sites last month.
Speaker 22: We're in the process of scanning the next cohort of subjects and we're seeing significant improvements in intra-operator performance in the hands of independent clinical users.
Speaker 23: There's no shortcut here. We must have the most robust clinical data that our TAYA system is capable of achieving to enable a successful FDA submission and to support our global commercial adoption.
Speaker 24: Admittedly, it's taken longer than we expected.
Speaker 25: But Endra is developing a completely new and game-changing technology, which naturally comes with some challenges.
Speaker 26: We're excited about our active clinical evaluation sites continuing to collect data with a newly deployed guidance tool and using this higher performance data to support our de novo submission as quickly as possible.
Speaker 27: As a reminder for any new listeners,
Speaker 28: Endra's thermoacoustic enhanced ultrasound or TAEUS is a proprietary technology platform.
Speaker 29: with an initial application focused on measuring liver fat for the early assessment of non-alcoholic fatty liver disease known as NAFLD.
Speaker 30: According to recent estimates, NAFLD affects over 2 billion people globally and is driven by a broad range of drivers.
Speaker 31: including obesity, diabetes, and genetics.
Speaker 32: There are currently no diagnostic tools for NAFL that combine accuracy, safety, cost effectiveness, and ease of use.
Endris-Teyus is intended to enable non-invasive characterization of tissue in ways similar to an MRI, but at the point of patient care and at about one fiftieth the cost.
TEIS is approved for sale in countries that recognize the CE mark, including those in the European Union.
In the U.S., we're diligently working towards submitting a de novo request to the FDA.
Before I turn the call over to Mike Ford and for more color on the clinical data front, I want to highlight a few other areas that will resonate with investors.
In parallel to our clinical data progress, we're maintaining a steady cadence of marketing activities including participating in 11 clinical conferences in Europe and the US last year where we showed our TEA system to hundreds of potential customers.
We've built a great pipeline of sales leads that will be catalyzed with the clinical data we're collecting.
Once we submit our FDA application, we'll synthesize the TAYUS clinical data into a white paper to enable our commercial team in Europe to close sales, while in parallel our clinical investigators submit their research to peer-reviewed publications.
I'm also very proud to say we renewed our long-standing partnership with GE Healthcare in December of 2022 for two additional years.
We've been partnered since 2016. GE is the ultrasound market leader, and we're energized by their interest in liver disease and emerging technologies like entrance.
Finally, we continue to aggressively strengthen our intellectual property portfolio to protect our technology from multiple indications.
In 2022 alone, we had 19 patents issued, bringing our portfolio to 56 globally issued patents.
Investors should know that this is a robust portfolio that includes a mix of U.S. and international patents.
balanced across method, system, and design claims with both defensive and offensive value for endro.
We have zero in-licensing dependencies.
and our average remaining patent life is over 16 years.
When we benchmarked Endra against a dozen similar microcap medical technology companies...
Endra had three times more issued patents than our peer group average.
I think that's remarkable for a company of Endris small size. As we mentioned on the last call, several Endra patents focus on novel cloud-enabled connectivity of medical devices, including Endris-Taya system.
and we're actively pursuing potential licensing opportunities of this technology to help other companies collect data from their equipment, such as laboratory equipment, which may not have an internet connection.
Okay, over to Mike Thornton now. Mike?
Thank you Francois. Let me summarize our clinical activities in 2022, where we are currently, and what we can expect in the
In 2022, our clinical study sites in North America and Europe obtained more than 100 study participant exams using our TAS clinical platform. As we shared in our Q3 update, we know that our TAS device has low measurement variation based on instrument repeatability and reproducibility studies.
Those studies show that measurement variation is less than 3% for the instrument.
and can provide consistent measurements day to day and across separately manufactured devices.
However, in 2022, we also observed that there was user variability across our clinical sites and even between users at the same site. While some of our clinical study site users were able to obtain clinical TAS measurements with high repeatability and good reproducibility that is commensurate with the clinical study site.
that guides the user in positioning the TAS probe to enable the operator to obtain measurements more reliably and with higher repeatability.
Intra and intra-operator performance is an important element in the clinical validation of a new technology and will be part of our de novo application.
We have followed through with that plan and the new training and software guidance tools have been deployed to our active clinical sites in both North America and Europe . I'm happy to say that our collaborators are actively scanning subjects and collecting data with these new tools.
To date, we've seen a significant improvement in intra operator performance with some of our users demonstrating a threefold improvement. The response from users at clinical sites has been positive with procedure time reduced significantly, typically less than 10 minutes.
As Francois mentioned, while it's taken longer than we anticipated to achieve our clinical milestones, the additional effort to ensure repeatability and reproducibility is an essential element of a successful FDA submission and it will provide Endra's commercial team with the clinical data to support early commercialization.
Now, I'd like to turn over the call to Irina to review the financial results for the fourth quarter of 2022. Irina?
Thank you, Mike. Now let's turn to our unaudited financial results for the fourth quarter and year end of 2022.
As we mentioned in the call opening, EnGir will be filing its 10K this week ahead of the March 31 deadline.
For the quarter ended December 31, 2022, our operating expenses increased to $3.3 million from $3.1 million for the same period in 2021. The increase was primarily due to an ongoing product development.
Net loss first year in the fourth quarter of 2022 was $1.04 compared with a net loss of $1.48 per share in the fourth quarter of 2021.
Overall, for the year ended December 31, 2022, our operating expenses were $13.2 million, up from $11.5 million, for the same period in 2021.
The increase was primarily due to ongoing product development and sales and marketing expenses.
Our research and development expense increased year over year by approximately $1 million due to an ongoing product development work.
Our sales and marketing expenses increased by approximately $350,000 for the year as we began to expand our sales and marketing efforts as Prince Raja described, including attending a growing number of medical conferences.
general and administrative expenses increased by approximately $230,000 due to higher professional fees.
Our net loss per share for the 2022 was $4.56 compared with a net loss of $5.55 per share a year ago.
We continue to maintain our asset-wide operating model with prudent hires in our operations team in anticipation of future growth. As we execute our regulatory and commercial strategy for TAUS, we plan to adjust the expense structure accordingly in support of these activities.
As of December 31, 2022, we had cash and cash equivalents of $4.9 million.
I'll close by saying that in light of the liquidity concerns in the banking system arising from the closure of Silicon Valley Bank and appointment of the Federal Deposit Insurance Corporation as receiver, Andra maintains cash deposits at multiple banks to mitigate the risk associated with the failure of any specific bank. Now I'll turn the call back to Francois.
Thanks very much, Irina and Mike.
In closing, here are the three messages listeners should take away from this call.
Our primary focus continues to be the effective collection of clinical data with our newly deployed software guidance to enable both a U.S. successful regulatory submission and strong global commercialization.
We're making excellent progress in this area, building on over 100 scans performed last year, with the most recent software guiding scans yielding 3x improvements in intra-operator performance.
Second, Endre has a small and experienced commercial team in Europe , and I am personally leading the commercial activities until we find a replacement for a commercial officer.
We're maintaining a steady cadence of marketing activities to build awareness of Arteus technology with a growing number of clinical specialties. These activities include participating in the key radiology, hepatology, and endocrinology clinical conferences in the U.S. and Europe .
and expanding our customer database, which now includes over 5,000 clinician names we cultivate across the globe.
And third, we renewed our partnership with GE Healthcare for two additional years, which we view as indicative of GE's interest in the liver disease space and emerging technologies such as Andrus. With that overview, I'd like to turn the call back over to the operator and open the call for questions.
Third, we renewed our partnership with GE Healthcare for two additional years, which we view as indicative of GE's interest in the liver disease space and emerging technologies such as Andros. With that overview, I'd like to turn the call back over to the operator and open the call for questions. Operator.
We will now begin the question and answer session. To ask a question you may press star then 1 on your telephone keypad. If you are using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.
Our first question comes from Vernon Bernadino with H.C. Wayne Wright and Company. Please go ahead.
Hi, Francois and everyone. Thanks for the question and congrats on the progress.
Just had a few questions. And before I forget, congrats on renewing the collaboration with GE Healthcare. I know that's important to you and to maintain the long-term relationship. You mentioned –
I had a few questions. And before I forget, congrats on renewing the collaboration with GE Healthcare. I know that's important to you and to maintain the long-term relationship. When I relatively supplies, I've gotten very upset because...
You mentioned deploying the interactive guidance tool. I was wondering if you provide any feedback from those who have used it so far. And you mentioned that the tool provides data from the tool was going to be used for the de novo request.
What kind of data is that going to be? I know it said that it's going to be scans and MRI confirmatory data is going to be used, but what exactly is the data that's going to be used from the tool?
Sure, let me touch on that and then I'll turn it over to Mike Thornton for more detail. So, correct. We deployed the system to our clinical sites in Europe and North America last year. We collected over a hundred scams and noticed that some users were able to achieve
you know, the high performance that the system is capable of and others were struggling a little bit more. And some of that we learned, which is normal in development of medical technology, is some people had to be retrained. They have a certain way of positioning probes from ultrasound or other places that isn't exactly the same for Andra, and so we had to kind of overcome some of that training. But we also...
saw that there was an opportunity to have more direct real-time guidance during the procedure. And so that's what we've developed, deployed, and are now using with the results that we're starting to see that Mike spoke of. So that data will be submitted from the existing sites. You're right, the protocols that we've described remain the same.
Our TEA system is used to scan subjects using our tool, and then that same subject is scanned within a few days or at most a few weeks on an MRI system, which despite its cost and…
impracticality for clinical use by your everyday clinician is still the gold standard in terms of research and measuring liver fat. So we want to compare ourselves to that. So the protocol for us stays the same.
The software has been deployed and our sites are…
using it, and we believe that we need to submit the very best data, i.e. the data from these software-guided procedures to the FDA, as Mike mentioned. Mike, do you have any other color that you'd like to add?
Yeah, sure. Thanks, Francois. And thank you for the question. So just to repeat again, the aim of the effort was to normalize operator performance across sites and reduce that variability within individual participant exams that we were seeing in 2022.
measurement characteristics are and we convert that into a numeric confidence score that the user now has access to and that just allows them to more confidently place the probe know that they're in the right location and obtain the necessary measurements and as I mentioned the feedbacks been very positive and the clear difference is the reduction in procedure time it just
Thank you. Thank you so much Vernon.
The next question is from Edward Wu with
Congratulations on your progress. You mentioned that you could get scans down to 10 minutes. Is that the best in terms of an ideal model or can you get more room for improvement?
I think the process will continually improve the process as you normally do over the lifecycle of a product. But we're certainly happy with the consistency amongst users, as Mike pointed out, and especially the reduction in scan time, which, by the way, is a very important part of the process.
even at 10 minutes early in the learning cycle really efficient if you compare that to an MRI for example which can be 30 to 40 minutes for example. So 10 minutes if that was as good as we could get it I think would be absolutely wonderful in the marketplace on the front lines but you know our goal is to continually improve things.
I also don't want investors to think that we're going to be fiddling around with this ad infinitum and delaying the de novo submission. I think we're at the point now with this guidance that we will be able to collect the data we need for the de novo submission as quickly as possible. And any additional improvements will be, I would say, icing on the cake.
Mike, any thoughts to add to that as well?
Yeah, maybe I'll just add that the 10 minutes also includes the ultrasound exam to locate the measurement location so and patient orientation and instruction, so I think We're doing really well and our users are and operators are performing absolutely fantastic job
That's great. Thanks. And Ed, I would also just mention that we've started having users use portable ultrasounds. Historically, we've been very sort of tied to the radiology roots and card-based ultrasounds. And I think our addressable markets and our clinical workflow were linked inextricably to the large...
card-based ultrasounds, but as probably many of our investors know, those card-based ultrasounds remain the workhorses of ultrasound, but the fast growth portability models in ultrasound are certainly something that we want to align ourselves with. And in some cases, we're finding that...
a portable ultrasound does the job just fine if the clinician wants to use that for our technology. So that helps open a few doors and reduce the capital expenses if they don't already have an ultrasound very nicely. So we're happy to see that it works across ultrasound models.
Hope that answers your questions and more.
Yes, and then my last question is congratulations on the renewal on GE Healthcare. In terms of, you know, has it disagreement or extension change at all and what benefits have you seen working with them for so long on, you know, TAUS?
Yeah, thanks. So as many of our investors know, we have a long history with GE. Many of our team, myself included, Mike Thornton, some of our board members worked at GE. And so there's a lot of trust and relationship there. We signed a collaborative agreement with GE.
and capital equipment support to finalize the equipment, understand from their perspective some of the user needs, and better help us understand the marketplace.
Over time, that relationship has also expanded to introducing us to some of their radiology-based clinical users who have ultrasounds, and we've been very grateful for that. And so some of the people that we have in our list of collaborations have also strong w asc Advanced Clinical Lumens University conv OPEN TELLER
want to control our own destiny and certainly beyond radiology, which is GE's focus, endrosy is a growing opportunity in hepatology, the liver experts who don't currently use much ultrasound and even beyond that to the fast-growing field of endocrinology, again a field that
illustrating that. And so we view this hybrid relationship of working with GE long term, having them as a partner in radiology and then being able to guide ourselves very accurately beyond radiology that we think is a benefit to ourselves and to investors. I hope that helps. That's very helpful. Thank you and I wish you guys good luck. Thank you.
Thank you so much, Ed. Operator, if we don't have any more questions, I think we'll close the call. So I want to thank all our listeners and the ENRA team for participating today, and we look forward to keeping you updated and speaking with you on our next quarterly call.
Have a good evening. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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