Q1 2023 Aspira Women's Health Inc Earnings Call
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Speaker 2: Following management prepared remarks, we will open the call for your questions. At that time, if you have a question, please press the one followed by the four on your telephone.
Speaker 2: If at any time during the conference you need to reach an operator, please press star and zero. As a reminder, this call is being reported today. Leaving the call today are Nicole Sanford, President and Chief Executive Officer, Marlene McClellan, Interim Chief Financial Officer, and Dr. Ryan Fawn, Chief Science of the Executive Officer, and Chief Operating Officer.
Speaker 2: After the deferred remarks, we will open the call for Q and A.
Speaker 2: Before we begin, I would like to remind everyone that forward-looking statements as defined under the Private Security's Revocation Reform Act of 1995 will be made during this call, including statements relating to as far as expected future performance, future business projects and future events or plans.
Speaker 2: All of the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions. Actual outcomes and results are subject to risks and uncertainties and could differ materially from those anticipated due to the impact of many factors beyond aspire our women's health control.
Speaker 2: The company assumes no obligations to update or supplement any forwardless indictments, whether as a result of new information, future events, or otherwise, except as required by law. Participants are directed to the cautionary note set forth in today's press release, as well as the risk factors set forth in the Fire as most recent annual report on Form 10 case.
Speaker 2: and quarterly report on Form 10Q filed with the FAC for description of factors that cause actual results to differ materially from those anticipated in the forerboking statements.
Speaker 2: At this time, I'd like to turn the call over to Nicole Sandford, President and Chief Executive Officer. Please go ahead.
Speaker 3: Thank you, operator. Good afternoon, everyone. I would like to welcome you to our first quarter of 2023 conference call. With me today, our Dr. Ryan Zan, our Chief Scientific and Operating Officer, and Marlene McLean, our interim chief financial officer. Thank you.
Speaker 3: After my prepared remarks, Ryan and Marlene will provide a brief update on our product portfolio and financial performance respectively before we open the call for questions.
Speaker 3: But they began with a review of our performance disorder.
Speaker 3: In the few weeks since our 2022 year-end earnings call, we have continued to make progress on a number of fronts. Our sales and revenues for the quarter, who we then part from the launch of Overwatch in December , which are new record highs.
Speaker 3: A total of 491 overlaps test were performed in the first full quarter after launch, contributing about 8% to the total over-sleep volume.
Speaker 3: Our strategy has been to leverage the trust and brand recognition that has been established with OGOMFUS for a rapid adoption of Overwatch by the OB-GYN community.
Speaker 3: Total product volume increased 29% over the first quarter of last year. One of the strongest performances ever recorded by the company.
Speaker 3: Our pivot to a more position focused portfolio approach and awareness marketing for the entire oversuitive test here to be effective.
Speaker 3: We have also seen progress with Alternative Sales Channel, such as our relationship with BioRef and Flabatories and our Spirits Energy Relationship.
Speaker 3: As a result of these efforts, we achieved volume growth while simultaneously cutting sales and marketing expenses by 43%. And near resembling the number of tests per full-time sales representatives from 173 to 348.
Speaker 3: We also saw increases in our new ordering positions and average daily test volumes.
Speaker 3: As with common with newly launched products, the majority of overwatch tests in the first quarter were not covered by insurance, which led to larger number of patient cell accounts.
Speaker 3: Our historical collection patterns appear to be holding across the Overseas portfolio. However, we expect the shift in product volume to create some solatility in the average selling price bar cap for the rest of the year.
Speaker 3: We are focusing on securing robbery and reimbursement as a key driver to revenue growth and announced in March that Overwatch will be covered under our existing contract for the leading national payer.
Speaker 3: In addition, our Overwatch-specific PLA code went into effect on April 1st. We expect to make an announcement regarding the publication of a sponsored Overwatch Clinical Utility Study at the coming weeks, and plan to use that as an accelerator to continue our progress with the remaining national pairs for Overwatch Plus.
Speaker 3: and as a catalyst for the expansion of coverage for Overwatch.
Speaker 3: While we are confident that our reimbursement strategy will be successful, we cannot control the timing of payer coverage decisions. We intend to continue aggressively driving provider adoption as we execute upon our strategy and will closely monitor the resulting impact on our cash needs. Let me now turn to our progress on our operational performance.
Speaker 3: I believe it remains prudent to extend our cash runway as much as possible through strategic reductions and discretionary spending.
Speaker 3: As a result of the personnel cuts in 2022 and continued focus on cost containment, the significantly reduced our net operating cash spending in the first quarter to 5.7 million compared to 10.2 million in the first quarter of last year.
Speaker 3: We really iterate our operating cash utilization target for the remainder of 2023 to be between 10.3 and 13.3 million.
Speaker 3: Given our first quarter ending cash balance of 7.5 million, we are keenly aware of the need to identify additional sources of liquidity.
Speaker 3: We continue to meet with potential partners and I'm pleased to see the positive neural momentum the launch of overlaps has created.
Speaker 3: We have proven ourselves to be capable of launching innovative diagnostic products to address unmetting and gynecologic health.
Speaker 3: We are in a stronger position for partnership discussions that at any time can be an achievement.
Speaker 3: We have increased our efforts to attract investors and partners since the beginning of the year and we'll continue to make that a top priority.
Speaker 3: In the meantime, we have significantly increased our access to just-in-time capital by 22.5 million of the quarter by implementing an ATM cell agreement with Cantrifice Gerald and securing a committed stock purchase agreement with Lincoln Park Capital. We intend to utilize these facilities prudently over the next one to three years to close funding gaps.
Speaker 3: These are valuable tools that provide access to the market and an attractive cost of capital, especially compared to transactions that have been closed by microcaps companies in recent months. A Spiror's strategy in science to sound and has helped us to attract talent and retain our top performers.
Speaker 3: Our attrition remains very low. We were also able to attract three outstanding new board members, Stephanie Kavanaugh, Danny Hurtchuck, and Lynn O'Connor-Boss. They bring the experience and passion we need in these challenging times.
Speaker 3: With that, it is now my pleasure to turn the call over to Ryan for a closer look at our product portfolio.
Speaker 4: Thank you, Nicole. I am very pleased to say that we continue to make progress on the development plan.
Speaker 4: Let me begin with Overwatch. Overwatch has been very well received by physician since the recent launch in December last year. As it provides a personalized read assessment for women presenting what that acts to master.
Speaker 4: The Overwatch clinical validation manuscript was accepted for publication in January . This peer review publication in the frontiers in medicine provides re-war evidence for vision can be confident in utilizing Overwatch in the management of an astromasis, including the separately decreased premature ovary removal.
Speaker 4: and reduce surgical backlog. As excited as we are to have Overwatch available to patients, our work is not done. Overwatch's true benefit lies with its potential as a seromodifying test for managing an extra margin.
Speaker 4: Currently, physicians use Overwatch as a one-time test to determine the clinical management application, including whether a woman can continue to be monitored or needs additional workup or surgical consideration.
Speaker 4: Physicians would yield overwatch multiple times to follow up on the woman's natural mass status. This personalized risk was to guide the physician decision to monitor the mass or to refer her traditional testing or surgery. We continue to follow and grow patients in the prospective overwatched Monk High Center clinical study, be additional periodic blood draws. As a result, we are collecting real-world evidence to support the use of overwatched at the zero monitoring essay. We anticipate this phase of the study to be committed in the third quarter of this year.
Speaker 4: Moving to endo-check or in development non-invasive test to aid the diagnosis of endometriosis. We are making progress on both the internal development efforts and the development program with a consortium of institutions led by Harvard Dana-Farber Cancer Institute.
Speaker 4: Starting with our internal development process, we recently succeeded in identifying and cataloging the last number of patient samples from our own bio bank. This is a significant milestone given the previous concerns about the adequacy of available sample needed for the development of our assay.
Speaker 4: We are in the process of validating our tests using those samples.
Speaker 4: We remain focused on a launch of the first generation endometriosis essay in the second half of this year.
Speaker 4: With respect to our partnership with Dana Farber, the endometriosis research collaboration continues to be productive. Through our collective efforts, we have obtained sufficient cohort data in the air polliners to move forward.
Speaker 4: This project is on track to meet experts development goals for 2023.
Speaker 4: Turning to the recent announcement on our partnership with the Interferber Cancer Institute, we are very excited to expand the collaboration to include the development of a Michael Arne based Oven Cancer Test.
Speaker 4: Because microRNAs are easy to extract from blood samples and appear earlier compared with other testing targets, like circling tumor cells or proteins, they are a good target for an early stage diagnostic test.
Speaker 4: This new non-invaded molecular base which assessment test will become part of our over-suite portfolio.
Speaker 4: We look forward to having a deeper discussion on our portfolio during the investor R&B day on May 23rd, featuring our physician collaborator, Lutter Kevin Elliott, the Harvard Medical School of Gynecology Professor.
Speaker 3: I will now turn to Moline for discussion of financial performance. Moline. Thank you, Ryan. Product revenue for the three months ended March 31, 2023 with 2.3 million, an increase of 26 percent compared to 1.8 million for the same period in 2022.
Speaker 3: The increase in revenue was primarily driven by an increase in over suite tests performed during the quarter, which increased 29% to 6,259 compared to 4,846 for the same period in 2022. The new per over suite test performed for three months ended March 31st, 2020.
Speaker 3: Total profit margin was 61.4% for the three months and then March 31, 2023 compared to 50.8% for the same period in 2022. Research and development expenses for the three months and then March 31, 2023 were 1.2 million.
Speaker 3: for three months and did March 31st, 2023, for $2.6 million, a decrease of 43% compared to the same period in 2022. The decrease was primarily due to a decrease in personnel costs, including severance related to our Salesforce reorganization.
Speaker 3: a decrease of 27% compared to the same period in 2022. The decrease was primarily due to reductions in personnel, consultants and outside legal costs.
Speaker 3: Total cash and cash equivalent as of March 31st, 2023 was approximately 7.5 million.
Speaker 3: 23 was 5.7 million compared to 10.2 million for the same period in 2022.
Speaker 3: This is the result of cost cut-in and personnel realignment activities taken in 2022. In February , we secured an ATM sales agreement for $12.5 million. And in March, we secured a committed soft purchase agreement for $10 million.
Speaker 3: As Nicole mentioned, we intend to utilize these facilities on an as needed basis over the next one to three years to close funding gaps.
Speaker 3: total of $162,000 in proceeds for these agreements in the first quarter. I will now turn it back over to Nicole.
Speaker 3: Thank you, Marlene. May 8th was World Ovarian Cancer Day, which presented an opportunity to reflect on the needs for better ovarian cancer diagnostic tools and the resulting potential for our business. We are extremely proud of the work we are doing to improve health outcomes for women and are excited to continue our forward progress across our strategic growth, innovation, and operational excellence goals. With that, I would now like to open the call for questions. Operator? I would now like to turn the conference over to Marlene. Actually, no, I think we are ready to open for questions.
Speaker 3: from a wide variety of sources and considered alternatives that would be most likely to allow us to remain in compliance with NASDAQ listing standards and protect the interests of our existing shareholders. Our Board of Directors approved a 1 for 15 split, reverse split, that was announced earlier today and will be effective at the start of trading tomorrow morning. We remain optimistic that upcoming milestones, including the expansion of Overwatch as a serial monitoring test and the launch of a first generation endometriosis test, among others, will have a meaningful impact on a Spyrus-based performance to the end of the year and beyond. We are ready to look towards the future.
Speaker 3: I remain firmly committed to transparency with you, our shareholders, and focus on the execution of our strategies.
Speaker 3: submitted to transparency with you are shareholders and focus execution of our strategy. With that, I will open for questions. Thank you.
Speaker 3: about how this launch is allowed for you to open new doors into accounts you maybe previously weren't able to get into. Sure, thanks Maggie. Appreciate the question. We've seen pretty broad interest in overlaps. Candidly, the positions have been...
Speaker 3: interested in a test like this and in this test in particular. We've been climbing the pump for a while now. So we've had a lot of interest from our existing physicians. We had a record number of new positions, new ordering positions in the first quarter. And of course, some piece of that was related to Overwatch. So it's been helpful on both fronts in terms of
Speaker 3: driving repeat order physicians and bringing new physicians on board. And just quickly adding to that, we said that we really believe that the brand and trust that we built up with physicians with OV-1FUS would create a great springboard and platform when we launched OV-WATCH and so far.
Speaker 2: that strategy has proven to be sound. Great, thanks for that. And then just on the spend here, so it looks like another solid porter of moderation. As you think about perhaps increasing spend, what specific areas are you eyeing and how are you evaluating potential ROI on that spend?
Speaker 3: I think that we would really focus on accelerating the remaining steps on development for products that are in the portfolio. So, or in development, for example, we would want to open additional sites for the endometriosis study, which we think will be helpful.
Speaker 3: not only in our first generation test, which we have committed to launching by the end of the year, but for every, for the add-on test that we expect to be part of that portfolio in the future. That certainly would be one area that we would love to add resources.
Speaker 2: Great, thanks so much.
Speaker 5: The next question comes from Sally with Water Tower. Please proceed with your question. Hello. Oh, yes, hello.
Speaker 6: I mean, do you expect sort of the same volume of tests to be sold in the next quarter? I mean, that's over the huge jump it was. I mean, do you think you're sort of at that kind of corley level or do you expect it to further increase?
Speaker 3: focused on physician educational events and conferences. That continues to be a priority for us. We're in conference season right now. We will be out and about in presenting and holding products round tables and theaters and other ways to present the test large position groups. And we had seen that after we attend and present at one of those events, we see a significant bump after that. So we're feeling confident that that shift in focus has been appropriate. Okay, good. And then in terms of the marketing partner with Oregon on.
Speaker 6: You expect some sort of some commercial sales this quarter
Speaker 6: Do you have any idea when they're going to launch, or are they doing a full launch meeting or anything like that? So I'm not sure what we don't have a...
Speaker 3: an announced partnership with Oregon on you may be referring to our relationship with bio reference laboratories that we want. Yeah, okay. Yeah Yeah, yeah. Yep, so that continues to gain momentum Our sales team is working very closely with their sales team good and and that's been very positive in terms of one of the drivers frankly for the increase in the test volume for sales rep
Speaker 3: Because the other channels are starting to produce more test volumes, so we can get volume without adding a lot of cost and head counts. So we're feeling pretty confident in this LC that we have and the momentum that we're getting from our alternative channels.
Speaker 3: channels are starting to produce more test volume so we can get volume without adding a lot of cost and headcount. So we're feeling pretty confident in the sales team that we have and the momentum that we're getting from our alternative channels. Okay, great. Well, thank you very much.
Speaker 5: No, thanks for joining, Sally. And there are no further questions at this time. I'll turn the presentation back to the host.
Speaker 3: Well, thank you, everyone. I just want to take another opportunity to thank you for joining us and encourage you to register for our May 23rd event. You'll hear more about our forward progress.
Speaker 3: across our three strategic priorities. Those have not changed growth innovation and operational excellence. And we'll give you additional color, commentary and detail around the expansion of our product portfolios. So please make sure you join us then. And thanks so much for being here. Thank you.
Speaker 5: That does include today's conference. We thank you for your participation and ask that you please disconnect your line.
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