Q2 2023 Hyperfine Inc Earnings Call
This is an exciting project for us and represents a step forward in pursuing the use of the <unk> system in triage in acute stroke.
In pediatrics, we were.
Since we announced the completion of enrolment in the hope TMR study of 150 patient observational multi center study imaging pediatrics hydrocephalus patients with a <unk> system.
Hydrocephalus is the accumulation of too much fluid in the brain and children with these neurological disorder needs to be scanned frequently over many years.
It's a very desirable scanning modality to prevent frequent exposure to radiation using PT.
These 150 patient study led by Dr. Geoff Lenard from nationwide children's hospital used to evaluate the safety of using the <unk> system to image patients with different shunt.
Ah said particular size compared to high field scanners and assessed the safety of using the system to image hydrocephalus patients in the emergency Department.
Publications and presentations or being prepared to share the results of the study with the scientific community, which we expect to see late this year.
And relevant to our core use case today imaging patients in critical care. We are participating in a study called safe MRI study to evaluate the imaging of patients on extra corporeal membrane oxygenation or advanced life support.
Ecmo with our soup system.
So system potentially off course, ecmo patients brain imaging opportunity otherwise not available if they are unable to be transported to the MRI suite put conventional scam.
Expect to see data from this study presented at the <unk> meeting in Seoul, South Korea in early November .
Looking further ahead, we see a potentially large new opportunity for the MRI industry with a recent development in the treatment of Alzheimer's with a full FDA approval Biogen like Kennedy.
Positive results published in Jama community the anonymous.
The labeling of these new drugs requires multiple infrequent patient MRI scans at baseline and throughout the treatment to monitor potential risks, mainly amyloid related imaging abnormalities or ARIA, which are abnormal differences.
Our imaging of the brain in patients with all climbers CV.
We believe the point of care system can offer a highly differentiated cost effective and accessible can we shouldn't cause he can use case.
We're currently in the early stages of planning technical feasibility studies with current two system users as well as our sales development efforts around sequences required for the imaging of patients on these new Alzheimers scrubbed.
Turning to commercial expansion our U S. Commercial team is gaining experience as we strengthen our relationships with U S Hospital systems and broaden our pipeline.
We have further deteriorated the makeup of our field force.
Now have established three dedicated team focused on selling.
Implementation and utilization.
We believe this structure position us well to drive system sales support successful programs.
Spanned our network of reference sites.
In the second quarter, we fulfilled the outstanding deliveries associated with our 2022 purchase order from Kings College, London, which was supported by grant funding from the Bill and Melinda Gates Foundation.
During Q2, we also secured a new grant for $3 million over the next three years to fund the support for research and clinical activities and the servicing of the systems in the United program and initiatives funded like the dealer Melinda Gates Foundation in low and middle income countries.
Also on the international content in Q2 I S. R M. The international probably deeper magnetic resonance in medicine meeting was held late in the quarter in Toronto.
The highlight of this premier them, our society annual gathering revolves around low and ultra low field scanning and we generated substantial interest at our booth I Didnt Titan whose expression.
On the Friday of I S. MRM, we participated in a meeting organized by King's College, London, and low and Middle income countries site Representatives from the Bill and Melinda Gates Foundation network to discuss the many challenges and opportunities and patient access to MRI images.
Global commercial expansion remains a truly compelling long term opportunity for us as well.
As we enter the third quarter, having completed several recent successful international activities, our focus as we've seen our core U S market opportunity. We're actively engaged with several U S Hospital systems, mainly focus on critical care and pediatric targets.
Our team continues to mature and gather experience.
As we build this new ultra low field brain imaging market.
All encouraged by the early positive clinical and economic feedback from existing and prospective U S accounts.
<unk> customer facing webinar.
We're pleased to have two active users from prominent institution sure Theres strong views on the economic value of soup with several key takeaways, including substantial time savings for patients and staff increased outpatient scanning volume and revenue and overall improve patient.
Satisfaction.
Before I turn the line over to Brett I'd like to reiterate that alongside our three strategic pillars. We remain laser focused on spending discipline will continue to operate.
And implement initiatives and so forth.
Sort of cash runway extension, while still investing in innovation clinical evidence and commercial expansion.
We continue to see our cash runway for the business through 2025.
I will now turn the call over to Bret Taylor, our Chief administrative officer, and Chief Financial Officer, who will review, our second quarter performance and discuss our financial outlook in greater detail.
Thank you Maria turning to our financial results for the second quarter 2023 revenue for the quarter ended June 32023 was $3 4 million compared to $1 5 million in the second quarter of 2022.
Gross profit for the second quarter of 2023 was one 4 million compared to negative <unk> 2 million in the second quarter of 2022, and reflecting a 43% gross margin.
R&D expenses for the second quarter of 2023 were $5 3 million compared to $7 3 billion in the second quarter of 2022.
Sales general and administrative expenses for the second quarter of 2023 were $7 8 million compared to $15 7 million in the second quarter of 2022.
Net loss for the second quarter was $10 6 million equating to a net loss of <unk> 15 per share as compared to a net loss of $23 1 million or a net loss of 33 per share for the same period of the prior year.
Our cash burn in the second quarter was $10 1 million and we ended the second quarter of 2023 with $93 9 million in cash and cash equivalents.
Turning to our 2023 outlook, we are opting to maintain our full year expectation for $10 million to $14 million in revenue.
Our approach to guidance incorporates our progress as we build and lead this new market for point of care MRI imaging and sell systems into a new cycle for our customers.
We know our clinical value proposition with customers is strong and we remain confident and steady price improvement in the back half of the year and going forward.
For the year, we continue to expect gross margins to be approximately 40% to 50% as we began recognizing scale and average swoop, so swoop system pricing those gradually higher.
And lastly, we are maintaining expectations for a total cash burn of $40 million to $45 million for the full year 2023.
This incorporates an expectation for continued investment in R&D and substantially streamlined investments in SG&A versus history, while we maintain customer facing resources to continue to drive adoption and growth.
In line with this we've allocated a greater relative portion of Opex spendings to R&D in 2023 versus 2022 with R&D spending projected to be approximately 40% to 50% of total opex dollars. This year.
We will continue to focus on our three strategic pillars and maintain spending discipline.
We are excited about the momentum we are building for the remainder of the Europe beyond and we are pleased to have the cash and flexibility to invest in the right areas for continued swoop system adoption.
At this point I'd like to turn the call back to Maria for closing comments.
Thank you Brad.
I'm proud of the progress of Hyperfine team has made in recent months and I am very optimistic as to what this team can deliver before closing in on the note of our team I would like to celebrate a recent change within our leadership structure.
Typically the promotion of Tom severe pour money, our chief product officer to Chief operating officer.
In his expanded role Dr. <unk> will now oversee product design and development clinical science operations cyber security and technical perfect.
It's two years with the company Tom has overcame substantial improvement in image quality through multiple and frequent AI power software releases and the development of a robust product roadmap of future air powered software and hardware products.
This contribution.
<unk> core operational execution I have set a high bar of excellence.
We look forward to the many achievements he's ongoing either ship went great.
With that I wouldn't have thank you for your time and open the line for questions.
To ask a question you will need to press star one on your telephone to withdraw your question. Please press star one again.
Please standby, we compile the Q&A roster.
One moment for our first question.
Our first question comes from the line of Larry <unk> from Wells Fargo. Your line is open.
Hi, This is Charles on for Larry first congrats on a nice quarter I wanted to ask about your second half expectations here. So you had.
6 million in the first half and you maintained your guide, which implies about $6 million at the midpoint to the SEC.
During the half which is essentially flat.
What assumptions are kind of baked into this is this conservatism or are there any particular headwinds or I mean, maybe the case.
Kings College orders fulfilled already or maybe there is seasonality in the second half you could talk about that.
Cause I can see either flat or just not not improve over the first half sales and then I have a quick follow up.
Sure. So let me let me start with some comments then I'll, let Brian to add on to this so we have chosen to be prudent with our guidance. We continue to see nice momentum in how we're building really the U S pipeline and we see the U S will will definitely.
Drive a lot of our success in the second half now that we have completed all of the shipments in the King's College, London, which was funded with a grant from Bill and Melinda Gates there.
There is always a little bit of a summer potential variability or even seasonality, we're not seeing something too dramatic but again couldn't put into two at least account for some of that that could still happen in the next few few weeks.
But again the momentum is strong and the momentum around pricing that's with message continues to be stronger and we expect that pricing will continue to improve through the second half of the year and as we've made some changes to our field force in the U S. We also expect that that will continue to pay dividends at SOCAR team gathers.
More more seasoning and more experience in the field. The one thing I'd like to remind a nice things we're seeing.
From our opening remarks is that we are building a new market. We're not just competing in an existing market and and that is a big undertaking that comes with some variability and some some sort of <unk> so bad.
That has driven us to be to be prudent in the way we are reiterating guidance, Brett just feel free to add any other commentary.
No. Thanks, Brian I think I would echo those comments that we are building a new market and given.
New markets and some variability we wanted to maintain a prudent approach to our outlook.
Okay understandable. Thank you for that and then what.
Quick follow up on I Wonder, if you might be able to give.
Early thoughts on 'twenty, two 'twenty three I know, it's far too early for formal guidance, but maybe if you might be able to talk at a high level about potential tailwind or headset wins, you might see might expect to see in 2023, including like the software upgrade.
<unk> and the changes you've made at the field force things like that how to think about.
Next year.
Okay. So I assume you meant 24.
44, sorry, yes, yes.
It's definitely it is too early to you, but that's how I think about what we're doing in terms of investing and there are three pillars that are drivers of our business, So innovation and clinical evidence and commercial expansion.
More time should only allow us to continue to make greater progress against.
Again, the pricing trend is favorable and gets a little bit better every quarter.
We'll have by early 2020 for yet a new version of our software and we have other programs as we said it would be later this year that we give you all more visibility to our product roadmap for 2024.
As we mentioned on all of the clinical studies that we are funding and supporting and being involved in.
We see the data from the.
Safe.
Ecmo at the very end of this year would you say an important study for the work we're doing in critical care, we're going to see the publication and the presentation of the data from the hope TMR, which supports a pediatric use through the balance of this year along with the three things.
He was hoping to achieve which was demonstrating the safety of using our system with a variety of different kinds of sun.
The ability of park system to allow clinicians to assess and treat their volume changes and last but not least the ability to use our system in a variety of settings.
There's some anywhere from on a hospital by hospital like a kid to adjust emergency department visits so all of these data.
In 2024, I think we'd be coming now.
In the fourth quarter for all intents and purposes, we'll see more traction from action TMR, So I don't foresee.
Headwinds I foresee more tailwind, but it's probably too early to be any more precise than that.
Okay I appreciate it and again congrats on a nice quarter.
Thank you.
Enrollment for next question.
Our next question comes the line of Neel.
Neil Chatterji from B Riley your line is open.
Hi, good afternoon, thanks for taking the questions.
Maybe just first.
Any color you could provide just kind of on the makeup of the kind of the 14 orders in the quarter.
Maybe you guys as far as like institution type of.
That came from the B J C. You are king agreements.
And in Italy.
Update on expectations for the sales funnel in the back half, including Kingston BGC.
Yeah.
Including sorry, say that again, Neal I didn't catch the J&J and B J P.
Sure.
So we're not going to provide the geographic split up the 14 order. So we usually don't do that so no different this time fair to say that the second quarter was.
Dominated by our international shipments as we have said publicly that we have completed now all of the shipments in the King's College 2020 to order.
That should not really factor into anything in the second half.
Is that is now completed we had a busy.
Q2, one international as we were deep with the Bill and Melinda Gates negotiating the third grant. We also had a I S MRM and I'm again completed the shipments of the outstanding AR.
Like this.
That's Kings College order, so it's fair to say that the second half we have.
The more U S than international and that's going to be also a result of some of the changes that we have made and and and the hiring of a new and different kinds of people to accomplish the three different things we need to do commercially in the U S and then gaining them.
More experience and I believe that actually accelerating and broadening the pipeline of deals, which we're starting to see us as we're moving here even through the weeks of the third quarter.
Fred anything I have missed.
No I think that summarizes well.
Great. Thanks.
And then maybe just if you could maybe just.
Talk about the progress you've seen kind of on the software improvement side.
Can you elaborate.
And kind of the AI and deep learning development.
Anything high level, you could potentially share on on what that software update nearly 24 could could address.
Sure. So we feel really good about the feedback we're getting from the Lakers that is now in the appeal, which we rolled out to sites in the March April timeframe.
We see that primarily around the BWI a sequence.
As we think about how we're driving software in the future. We really have three levers to go we have the actual team that developed sequences.
We also have a software team and very very plugged into all of that effort, it's an AI team.
Also I believe doing more around being collaborative with the outside world on sequence optimization through some of the research collaborations we have so I'd like to think that we're moving from just finished quality improvements meals to something that ive chosen to label image performance.
Because we're incorporating not only quality, but really how AI and deep learning enhances the images and the ability for the images to inform decision, making at the clinical level and in some cases, it's not just about the quality of the images, but also the time to cost us. So we know on the acute stroke sites.
The time to generate images, it's going to be important and we are all very conscious of that and we're also turning our development efforts not only on just better quality because we feel we have that quality that is required by producing the same quality images at a fraction of the time that it takes right now.
We are funding and I think it works in our prepared remarks as well a number of.
Visibility efforts around the images that we don't have right now in our portfolio and that we'd probably take a little bit longer than just the next revision of our image performance, which was focused primarily on DWI.
But the feasibility work will start bearing fruit later in 'twenty four I mean to have 25 around some things that that will continue to position us well to broaden our use cases.
And some of those are around all fine, but there are other areas as well.
Great that's it for me.
Thank you.
Thank you.
Thank you and I'm not showing anything any further questions in the queue I would like to turn the conference back over to Maria <unk> for any closing remarks.
I just want to close by thanking you all for your interest in hyper find and look forward to updating you in another quarter. Thank you very much.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
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Good afternoon, welcome to Hyperfine second quarter 2023 earnings conference call.
All participants are in a listen only mode, we will be facilitating a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes I would now like.
Turn the call over to Mary Marissa Bys from Gilmartin group for introductory disclosures.
Great. Thank you for joining today's call.
Earlier today Hyperfine, Inc, released financial results for the quarter ended June 32023.
A copy of the press release is available on the company's website as well as the SEC Doc as.
Before we begin I'd like to remind you that management will make statements. During the call that include forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.
Any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements.
All forward looking statements, including without limitation those relating to our operating trends and future financial performance expense management expectations for hiring training and adoption krasnow organization market opportunity commercial and international expansion regulatory approval and product development.
Based upon our current estimates and various assumptions.
These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements. Accordingly, you should not place undue reliance on these statements.
Our lesson description of the risks and uncertainties associated with our business. Please refer to the risk factors section of our latest periodic filing with the Securities and Exchange Commission.
This conference call contains time sensitive information and accurate only as of the live broadcast today August 14 2023.
<unk>, Inc, disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.
And with that I will turn the call over to Maria <unk>, President and Chief Executive Officer.
Good afternoon, and thank you all.
All for joining us on the call with me today are Keith.
So the bulk of her and keep the national office of bright hail.
Like late last year, we have realized the benefits of our meeting.
Peninsula, Michigan and the organization has the newberg and meaningfully improve the Nashville quote by it.
We have nearly doubled our revenue on a year over year basis demonstrates it homegrown and healthy gross market margin progression and dramatically reduce our spending our net cash burn while continuing to me, but you know core value drivers.
I am very proud of the execution of the team and the result in class formation.
National profile.
Lastly for our business.
In the second quarter, we made substantial progress on our mission achieving record revenue of $3 4 million with the sale of 14 commercial Simpson.
Our performance was driven by strong international marketplace in commercial activity in part through our collaboration with Kings College, London, While we continued to strengthen our team and commercial pipeline in the U S.
During the second quarter, we also saw meaningful progress against our three strategic pillars innovation clinical evidence and commercial expansion.
On innovation, we are continuing development efforts across all elements of the Coke system.
These include significant investments in hardware and AI driven software to further advance the image quality and clinical utility of ultra low field MRI.
We have dedicated programs and product teams across this area and we are pleased with our strong cadence with Goldman Copeland our team has implemented year to date.
As part of the improvement we have been upgrading our proprietary AI and deep learning algorithm, which are central to the process image generation with the system and are adding significant value to the utility of our platform.
This system integrates deep learning a form of artificial intelligence as a component of image processing for key one T too unclear sequences.
Our future product roadmap also includes the development of an AI algorithm for our W. Gwi's, England.
The integration of deep learning does not require any additional steps from the user as a result deep learning in telecom, the English qualities and consequently, the diagnostic value of images generated adult Colo field.
The algorithms are designed to improve the image quality of our scan output, while reducing the impact of Dan argued Hawks.
<unk> was created with these algorithms have been validated by expert radiologist.
As we move forward, we are continuously investing and improving our AI driven.
Image quality leveraging each imaging focused software will lead to further improve system.
System performance.
We've already got software pipeline, we launched our latest software earlier this year and rounded out to accounts in March and April .
Today, we're pleased to share that we plan to launch another software upgrades by early 2024.
Rather than cool.
Our system offers.
Also soft launching software update it's a straightforward pardon Kim on customers with most U S. Commercial systems' operating connected site or new updates are downloaded remotely without the need for PDL team or technician intervention.
We look forward to sharing progress towards the launch of our next the AI driven software and later this year provides visibility to our product roadmap for 2024.
Now turning to clinical evidence.
Today, I would like to share more detail on the clinical evidence work, we are doing across the breadth of applications of our technology, we're actively collaborating with leading U S and internationally cushions on multiple scientific research and clinical studies.
These include early stage activities exploring future market opportunities as well as several studies that are directly.
Reported.
The clinical use cases, we're focused on today.
We recently took the next step toward declining our potential in the U K by commencing our auction TMR study a multi center evaluation that will assess the use of the system.
Stroke patients.
We are excited to abate sue that all four sites.
The necessary approval documentation and equipment to start involvement and one sided oxiclean volume patient today.
As we prepare to fully address the stroke opportunity with vocal appointed a stroke Advisory committee, consisting of leading clinicians in the field of stroke neurology.
Intervention radiology, neuro vascular surgery and interventional radiology.
Inside that guidance will help us shape, our strategy to best address the needs of patients and clinicians in the space.
This is an exciting project for us and represent a step forward in pursuing the use of the subsystem and triage in acute stroke.
In pediatrics.
Recently, we announced the completion of enrolment in the hope study.
150 patient observational multi center study imaging pediatric hydrocephalus patients with a <unk> system.
As I said, it's the accumulation of too much fluid in the brain.
And children with these neurological disorder need to be scan frequency over many years MRI.
MRI is a very desirable gathering modality to prevent frequent exposure to radiation using C T.
The goal of at least 150 patient study led by Dr. Geoff Lenard from nationwide children's hospital used to evaluate the safety of using the <unk>.
Image patients with different Sean.
A third ventricular size compared to high field scanners.
The safety of using the system to image hydrocephalus patients in the emergency Department.
Several publications and presentations of being prepared to share the results of that study with the scientific community, which we expect to see late this year.
And relevant to our core use case today.
Switching patients in critical care, we are participating in a study called the safe MRI.
Study to evaluate the imaging of patients on extra corporeal membrane oxygenation or advanced life support.
Ecmo with our soup system.
So system perpetually off course, ecmo patients a brain imaging opportunity otherwise not available if they are unable to be transported to the MRI suite put conventional scan we.
We expect to see data from this study presented at the <unk> meeting in Seoul, South Korea in early November .
Looking further ahead, we see a potentially large new opportunity could be MRI industry with the recent developments in the treatment of Alzheimer's with a full FDA approval Biogen Mckenzie and the positive results published in Jama community the anonymous.
The labeling of these new drugs require multiple infrequent patient MRI scans at baseline and throughout the treatment to monitor potential risks, mainly amyloid related imaging abnormality or ARIA, which are abnormal differences.
Or imaging of the brain in patients with all partners.
We believe the point of care soup system can offer a highly differentiated cost effective and accessible solution could be used case.
We're currently in the early stages of planning clinical feasibility studies with current two.
System users as well.
Development efforts around sequences required for the imaging of patients on these new Alzheimers scribe.
Turning to commercial expansion our U S. Commercial team is gaining experience as we strengthen our relationships with U S Hospital systems and broaden our pipeline.
We have further deteriorated the makeup of our field force and now have established three dedicated team focused on selling <unk>.
Limitation and utilization.
This structure position us well to drive system sales support successful programs and expand our network of reference site.
In the second quarter, we fulfilled the outstanding deliveries associated with our 2022 purchase order from Kings College, London, which was supported by grant funding from the Bill and Melinda Gates Foundation.
During Q2, we also secured a new grant for $3 million over the next three years to fund the support of research and clinical activities and the servicing of the systems and the Unity program an initiative funded like the dealer Melinda Gates Foundation in low and middle income countries.
Also on the international content Q2, I S or an international quite a deeper magnetic resonance in medicine.
Can you walk held late in the quarter in Toronto.
The highlight of the Premier EMR Society annual gathering revolves around low and ultra low field testing.
Generated substantial interest at our booth and in scientific session.
On the Friday of I S. MRM, we participated in a meeting organized by King's College, London, and low and mid income countryside Representatives from the Bill Amendment decades Foundation network to discuss the many challenges and opportunities and patient access to energy.
Global commercial expansion remains a truly compelling long term opportunity for us as well.
As we entered the third quarter, having completed several recent successful international activities, our focus within our core U S market opportunity. We're actively engaged with several U S Hospital system, mainly focus on critical care and pediatric target off our team continues to mature.
Gather experience.
As we build this new ultra low field brain imaging market. We are encouraged by the early positive clinical and economic feedback from existing and prospective U S accounts.
Our recent customer facing webinar, we were pleased to have two active users from prominent institution sure. There are strong views on the economic value of soup with several key takeaways, including substantial time savings for patients and staff increased outpatient scanning volume and revenue.
And overall improve patient satisfaction.
Before I turn the line over to Brett I'd like to reiterate that alongside our three strategic pillars. We remain laser focused on spending discipline, we continue to operate.
And implement initiatives.
Sort of cash runway extension, while still investing in innovation clinical evidence and commercial expansion.
We continue to see a cash runway for the business through 2025.
I will now turn the call over to Bret Taylor, our Chief administrative officer, and Chief Financial Officer, who will review, our second quarter performance and discuss our financial outlook in greater detail.
Thank you Maria turning to our financial results for the second quarter 2023 revenue for the quarter ended June 32023 was $3 4 million compared to $1 5 million in the second quarter of 2022.
Gross profit for the second quarter of 2023 was $1 4 million compared to negative <unk> 2 million in the second quarter of 2022, and reflecting a 43% gross margin.
R&D expenses for the second quarter of 2023 were $5 3 billion compared to seven 3 million in the second quarter of 2022.
Sales general and administrative expenses for the second quarter of 2023 were $7 8 million compared to $15 7 million in the second quarter of 2022.
Net loss for the second quarter was $10 6 million equating to a net loss of <unk> 15 per share as compared to a net loss of $23 1 million or a net loss of 33 per share for the same period of the prior year.
Our cash burn in the second quarter was $10 1 million and we ended the second quarter of 2023 with $93 9 million in cash and cash equivalents.
Turning to our 2023 outlook, we are opting to maintain our full year expectation for 10% to $14 billion in revenue or.
Our approach to guidance incorporates our progress as we build and lead this new market for point of care MRI imaging and sell systems into a new cycle for our customers.
We know our clinical value proposition with customers is strong and we remain confident in steady price improvement in the back half of the year and going forward.
For the year, we continue to expect gross margins to be approximately 40% to 50% as we began recognizing scale and average swoop, so swoop system pricing those gradually higher.
And lastly, we are maintaining expectations for a total cash burn of $40 million to $45 million for the full year 2023.
This incorporates an expectation for continued investment in R&D and substantially streamline investments in SG&A versus history, while we maintain customer facing resources to continue to drive adoption and growth.
In line with this we've allocated a greater relative portion of Opex spendings to R&D in 2023 versus 2022 with R&D spending projected to be approximately 40% to 50% of total opex dollars. This year.
We will continue to focus on our three strategic pillars and maintain spending discipline.
We are excited about the momentum we are building for the remainder of the year beyond that we are pleased to have the cash and flexibility to invest in the right areas for continued swoop system adoption.
At this point I'd like to turn the call back to Maria for closing comments.
Thank you Brian .
I'm proud of the progress of Hyperfine team has made in recent months and I am very optimistic as to what we intend to deliver before closing in on the note of our team I would like to celebrate a recent change within our leadership structure.
Typically the promotion of Tom severe pour money, our chief product officer to Chief operating officer.
In his expanded role Dr. Peter <unk> will now oversee product design and development clinical science operation fiber security and technical perfect.
It's two years with the company Tom has overseen substantial improvement in image quality through multiple and frequent AI powered software releases and the development of a robust product roadmap of future air powered software and hardware products.
This contribution plan.
<unk> cooperation will execution I have set a high bar of excellence.
We look forward to the many achievements he is ongoing either shipped went great.
With that I want to thank you for your time and open the line for questions.
To ask a question you will need to press star one on your telephone to withdraw your question. Please press star one again.
Please standby, we compile the Q&A Russia.
One moment for our first question.
Our first question comes from the line of Larry <unk> from Wells Fargo. Your line is open.
Hi, This is Charles on for Larry.
Congrats on a nice quarter I wanted to ask about your second half expectations here. So you had about.
About 6 million in the first half and you maintained your guide, which implies about $6 million at the midpoint in the second half which is essentially flat.
What assumptions are kind of baked into this is this conservatism or are there any particular headwinds or I mean, maybe the kings.
Kings College orders fulfilled already or maybe there is seasonality in the second half you could talk about that.
Cause the other flat or just not not improve over the first half sales and then I have a quick follow up.
Sure. So let me let me start with some comments then I'll, let Brian to add on today. So we have chosen to be prudent with our guidance. We continue to see nice momentum in how we're building really the U S pipeline and we see the U S will definitely.
We drive a lot of our success in the second half now that we have completed all of the shipments in the acute College, London, which was funded with the second grant from Bill and Melinda Gates there.
There is always a little bit of summer potential variability or even seasonality, we're not seeing something too dramatic, but again, who then.
Put into two at least accounted for some of that that could still happen in the next few weeks.
But again the momentum is strong and the momentum around pricing as we message continues to be stronger and we expect that pricing will continue to improve through the second half of the year and as we've made some changes to our field force in the U S. We also expect that that will continue to pay dividends as our team gathers.
More more seasoning and more experience in the field. The one thing I'd like to remind a nice things. It was clear from our opening remarks is that we are building a new market. We're not just competing in an existing market and and that is a big undertaking that comes with some variability.
And some some sort of <unk> so.
That has driven us to be to be prudent in the way we are reiterating guidance, Brett just feel free to add any other commentary.
No. Thanks, Brian I think I would echo those comments that we are building a new market and given.
New markets and some variability we wanted to maintain a prudent approach to our outlook.
Okay understandable. Thank you for that and then what.
Quick follow up on.
I Wonder if you might be able to give.
Early thoughts on 2023, I know, it's far too early for formal guidance, but maybe if you might be able to talk at a high level about potential tailwind or headset wins, you might see might expect to see in 2023, including like the the software upgrade.
<unk> and the changes you've made at the field force things like that how to think about next year.
Okay. So I assume you meant 24.
24, sorry, yes, yes.
Definitely it is too early but if I think about what we're doing in terms of investing in the three pillars that are drivers of our business, So innovation and clinical evidence and commercial expansion.
More times should only allow us to continue to make greater progress.
Again, the pricing trend is favorable and get a little bit better every quarter. We will have by early 2020 for yet a new version of our software and we have other programs that we said it would be later this year that we give you all more visibility to our product roadmap for 2024.
<unk> bye.
But as we mentioned on all of the clinical studies that we are funding and supporting and being involved in we see the data from the.
Our faiths MRI ecmo at the very end of this year would you say an important study for the work we're doing in critical care, we're going to see the publication and the presentation of the data from the hope TMR, which supports a pediatric use through the balance of this year alone.
The three things that that study was hoping to achieve which was demonstrating the safety of using our system with a variety of different kinds of sun.
The ability of our system to allow clinicians to assess ventricular volume changes and last but not least the ability to use our system in a variety of settings.
Yes.
Anywhere from on a hospital by hospital like Kids to just emergency Department visits so all of these data.
In 2024, I think will be coming out in the fourth quarter for all intents and purposes, we'll see more traction from auction TMR. So.
I don't foresee headwind.
The headwinds that we foresee more tailwind, but it's probably too early to be any more precise than that.
Okay I appreciate it and again congrats on a nice quarter.
Thank you.
One moment for our next question.
Our next question will come from the line of Neil Chatterji from B Riley Your line is open.
Hi, good afternoon, thanks for taking the questions.
Maybe just first.
Any color you could provide just kind of on the makeup of the kind of a 14 orders in the quarter.
Maybe you guys as far as like institution taper.
That came from the B J C. You are king agreements.
And then I'll turn it up.
Update on expectations for the sales funnel in the back half, including Kings in BGC.
Including sorry, say that again Nielsen I didn't catch it.
J P.
Sure.
So we're not going to provide the geographic split up to 14 order you don't do that so no no different this time fair to say that the second quarter was.
Dominated by international shipments.
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It's publicly that we have completed now all of the shipments in the King's College 2020 to order.
That should not really factor into anything in the second half.
Is that is now completed we had a busy.
Q2, while international as we were deeply sad Melinda gates negotiating the third grant. We also had ice MRM and I'm again completed the shipments of the outstanding.
Right.
On on Baskin College order, so it's fair to say that the second half we have.
More U S than international and that's going to be also a result of some of the changes that we have.
They then and the hiring of a.
New and different kinds of people to accomplish the three different things we need to do commercially in the U S and then gaining.
More experience and I believe that actually accelerating and broadening the pipeline of deals, which we're starting to see as we are moving here even through the weeks of the third quarter.
Brian anything I have missed.
No I think that summarizes well.
Great. Thanks.
And then maybe just.
If you could maybe just.
Talk about the progress you've seen kind of on the software improvement side, maybe elaborate.
And kind of the AI and deep learning development.
High level, you could potentially share.
What that software update nearly 24 could could address.
Sure. So we feel really good about the feedback we're getting from the Lakers that is now in the appeal, which we rolled out to sites in the March April timeframe.
We see that primarily around the BWI sequence.
As we think about how we're driving software in the future. We really have three levers to pull we have the actual team that develops sequences.
Also have a software team and very very plugged into all of that effort and AI team. We're also.
<unk> doing more around being collaborative with the outside world on sequence optimization through some of the research collaborations we have so I like to think that we're moving from just finished quality improvements me up to something that ive chosen to label image performance.
Because we're incorporating not only quality, but really how AI and deep learning enhances the images and the ability for the images to inform decision, making at the clinical level.
And in some cases, not so called the quality of the images, but also the time to process. So we know on the acute stroke side. The time to generate images is going to be important and we are all very conscious of that and we're also turning our development effort.
On the on just better quality that we feel we have that quality that is required by producing the same quality images.
The fraction of the time that it takes right now.
We are funding and I think it works in our prepared remarks as well a number of.
Visibility efforts around the images that we don't have right now in our portfolio and that we'd probably take a little bit longer than just the next revision of image performance, which will focus primarily on BWI.
But the feasibility work will start bearing fruit later in 'twenty four 'twenty five around some things that that will continue to position us well to broaden our use cases.
And some of those are around all farmers, but there are other areas as well.
Great. That's it for me I'll hop back in queue.
Thank you.
Thank you and I'm not showing anything any further questions in the queue I'd like to turn the conference back over to Maria <unk> for any closing remarks.
I just want to close by thanking you all for your interest in hyperfine and look forward to updating you in another quarter. Thank you very much.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.