Q2 2024 Beyond Air Inc Earnings Call
Speaker 1: Good afternoon and welcome everyone to the Beyond Air Financial Results Call for the fiscal quarter ended September 30, 2023. At this time, participants are in a listen-only mode. A question-and-answer session will follow the formal call.
Good afternoon.
Welcome everyone to the beyond these financial results call for the fiscal quarter ended September 32023.
At this time participants are in a listen only mode.
A question and answer session will follow the formal presentation.
Speaker 1: And now, I'd like to turn the call over to Edward Borger, Head of Investor Relations at Beyond Day. Please go ahead.
And now with lots of technical is here.
So you could put your head of Investor Relations at Biondi. Please go ahead.
Speaker 2: Thank you, operator. Good afternoon, everyone. And thank you for joining us. Today, after market close, we issued a press release announcing the fiscal second quarter 2024 operational highlights and financial results. A copy of this press release can be found on our website, www.beyondair.net under the news and events section.
Thank you operator, good afternoon, everyone and thank you for joining us.
Today after market close we issued a press release announcing the fiscal second quarter 2024 operational highlights and financial results a.
A copy of this press release can be found on our website.
W. W beyond their dot net under the news <unk> events section.
Speaker 2: Before we begin, I would like to remind everyone that we will be making comments and various remarks about future expectations, plans, and prospects which constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.
Before we begin I would like to remind everyone that we will be making comments and various remarks about future expectations plans and prospects, which constitute forward looking statements for the purposes of the safe Harbor provisions under the private Securities Litigation Reform Act of 1995.
Speaker 2: Biondaire cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated.
Beyond Air cautions that these forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated.
Speaker 2: We encourage everyone to review the company's filings with the SEC, including, without limitation, the company's most recent Form 10-K and Form 10-Q .
Encourage everyone to review the Companys filings with the SEC, including without limitation. The company's most recent Form 10-K and Form 10-Q.
Speaker 2: which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
Which identify specific factors that may cause actual results or events to differ materially from those described in the forward looking statements.
Speaker 2: Additionally, this conference call is being recorded and will be available for audio rebroadcast on our website www.beyondair.net.
Additionally, this conference call is being recorded and will be available for audio rebroadcast on our website www dot beyond their dock.
Speaker 2: Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, November 13, 2023.
Furthermore, the content of this conference call contains time sensitive information that is accurate only as of the date of the live broadcast November 13th 2023.
Speaker 2: The on-air undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call.
Beyond Air undertakes no obligation to revise or update any statements to reflect events or circumstances. After the date of this call.
Speaker 2: Joining me today on the call are Steve Lisi, Chairman and Chief Executive Officer, Duncan Fatkin, Chief Commercial Officer, and Douglas Larson, Chief Financial Officer. And with that, I'll turn the call over to Steve Lisi. Steve? Thanks, Ed.
Joining me today on the call are Steve Lisi, Chairman and Chief Executive Officer.
Duncan backing Chief commercial officer, and Douglas Larson Chief Financial Officer.
That I will turn the call over to Steve Steve.
Steve.
Thanks, Ed and good afternoon to everyone joining us today.
Speaker 2: I'll start today's call by highlighting the revenue guidance we announced earlier today in our quarterly press release.
I'll start today's call by highlighting the revenue guidance, we announced earlier today in our quarterly press release.
Speaker 2: For the fiscal year ending March 31st, 2025, we anticipate $12 million to $16 million in revenues. The impetus for providing guidance at this time is threefold. First is the great work done by our commercial and supply chain teams to provide hospitals with confidence in lung pH and our support for users of the system. Second, the Vizient contract we announced in October . And third, the FDA approval of an update to our software, which was granted in September .
For the fiscal year, ending March 31, 2025, we anticipate 12 million to $16 million in revenue.
But it is still providing guidance at this time is threefold first is the great work done by our commercial and supply chain teams provide hospitals with confidence and lumpy ph and our support for users of the system second.
Visiting contract we announced in October.
And third the FDA approval of an update to our software which was granted in September.
Speaker 2: Our entire fleet of systems will be updated by the end of January with production of new machines ramping up significantly as well to meet anticipated demand.
Our entire fleet of systems will be updated by the end of January with production of new machines ramping up significantly as well to meet anticipated demand.
Speaker 2: Looking outside of the U.S., in September , we announced a partnership with Getz Healthcare for commercialization of LungFitPH in the Asia-Pacific region, excluding Japan.
Looking at us out of the U S. In September we announced the partnership with Getz healthcare for commercialization of lung fifth ph.
In the Asia Pacific region, excluding Japan.
Speaker 2: We look forward to triggering a milestone payment once CE mark is received, which is expected to occur early next year.
We look forward to triggering a milestone payment when CE Mark is received which is expected to occur early next year.
Speaker 2: We are very pleased to have the endorsement of a company with the reputation of Getz.
We were very pleased to have the endorsement of a company with a reputation of guess.
Speaker 2: Another recent milestone achievement under the LungFit PH program is the PMA submission for the expansion of our label to include cardiac surgery.
Another recent milestone achievement under the lungs with ph program is the PMA submission for the expansion of our label to include cardiac surgery.
Speaker 2: Our clinical and regulatory team is to be commended for putting together a strong submission, and we look forward to a positive impact on our revenues beginning in the back half of fiscal 2025.
Our clinical and regulatory team is to be commended for putting together a strong submission and we look forward to a positive impact on our revenues beginning in the back half of fiscal 'twenty to 'twenty five.
Speaker 2: Moving on to our other programs, at the CITSE conference last week in San Diego, Beyond Cancer presented top line data from the phase 1A first in human trial.
Moving onto our other programs at the Citi Conference last week in San Diego beyond cancer presented top line data from the phase <unk> first in human trial.
Speaker 2: In this study, five patients, all of whom had failed an average of six prior treatment regimens, each received one five-minute intratumoral administration of 25,000 parts per million nitric oxide.
In this study five patients all of whom had failed an average of six prior treatment regimens. Each received one five minute intra Tumoral administration of 25000 parts per million nitric oxide.
Speaker 2: The treatment was safe and well-tolerated. Additionally, an immunostimulatory effect was clearly evident over the 21-day observation period with upregulation of key biomarkers such as cytotoxic T cells, T central memory cells, M1 macrophages, and dendritic cells, while downregulation of T regulatory cells and mononuclear myeloid-derived suppressor cells were shown.
The treatment was safe and well tolerated. Additionally, in immuno stimulatory effect was clearly evident over the 21 day observation period with Upregulation of key Biomarkers, such as cytotoxic T cells T central memory cells, and <unk> macrophages, and dendritic cells, while downregulation of T regulatory cells and mono.
We are myeloid derived suppressor cells were shown.
Speaker 2: I would like to emphasize that the effect on these immune biomarkers is very similar to what we have seen in animal studies.
I would like to emphasize that the effect on these immune biomarkers is very similar to what we have seen in animal studies.
Speaker 2: Our animal studies presented and published over the last three years have consistently shown efficacy with monotherapy UNO as well as in combination with multiple checkpoint inhibitors with respect to tumor regression and survival in multiple tumor models.
Our animal studies presented and published over the last three years have consistently shown efficacy with monotherapy Uno as well as in combination with multiple checkpoint inhibitors with respect to tumor progression and survival in multiple tumor models.
Speaker 2: Also during the quarter, Beyond Cancer presented positive preclinical data at the ERTC International Conference on Molecular Targets and Cancer Therapeutics, demonstrating a statistically significant survival benefit in mice treated with UNO plus anti-PD-1 versus anti-PD-1 alone.
Also during the quarter beyond cancer presented positive preclinical data at the E. R. A T C International conference on molecular targets and cancer therapeutics, demonstrating a statistically significant survival benefit in mice treated with <unk> plus anti PD, one versus anti PD one alone.
Speaker 2: This was a pooled analysis of multiple studies done with 50,000 or 100,000 parts per million nitric oxide for a single administration of 5 or 10 minutes.
This was a pooled analysis of multiple studies done with 50000 or 100000 parts per million nitric oxide for a single administration of five or 10 minutes.
Speaker 2: Additionally, Beyond Cancer's second manuscript was published in the Cells Journal in an article titled, Intratumoral Administration of High Concentration Atric Oxide and Anti-PD-1 Treatment Improves Tumor Regression Rates and Survival in CT26 Tumor-Bearing Mice.
Additionally, beyond cancer second manuscript was published in the show's journal article titled Intra Tumoral administration of high concentration nitric oxide and anti PD, one treatment improves tumor regression rates and survival in <unk> 'twenty six tumor bearing mice.
Speaker 2: We're very excited by the data and progress of the UNO Program and look forward to sharing the data from our completed Phase 1a study in 2024. Our cancer team will also be initiating a Phase 1b study in 2024, as well as approaching the FDA and other regulatory authorities about a Phase 2 program that is expected to begin before year-end 2025.
We're very excited by the data and progress of the unit program and look forward to sharing the data from our completed phase <unk> study in 2024.
Ah cancer team will also be initiating a phase one b study in 'twenty 'twenty four as well as approaching the FDA and other regulatory authorities about our phase II program and is expected to begin before year end 2025.
Speaker 2: I encourage all of you to visit the Beyond Cancer website to get better educated on this potential transformational therapy for those suffering from solid tumors.
I encourage all of you to visit the beyond cancer websites you get better educated on this potential transformational therapy.
Suffering from solid tumors.
Speaker 2: A viral community-acquired pneumonia or VCAP study is underway. As a reminder, this randomized, double-blind, placebo-controlled pilot study will treat hospitalized patients with 150 parts per million nitric oxide intermittently for up to seven days. Keep in mind, we have already completed four studies treating viral pneumonia, which have consistently demonstrated both safety and efficacy.
Of our community acquired pneumonia or recap study is underway.
As a reminder.
This randomized double blind placebo controlled pilot study will treat hospitalized patients with 150 parts per million nitric oxide intermittently for up to seven days keep in mind.
We have already completed four studies treating viral pneumonia, which have consistently demonstrated both safety and efficacy.
Speaker 2: due to viral pneumonia following seasonal patterns of activity. This is a seasonal study running through the fall and winter months.
Due to viral pneumonia following seasonal patterns of activity.
Seasonal study running through the fall and winter months.
Speaker 2: As a result, we expect to announce top line data by the middle of calendar year 2024.
As a result, we.
We expect to announce topline data by the middle of calendar year 2024.
Speaker 2: Viral pneumonia is a significant unmet medical need with over 300,000 hospitalizations annually in the United States and more than 15 million worldwide.
Viral pneumonia is a significant unmet medical need with over 300000 hospitalizations annually now that states and more than 15 million worldwide.
Speaker 2: Let me conclude my opening remarks by touching on our newest program to treat autism that is on track to have human data in 2025. Recall that this is in partnership with the Hebrew University of Jerusalem, which continues to produce exciting preclinical data. In September , we announced the publication of new data showing a therapeutic effect for at least 10 days after a single injection of an extended release formulation.
Let me conclude my opening remarks by touching on our newest program to treat autism that is on track to have human data in 2025 recall that this is in partnership with the Hebrew University of Jerusalem, which continues to produce exciting preclinical data in September we announced the publication of new data showing a therapeutic effect for at least 10 days after a single <unk>.
<unk> of an extended release formulation.
Speaker 2: Just like the daily injection, the data show reversal of behavioral phenotypes associated with autism, and we look forward to additional data from the university.
Just like the daily injection the data show reversal of behavioral phenotypes associated with autism and we look forward to additional data from the University.
Speaker 2: Now we'll return the call over to our Chief Commercial Officer, Duncan Fatkin, for a closer look at the LungFit PH Commercial Launch. Duncan?
Now I will turn the call over to our Chief commercial officer Duncan fashion for a closer look at the lungs at th commercial launch okay.
Speaker 3: Thanks Steve and good afternoon to our investors. As Steve mentioned we have given revenue guidance for LungFitPH for Fiscal 2025. Since we last spoke in August , we have more than doubled the number of hospitals using LungFitPH.
Thanks, Steve and good afternoon to our investors.
Dave mentioned, we've given revenue guidance for <unk> for fiscal 2025.
Since we last spoke in August we have more than doubled the number of hospitals using <unk>.
Speaker 3: Another metric I would like to share with you is the shipment of NO2 filters to our customers.
Another metric I would like to share with you is the shipments as I know to filter through to our customers.
Speaker 3: In fiscal Q1, our first quarter with customers, we shipped approximately 450 filters.
In fiscal Q1, our first quarter with customers, we shipped approximately 450 filters.
Speaker 3: During the quarter that we're reporting today, which ended September 30th, that number eclipsed 1,300. And in October alone, we shipped over 900 filters to our customers.
During the quarter that we're reporting today, which ended September 30th that number eclipse <unk> hundred.
And in October alone, we shipped over 900 Philips is to our customers.
Speaker 3: We expect to continue this acceleration given the recent approval of our software upgrade for Lung50H by the FDA.
We expect to continue this acceleration given the recent approval of our software quite so lumpy.
The STI.
Speaker 3: Based on hospital feedback, we sought and gained FDA approval for software updates that address some minor limitations on device usage. We expect these updates to further increase the separation and value between Lung58 and our competitors in the marketplace.
Based on hospital feedback, we sought and gained FDA approval for software updates that address some minor limitations on device usage.
We expect these updates to further increase the separation and valued between lung 58, and our competitors in the marketplace.
I can make that statement was confidence given our recent experience at the American Academy of respiratory cat that took place a week ago.
Speaker 3: Another event that gives us confidence in accelerating our growth in the market at this stage is our Innovative Technology Contract Award from Vizient, the nation's largest provider-driven healthcare performance improvement company.
Another event that gives us confidence in accelerating our growth in the market. At this stage is innovative technology contract award from visits the nation's largest provider driven healthcare performance improvement company.
Speaker 3: This recognition represents a seal of approval for our revolutionary technology from the largest group purchasing organization in the U.S., representing more than $100 billion in annual purchasing volume.
This recognition represents a seal of approval for a revolutionary technology from the largest group purchasing organization in the U S representing more than $100 billion in annual purchasing volume.
Speaker 3: This achievement validates the positive customer experience and feedback that we have been reporting for some time.
These achievements validate the positive customer experience and feedback that we've been reporting for some time.
Speaker 3: We're very excited by this opportunity to expand our reach through the Vizient customer network.
We're very excited by this opportunity to expand our reach through the vision customer network.
Speaker 3: I would like to emphasize that an innovative technology contract signifies to VIZIA members that the LungFit PH has unique qualities that may enhance clinical care, patient safety, healthcare worker safety, and business operation.
I would like to emphasize that an innovative technology contract signifies to visit members along fifth PIH has the unique qualities that may enhance clinical cat patient safety health care worker safety.
Business operations.
Speaker 3: As mentioned previously, we're building out a field team based on the opportunities developed over the past year and the growing interest in LungFitPH as we broaden our reach. Over the next 12 months, as our revenues build, we expect to continue increasing our sales team across the majority of the continental United States to capitalize on the opportunities afforded by the VISION contract, the updated LungFitPH system, and the anticipated approval of a label expansion for cardiac surgery.
As mentioned previously we are building out the field team based on the opportunities developed over the past year and the growing interest in lung 50 eights as we broaden our reach.
Over the next 12 months as our revenues build we expect to continue to increase and our sales team across the majority of the continental United States to capitalize on the opportunities afforded by the <unk> contracts the updated <unk> system and the anticipated approval of a label expansion for cataract surgery.
Now I will turn it over to Doug.
Speaker 4: Thanks Duncan and good afternoon everyone. Our financial results for the fiscal quarter ended September 30, 2023 are as follows.
Thanks, Duncan and good afternoon, everyone.
Our financial results for the fiscal quarter ended September 32023 are as follows.
Speaker 4: Revenue for the fiscal quarter was $0.24 million as compared with zero for the fiscal quarter ended September 30, 2022.
For the fiscal quarter zero to $4 million as compared with zero for the fiscal quarter ended September 32022.
Speaker 4: Research and development expenses for the fiscal quarter were $7.1 million compared with $4.5 million for the fiscal quarter ended September 30, 2022.
Research and development expenses for the fiscal quarter were $7 1 million compared with $4 $5 million for the fiscal quarter ended September 32022.
Speaker 4: The additional $2.7 million was due primarily to an increase in stock-based compensation, salaries, and development costs associated with the pipeline.
The additional $2 $7 million was due primarily to an increase in stock based compensation salaries and development costs associated with the pipeline.
Speaker 4: SG&A expenses for the fiscal quarter were $10.2 million compared with $8 million for the fiscal quarter ended September 30, 2022.
SG&A expenses for the fiscal quarter were $10 $2 million compared with $8 million for the fiscal quarter ended September 32022.
Speaker 4: The $2.2 million increase was mainly due to stock-based compensation, professional fees, and salaries.
The $2 2 million dollar increase was mainly due to stock based compensation professional fees and salaries.
Speaker 4: Other income and expense for the fiscal quarter showed a $0.1 million gain compared with a $0.2 million loss for the fiscal quarter ended September 30, 2022.
Other income and expense for the fiscal quarter showed a zero point $1 million gain compared with a zero point $2 million loss for the fiscal quarter ended September 32022.
Speaker 4: There's a lot of moving parts, but essentially, interest income roughly offsets interest expense, and the gain we saw from the remeasurement of warrants and derivatives associated with our long-term debt was only partially offset by true-ups to our non-product-related litigation.
There's a lot of moving parts, but essentially <unk>.
Interest income roughly offset interest expense and the gain we saw from the re measurement of warrants and derivatives associated with our long term debt was only partially offset by true ups to our non product related litigations.
Speaker 4: the fiscal quarter ended September 30, 2023, the company recorded a net loss of $17.4 million, of which $16.2 million, or $0.51 per share, was attributable to the shareholders of Beyond Air, Inc., compared with a net loss of $12 million, or $0.40 a share, for the fiscal quarter ended September 30, 2022.
For the fiscal quarter ended September 32023, the company recorded a net loss of $17 4 million of which $16 $2 million or <unk> 51 per share was attributable to the shareholders of beyond Air Inc.
Compared with a net loss of $12 million.
<unk> or <unk> 40, a share for the fiscal quarter ended September 32022.
Speaker 4: Net cash used in the quarter ended September 30th, 2023 with $16.5 million including $6.4 million in one-time payments, which had previously been disclosed and accrued.
Net cash used in the quarter ended September 32023 was $16 $5 million.
Including $6 $4 million in one time payments, which had previously been disclosed and accrued.
Speaker 4: Aside from these one-timers, cash burn in the quarter was $10.1 million, which is in line with our guidance of approximately $10 million per quarter.
Aside from these one timers cash burn in the quarter was $10 1 million, which is in line with our guidance of approximately $10 million per quarter.
Speaker 4: As of September 30th, 2023, the company had cash, restricted cash, cash equivalents, and marketable securities of $43.9 million. And with that, I'll hand the call back to Steve. Thanks.
As of September 32023, the company had cash restricted cash cash equivalents and marketable securities of $43 9 million.
And with that I'll hand, the call back to Steve.
Thanks, Doug we will now take any questions you may have.
Speaker 1: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star and then 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and then 2 if you would like to remove your question from the queue. For participants using speaking equipment, it may be necessary to pick up your handset before pressing the star keys.
Thank you we will now be conducting a question and answer session.
I'd like to ask a question. Please press Star then one on your telephone keypad.
A confirmation tone will indicate your line is in the question queue.
You May press Star and then Qi for you Chuck.
Maybe a question from the queue.
That discipline using speaker equipment, it may be necessary to pick up your handset before pressing the star Keith.
Speaker 1: The first question we have is from Jeremy Jacoby of True Securities. Please go ahead.
The first question, we have is from Jeremy Jacoby of true Securities. Please go ahead.
Speaker 5: Hi. Thanks for taking our questions. Can you just give us your puts and takes on how you got to this guidance range, and then what's causing the delay in the CE mark approval? Thanks.
Hi, Thanks for taking our questions queued.
Can you just give us your puts and takes on how you got to this guidance range and then what's causing the delay in the CE Mark approval. Thanks.
Yeah.
Speaker 2: So, delaying the CE mark approval is not in our control. We're not saying it's not coming by the end of December . We just think it's more likely it'll come after that. Again, this is not in our control.
So Blaine CE Mark approval is it's not in our control.
We're not saying, it's not coming by the end of December we just think it's more likely it will come after that.
Again this is not in our control so.
Speaker 2: with respect to what's driving the guidance. I mean, it was pretty straightforward.
With respect to what's driving the guidance I mean, it was pretty straightforward.
Speaker 2: We got a software upgrade from FDA for our system, which we've been waiting for for quite some time.
You got a software upgrade from FDA for our system, which you've been waiting for it for.
Quite some time.
This just gives us the.
The ability to be.
Speaker 2: to, uh, to be compliant with lots of different devices out there that, you know, nitric oxide systems going ventilators.
It's too to be compliant with lots of different devices out there that you know nitric oxide systems go on ventilators.
Speaker 2: obviously being the main system, so this is important as well as some other tweaks to our system to optimize performance.
Obviously being the main system.
So this is important as well as some other.
Tweaks to our system to optimize performance.
Obviously, we have visibility into.
Speaker 2: that are waiting for this upgrade. We have visibility into hospitals that are on Vizient as our GPO that we're now a part of. And again, the feedback we get from existing customers and potentially new customers is very
Hospitals that are waiting for this upgrade.
We have visibility into hospitals that are on busy and as our G. P. O that were now a part of.
And again, the feedback we get from existing customers and potential new customers is very encouraging for us with respect to our ability to deliver on the service side, which is critically important in this market. So.
Speaker 2: with respect to our ability to deliver on the service side, which is critically important in this market. So.
Speaker 2: I hope that answers your question. We feel highly confident in that range.
Hope that answers your question.
We feel highly confident in in that range.
Thank you.
Speaker 1: The next question we have is from Marie Thibault of BTRG. Please go ahead.
The next question, we have is from maybe T bolt Av P. T. <unk>. Please go ahead.
Speaker 6: Hi, good afternoon. Thank you for taking the questions. Maybe I can try to understand a little bit more about the ramp. Thanks for that great detail on filters shipped. Are the filters when they're shipped, are they typically, is there a big stocking bolus and then folks are reordering as needed? What's sort of the dynamic, how to think about that ramp you gave us, you know, the October number, which is very impressive, but I don't want to make the mistake of prorating that over the entire quarter if that's not the appropriate approach. And then anything to cite in terms of pricing along these contracts? Are you seeing a wide range? Are things sort of staying stable with what you'd expected?
Hi, good afternoon. Thank you for taking the questions maybe I can try to understand a little bit more about the ramp thanks for that great detail on filter shipped.
Are the filters when they're shipped are they typically is there a big stocking bolus and then folks are reordering as needed at what's sort of the dynamic how to think about that ramp you gave us.
October number which is very impressive, but I don't want to make the mistake of pro rating that over the entire quarter if that is not the appropriate.
And then anything to cite in terms of pricing along these contracts are you seeing a wide range are things sort of think stable with what you'd expected.
Speaker 2: Thanks, Marie, I think that the pricing is pretty much as we as expected, you know, it's within the ranges and it's not all one price for everyone, obviously, but it's within the range of what we've expected over the past year. Plus, so that's not.
Thanks, Marie I think that the pricing is pretty much as we as expected.
You know its within the ranges and it's not all one price for every one obviously, but it's within the range of <unk>.
What we've expected over the past year, plus so that's not.
Speaker 2: That's not going to change. In our opinion, the market's kind of stabilized in the range that we expected. Yeah, the filter stocking is if you look on it on a monthly basis, it can be chunky. There's no doubt. But some hospitals will will will want to delivery every month. Some will will look every quarter.
That's not going to change.
Our opinion, the market's kind of stabilized in the range that we expected.
Yeah. The filter stocking is if you look at it on a monthly basis. It can be chunky theres no doubt, but some hospitals will will will want to deliver every month. Some we'll we'll look every quarter and you know there's there's obviously interim there. So they do a monthly in there they're running out they'll call us sooner same thing on a quarterly basis.
Speaker 2: You know, there's, there's obviously interim there. So if they do a monthly and they're, they're running out, they'll call us sooner. Same thing on the quarterly basis. So.
So.
Speaker 2: I don't know how to guide you with respect to the October number. Obviously, I mean, these things will move depending on how we get more contracts coming on with hospitals.
I don't know how to guide you with respect to the October number obviously I mean, these things will move depending on how do we get more and more contracts coming on with hospitals.
Speaker 2: So just really put that out there to show you that there is this upward trend, obviously.
Just just really put that out there to show you that there is this upward trend obviously.
And usage and in <unk>.
Number of customers that we have.
Speaker 6: Yeah, it's helpful for sure. Okay. And then I guess my follow up, you know, glad to have the fiscal 25 guidance. Some of those drivers like Vizient, like the new software approval, they seem like they could start to
Yeah. That's helpful for sure Okay, and then I guess my follow up you know.
Glad to have the fiscal 'twenty five guidance.
Some of those drivers like <unk> like the new software approval.
They seem like they could start to help the adoption earlier ahead of fiscal 2025. So help us think about maybe time points for that or are there times when folks start to look at kind of.
Speaker 6: help the adoption earlier ahead of fiscal 2025. So help us think about maybe time points for that. Are there times when folks start to look at kind of, you know, the list of vendors on their GPO, you know, GPO list, that sort of thing. How to think about one of these, you know, drivers could start to hit.
You know the list of vendors on their G. P O M G.
T P O lift that sort of thing.
How to think about one of these you know drivers could start to hit.
Speaker 2: Yeah, thanks for that. And these things take time. So, you know, the VZ and GPO came in the middle of October , you know, it takes.
Yeah, Thanks for that and and these things take time, so you know.
E G. P O came a middle of October.
Sure.
It takes three to six months on average to contract with the hospital roughly so.
Speaker 2: on average to contract with a hospital roughly.
Speaker 2: you know, that's a time frame you need to see the improvements come, as well as, you know, the software upgrade to our system. We're a class three medical device. This doesn't just happen overnight, which is why you heard in the prepared remarks that, you know, we'll have things, you know, pretty much up to specs for all of our existing systems, the Market Plus, ramping up new systems. That'll happen. It's happening now, but it'll take a few months.
Now that that's the timeframe you need to see the improvements come as well as you know the software upgrade to our system or a class III medical device. This doesn't just happen overnight, which is why you heard in the prepared remarks that we will have things pretty much up the specs for all of our existing systems to market plus ramping up new systems.
That'll happen it is happening now, but it will take a few months and will be <unk>.
Speaker 2: with that process in January . So, yeah, I mean, if you think about it that way, you're looking at, you know, things happening, you know, towards the Jan, Feb, March time frame when you're going to see the major impact from from these events. Okay, it's very helpful.
With that process in January.
So yeah I mean, if you think about it that way you're looking at you know things happening you know towards the Gen Fab March timeframe, when you're going to see the major impact from from these events.
That's very helpful. Thanks for taking the questions.
Yep.
Speaker 1: The next question we have is from Joseph Downing of Papasandler. Please go ahead.
The next question we have is from Joseph Dawning of purpose Sandler. Please go ahead.
Speaker 7: Hey, Dean, this is John for Jason. I appreciate the question. Yeah, so curious how your conversations are going with hospitals in the current environment. Are you seeing any lengthening of decision cycles or just slower contracting processes in general? And then just a quick follow-up, anything else to note on how hospitals might be behaving differently right now in terms of forming new partnerships or embracing new technologies?
Hey, Tim This is Joe on for Jason I appreciate the question Yeah.
So curious how your conversations are going with hospitals in the current environment are you seeing any lengthening decision cycles or just slower contracting processes in general and then just a quick follow up anything else to note on how hospitals might be behaving definitely right now in terms of informing your partnerships or embracing technology.
Speaker 2: Okay, yeah, I don't think the hospitals are going any slower than, than what is normal for them. I mean, post pandemic, I mean, things are a little bit slower post the pandemic and we're still in that in that mode, you know, things don't bounce back as fast in the, in, in the world of the hospitals nor in the supply chain world. So things aren't aren't back to what they were prior. So that's why it's, you're looking out three to six months to get things done with the hospital. So, I don't think that's.
Okay. Yeah, I don't think the hospitals are going any slower than than what is normal for them. I mean post pandemic I mean things are a little bit slower post the pandemic and we're still in that in that mode. You know things don't bounce back as fast in the in the world of the hospitals, nor in the supply chain.
World, So things aren't aren't back to what they were prior.
So that's why it's youre looking out three to six months to get things done with a hospital so.
Speaker 2: really changed in the past year or so and it's probably not going to change going forward.
I don't think that's really changed in the past year or so and it is probably not going to change going forward.
So there was another part to your question I'm sorry.
Speaker 7: Yeah, so, in terms of how hospitals might be behaving differently in terms of forming your partnerships, or just embracing the technology.
Yeah. So in terms of how hospitals might be behaving differently in terms of forming partnerships or are just embracing new technology.
Speaker 2: Yeah, I think, I think, look, the embracing new technology part is, you know, it's normal for these things to take time. You know, again, we had to prove ourselves to the hospitals.
Yeah, I think I think looked at the embracing new technology parties. It's normal for these things to take time, you know again, we had to.
Prove ourselves to the hospitals, you know that we can.
Speaker 2: support them. This is a life-saving technology, so you can't not be able to support the hospital in a crisis situation where they have an overload of need and they may need another machine or two or more filters or more kits or so forth. They had to be sure that we could
Support them.
Lifesaving technology. So you you can't not be able to support the hospital in a crisis situation, where you know they they have an overload of NN.
Need and they may need another machine or two or more filters or more.
Kits or so forth.
To be sure that we could support them and provide them in there and those those critical time periods and obviously, we've proven that over the last year plus and that's a major part of why we've given out guidance at this point. So the adoption curve is based on a number of things and one of them has confidence in us.
Speaker 8: support them and provide them in those critical time periods. And obviously, we've proven that over the last year plus, and that's a major part of why we've given out guidance.
Speaker 8: at this point, so the adoption curve is based on a number of things and one of them is confidence in us. The other one, obviously, is optimization of our system to work across all, be compatible with all ventilators across the offerings from the vent companies.
The other one obviously is optimization of our of our system to work across all.
Be compatible with all ventilators across the offerings from the event companies. So these are two obviously critical things and then of course the GPO contracts. So this is just the timing that we're on I mean these are these things took time to get through and.
Speaker 8: So these are two obviously critical things, and then of course the GPO contract.
Speaker 8: This is just the timing that we're on. I mean, these things took time to get through, and now we feel that that's complete and what we need, and we can move forward. So, again, I don't think the first six to nine months that we were out was something that was ever conveyed of us taking significant market share. That was really the time period to learn and to get the hospitals comfortable with us.
Now we feel that that's complete and what we need and we can move forward. So again I don't think the first six to nine months that we were out was something that was ever conveyed as bus taking significant market share.
That was really the time period to learn and to and to get the hospitals comfortable with us and here. We are in this period after that where we think we will be taking share and we're happy to show you guys that will be taking share.
Speaker 8: And here we are in this period after that where we think we'll be taking share and we're happy to show you guys that we'll be taking share. We've certainly hit milestones with respect to.
We've certainly hit milestones with respect to.
Speaker 8: you know, our optimization of our system and getting the comfort of the hospitals. So.
Our our.
Our optimization of our system in and getting the comfort of the hospitals. So.
It's just where we are today.
Speaker 8: I don't think the adoption curve was going to be any different than what we saw. Maybe it could have been a little faster with a few things falling in our favor, but.
I don't think the adoption curve was going to be any different than what we saw maybe it could've been a little faster with a few things falling in our favor but.
It's just where we are.
Speaker 7: Appreciate that, Steve. And then just piggybacking off of your comments there about gaining share. Are you seeing any pickup in interest or greater interactions with potential customers as a result of competitive struggles across the landscape? Absolutely.
I appreciate that Steve and then just piggybacking off of your comments there about gaining share are you seeing any pick up in interests are great interactions with potential customers as a result of competitive its struggles across the landscape.
Absolutely.
100%.
Speaker 8: I mean, uh, you know, our system, you know, we have this big respiratory conference and in Nashville.
I mean, you know our system, we had this big respiratory conference in <unk>.
Nashville last week and Oh.
Speaker 8: You know, it's clear, if anybody was there, I'm sure there weren't too many people on this call that were there, but it's clear we have the best system out there overall. Thanks. Bye.
It's clear if anybody was there I'm sure they werent too many people on this call that we're there, but it's clear we have the.
First system out there overall.
Speaker 8: And there are some struggles from our competitors. And it's certainly coming our way. There's no doubt.
And you know there are some struggles with.
From our competitors and it's it's certainly coming our way there's no doubt that there's increased interest in our system increased interest in doing business with us.
Speaker 8: increased interest in our system, increased interest in doing business with us, or we wouldn't have put that guidance out there. I mean, you know, this is a very, very careful decision that we made to put that guidance out.
Wouldn't have put that guidance out there I mean, you know this is very.
Careful decision that we made to put that guidance out.
Great. Thanks, Steve I appreciate it.
Speaker 1: The next question we have is from Matt Kaplan of Mecklenburg-Salmon, please go ahead.
The next question, we have is from Matt Kaplan of Ladenburg Thalmann. Please go ahead.
Speaker 9: Hey guys, thanks for taking the question. I just wanted to get a little bit more.
Hey, guys. Thanks for taking the question.
Just wanted to get get a little bit more perhaps some granularity with respect to when we should start to see an inflection.
Speaker 9: perhaps some granularity with respect to when we should start to see an inflection with respect to the impact that the new software and the GPO contract should start to have on revenues.
With respect to the impact that the new software and the G. P. O contract <expletive> should have to have start to have an on revenues.
Speaker 9: And is that is that something, you know, we're starting to see, you know, the momentum I guess you're seeing in October in terms of the
Is that is that something you know, we're starting to see the momentum I guess youre seeing them in October in terms of the filters.
Speaker 9: Um, when does that translate in terms of, uh,
Filters.
When does that translate in terms of the increase in revenues.
Speaker 8: Thanks, Matt. I mean, like I said, this is it's about three to six months to feel the impact of these events, which took place in September and October . So you're really looking in the jam fed March timeframe when you're going to see us in our opinion, you know, picking up significant contracts and volume picking up, you know, I wish it were sooner. I wish I could tell you December is going to be a bang up month. But, you know, this is.
Thanks, Matt I mean like I said this is it's about three to six months to feel the impact of these events, which took place in September and October So you're really looking to jam fab March timeframe, when you're going to see us in our opinion, you know picking up significant contracts in volume picking up you know I I wish it was sooner I wish I could.
Tell you December is gonna be a bang up month, but you know this as you know this is just the time that it takes you know things don't move that quickly.
Speaker 8: You know, this is just the time that it takes, you know, things don't move that quickly. I do think there'll be progress in the December quarter over the September quarter. We just, we just reported, but.
I do think there'll be progress in the December quarter over the September quarter. We just we just reported but I wouldn't expect it to be massive magnitude. Because this is a three to six month process. So that would put us in a gen fab March timeframe for US you know putting up numbers that that would give you comfort and confidence that we're going to do what we say we're going.
Speaker 8: I wouldn't expect it to be massive magnitudes because this is a three to six month process. So that would put us in the Jan, Feb, March time frame for us, you know, putting.
Speaker 8: that that would give you comfort and confidence that we're going to do what we say we're going.
You do.
Speaker 9: now that's helpful. And do you think the kind of increases in revenue would be kind of chunky and as you get additional GPOs and additional contracts or how should we think about that ramp?
Okay. That's helpful and do you think the kind of Oh.
<unk> isn't rather revenue would be kind of chunky and and as you get a traditional G. P O those in and additional contracts or how should we think about that ramp.
Yeah.
Speaker 8: Oh, yeah, it's going to be chunky, Matt. I mean, you know, I can't predict when certain contracts are coming up. So one month could be, you know.
Oh, Yeah, it's gonna be chunky, Matt I mean, you know I can't predict when certain contracts coming up so one month could be you know.
No.
Speaker 8: three new hospitals and they're small, the next one could be one hospital that's five times those three combined. You know what I mean? These are just timing issues with respect to when contracts are up.
Three new hospitals in that small and next one could be one hospital that is five times. Those three combined you know I mean these are just timing issues.
With respect to when contracts are up.
Speaker 8: And, you know, that's something that is obviously beyond our control. So, you know, it may not be as smooth as you would like to model, but, you know, we've taken that into account, and that's why we're putting the guidance out for fiscal 25, you know, and March 31st, 2025, and that's why we're doing it this way, because it's very difficult to predict on a monthly or quarterly basis.
And you know that's something that is obviously beyond our control. So you know it may not be as smooth as you would like to model but.
We've taken that into account and that's why we're putting the guidance out for fiscal 'twenty five.
And in March 31, 2025, and.
That's why we're doing it this way because it's very difficult to predict on a monthly or quarterly basis.
Speaker 8: We'll get better clarity as we go forward. I hope to give better clarity, you know, either in February or June when we report our next two quarters. Hopefully we'll have a, I'll be able to give more, more.
We'll get better clarity as we go forward I hope to give better clarity you know either in February or June when we report our next two quarters, hopefully, we'll have a I'll be able to get more and more.
Speaker 8: details on how chunky it might be and when, but right now.
Details on how chunky it might be and when but right now.
It's very difficult.
Speaker 9: That's helpful. Thanks. Thanks for giving the guidance and then one question on the pipeline with your The VCAP study that you just started. What do you what do you what do you what do you hope to show? When you when when you complete that study
That's helpful. Thanks, and thanks for taking the guidance and then one question on on the pipeline.
With your the cap study that you just started started what do you what do you what do you what do you hope to show.
When you when you are complete that study.
Speaker 8: No, we've done four studies already in pneumonia, three in infants and one in adults during the pandemic, so you're going to see pretty much what you saw there. You're going to see safety, which will have to be the primary endpoint in a pilot study, of course, safety, tolerability, and then you'll see our efficacy endpoints will be there as well. You know, same efficacy endpoints you saw in the other studies. I mean, we have them on our website. They've been published at medical conferences as well as journals, so.
No we've done it before studies already pneumonia three in infants and one in adults during the pandemic, so youre going to see pretty much what you saw there youre going to see safety.
Which you'll have to be the primary endpoint in a pilot study of course safety Tolerability and then you'll see our our efficacy endpoints will be there as well you know CMS.
Same efficacy endpoints you saw on the other studies I mean, we have them on our website they've been published at medical conferences as well as journals. So.
Speaker 8: You know, you're going to see the same thing. You're going to see, you know, these patients improving faster than if they don't have nitric oxide in general. Again, you know, this will be the fifth time we've done it, so.
You know youre going to see the same thing you're going to see you know these patients improving faster than if they don't have nitric oxide in general.
Again, this will be the fifth time, we've done it so.
Speaker 8: I mean, I think anybody would be shocked that you go four for four, you're probably going to go five for five. So if anyone wants to take a look at our previous results, you'll know what's coming.
I mean, I think anybody would be shocked that you go for for for you you're probably going to go five for five so we don't want to take a look at our previous results you'll know what's coming.
Speaker 9: So just to follow up on that, so the goal of this study is to generate data that you can take to FDA to get clearance to do a pivotal, or what's?
But just just a follow up on that so that is the goal of this study is to generate data that you can take the FDA to get clearance to a pivotal or are what's what's what do you hope to show Yeah. This should be the final study before we go into a registration study that's correct the neck.
Speaker 8: What do you hope to show? Yeah, this would be the final study before we go into a registration study. That's correct. The next study will be a registration study. In the United States.
Study will be a registration study.
In the United States.
Great great. Thanks, Steve.
Thanks, Matt.
Speaker 1: There are no further questions at this time. I would like to turn the floor back over to Steve Leecy for closing comments.
There are no further questions at this time I would like to turn the floor back over to Steve for closing comments.
Speaker 8: Yeah, thanks everybody for joining today. You know, internally here, we're very positive on our outlook. We wouldn't have put that guidance out there. And as Matt mentioned on the last question, you know, we're very excited about our pneumonia program. Just one last note on that, it is a very seasonal condition, so these studies do move quickly. So with that, I will say thanks again and talk to you soon.
Yeah, Thanks, everybody for joining today.
You know internally here, we're very positive on our outlook, we wouldn't have put that guidance out there and as Matt mentioned on the last question. You know, we're very excited about our pneumonia program.
Just one last note on that it is a very seasonal conditions. So these studies to move quickly.
So with that I will say, thanks, again and talk to you soon.
Speaker 1: This concludes today's conference. Thank you for joining us. You may now disconnect your lines.
This concludes today's conference. Thank you for joining US you may now disconnect your lines.
Yeah.
Yeah.
Hum.
Yeah.
Yeah.