Q3 2023 PAVmed Inc Earnings Call
Good day and welcome to the <unk> third quarter 2020, Threep business update conference call.
All participants will be in a listen only mode. If you need any assistance during the call. Please signal a conference specialist by pressing the Starkey followed by zero.
After today's remarks, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone.
I would like to withdraw your question. Please press Star then two.
Please also note that todays event is being recorded.
I would now like to turn the conference over to Michael Parks, Vice President of Investor Relations. Please go ahead Michael.
Thank you operator, good morning, everyone and thank you for participating in today's third quarter 2023 business update call.
Release announcing our business update for the company and financial results for the three and nine months ended September 32023 is available untapped on the pad that website. Please take a moment to read the disclaimer about forward looking statements.
Business update press release and this conference call. Both include forward looking statements and these forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made.
Factors that could cause actual results to differ are described in the disclaimer and then our filings with the U S Securities and Exchange Commission.
For a list and description of these and other important risk factors or risk factors and uncertainties that may affect future operations see part one item one a entitled risk factors and pad that its most recent annual report on Form 10-Q filed with the SEC and subsequent updates filed in quarterly reports on Form 10-Q, and any subsequent form 8-K.
Hi.
Except as required by law pad that disclaims any intention or obligation to publicly update or revise any forward looking statements to reflect changes in expectations or in events conditions or circumstances on which the expectations may be based or that may affect the likelihood that actual results will differ from those contained in the forward looking statements.
I would now like to turn the call over to Dr. Felicia Eclogue pattern that you're chairman and CEO Dr. Aqua.
Thanks, Mike and thanks, everyone for joining us this morning, and we look forward to providing you with this update on <unk> business and finances.
First a quick reminder, that we hold a separate business update call for pad med subsidiary lucid diagnostics yesterday.
I will limit my comments on lease its business to key highlights I would encourage you to view the reporting of yesterday's call, which is available on the lucid website for further details from Lucent business update.
First some quick background have met as a commercial stage medical technology company with two subsidiaries, which are marketing commercial products privately held various health and NASDAQ listed lucid diagnostics at the parent company patented provides a shared services infrastructure, including management services to each subsidiary the model drive substantial economies of.
Kayla and infrastructure, which facilitates licensing or acquisition of high value assets, such as lucid and various we.
We implemented a strategic restructuring in early 2023 to focus substantially all of our resources and efforts on our two commercial enterprises lucid and various and this update will reflect that strategy.
That said I'll briefly note that we have one active internal R&D project in partnership with Nova sound to develop the next generation, which are basketball and ultras ultrasound device that progress is progressing very well, having completed two or three milestones I will also note as I have in recent calls we remain very active on the business development side since current market conditions are.
Or a plethora of high value assets, which might which may provide real opportunities to enhance shareholder value.
Let me start with some highlights for Verathon lucid before proceeding to a deeper deeper dive there or something.
First off is undergoing a commercial restructuring and expansion that is currently underway under the leadership of our President Gary Mandel, who started several months ago.
We have an active strategic discussions with large academic medical centers.
Shows great promise there are next generation various cancer care platform is scheduled to launch this quarter and we have active discussions with large biopharma companies on the cancer care platforms Biopharma module to serve as a digital companion for novel cancer Therapeutics.
Finally, the implantable model monitor excuse me.
Progressing towards FDA submission and commercial launch in 2024.
As I mentioned yesterday Q3 has been the most important quarter and lucid history as we've crossed several critical milestones and translating study test volume growth into revenue and revenue growth briefly quarterly used to guard tests volume grew 17%.
<unk> revenue growth increased 376%.
Our revenue cycle management upgrades has demonstrated solid progress in the first full quarter reporting.
Some of these studies with near perfect results have been.
Had their results released and two of them have been accepted for peer reviewed publication, one was pending or direct contracting initiative is net of this first employer contract and our new VP of employer markets.
He is pursuing.
<unk> east regarding the benefit to employers and finally, as we announced this.
This week Easter Guard to point out was launched with potential with a clear benefits and performance as well as in the per sample assay cost.
Let's now proceed to a deeper update on Paris.
Next slide.
First off as a commercial stage digital health company that seeks to enhance personalized cancer care, we have to be.
One is the various cancer care platform, which has a patient module that operates from a smartphone and was able to transmit physiologic parameters from connected devices as part of our various box. But also includes a clinician portal where that data is presented to clinicians and provides a variety of opportunities for the for the cancer care team to interface with the patient and in hand.
Their care, we also have an implantable monitor if that's in the works that isn't that is designed to be implanted at the same time has a.
Chemotherapy or immunotherapy port.
<unk> mission is to utilize modern remote patient monitoring tools to improve care through early detection of complications longitudinal trends and risk management.
Excellent.
The opportunity to improve patient outcomes increase workflow efficiencies and lower costs. It results in a substantial market opportunity there are millions of hospitalizations for cancer.
Per year and about two thirds of them are unplanned admissions with substantial cost to the hospital.
And 20% of these unplanned admissions are likely preventable. This results in a total addressable market opportunity of approximately $2 billion. The business model is very attractive. It's a software as a service recurring revenue model that leverages established remote patient monitoring codes, but also provides a virus with additional revenue opportunities through enhance.
Technical support and charging for clinical integration.
Clinical support such as our <unk> coverage as well as revenue opportunities directly derived from the implantable device.
Allows the clinic.
Clinical cancer care, our practice to leverage value based models, such as the E M or enhancing oncology model that CMS provides.
Next slide.
A few updates on our commercial execution, we remain focused on several early adopters, which are small to medium oncology practice and we spent the last several months focused on are really ironing out the custom integration and customer support are engaging with patients making sure that patients are able to.
A report their data to see.
Streamlined to make that process, a streamlined and efficient as possible for the practice operations and Boeing many of the much of the feedback that we've received from these early adopters and early engagements that have been incorporated into our next generation two point a version of the various cancer care platform, which is completing its development and is expected to launch this quarter.
<unk>.
As I mentioned earlier, we've undergone a significant restructuring and expansion of our commercial team under Gary meetings leadership since he took over several months ago are we recently hired two new.
Market development managers with experience in this area.
That are now started on are actively calling on cancer care.
Practices across the country to expand the number of accounts that we have under our belt now that we have the next generation.
Product with that incorporates feedback from early into our earlier early adopters.
We are as I mentioned, an active strategic discussions with large academic cancer centers.
Pathway for engaging with them is rather different than us.
As always the case has longer lead times and were very excited about a couple of lead here, which we hope to consummate into active accounts in the near term.
Excellent.
As we are introduced in our last call. There's a separate opportunity that biopharma opportunity that we're very excited about and we are aggressively pursuing our goal here is for the various platform to act as a companion solution for post market surveillance.
Novel oncology drugs.
The the numbers are quite impressive about cost about $40 million per study to execute a phase four post marketing surveillance study for a clinical study for oncology therapeutics and essentially all.
Clear drugs are required to undergo that and everyday on the market cost about $2 $7 million mm for.
Or a billion dollar blockbuster drugs. The goal here is to create is to use the platform to create value for both the biopharma companies and the oncology practice through certified clinics to administered new therapies. It allows drugs to move up the chain of therapy. So for example, if it's initially cleared as a third or fourth line drug to move into the second and first line drug with <unk>.
Matic economic impact to the company and to increase patient adherence to care pathways that are very well defined during these past during the post market surveillance period. So we have active discussions with several large pharma companies too.
To see if we can engage them to have a very diverse health platform and the Biopharma module serve in this role so.
So we previously had talked about the full spectrum of opportunities both from a drug development phase around the time of our FDA submission, but our initial focus right now where we believe the greatest opportunity for near term commercial impact is in the post FDA approval phase where it drove this market surveillance and that can that can include existing.
Drugs that are working our way up the chain of therapy as I previously explained.
Next slide.
As we previously announced we are also transitioning the various platform from its current status within the regulatory framework as an M. D. D. Astro medical device data system, which is the only displaying medical data for clinicians without modification into M. S. A M D high which is a software as a medical device, which under after.
The regulations is intended for use in diagnosing or treating patients the upgrade to this platform.
Do an FDA cleared S. A M D will provide us with really unlimited potential to grow into a full fledged clinical decision support tool. So beyond just simply being a remote patient monitoring tool that transmit information, we'll be able to provide patient threshold alarms and alerts notifications triage and even something called additional biomarkers that are based on AI and machine.
Learning models for patient risk profiling. So that process is progressing for an FDA five 10-K submission as a software as a medical device in 2024.
Next slide.
And finally as I mentioned, we're very excited to be making solid progress on the various implantable monitor this monitor as you can see on the right. There is designed to have a physiologic monitor that's the silver structure there that is implanted.
Which can be implanted in conjunction with a implantable vascular access port, which approximately 50% of cancer patients received the receipt to have their chemotherapy or immunotherapy.
Delivered are the key features will be.
Cardiac monitoring.
Activity.
It will have a patient trigger an event monitor temperature your respiratory rate and Bluetooth connectivity that will supplement the existing external connected devices.
We have had multiple successful FDA pre submission meetings seeking feedback on all of these various design features and those are all gone extremely well and we're progressing towards FDA submission and commercial launch next year. Once we have this in place it will be it will really be a game changer for the platform.
As it assures 100% of patient compliance with the remote patient monitoring billing requirements and really provides a substantial added value both on their clinical.
Care side as well as the economics for medical.
For the practice and the institution.
Next slide.
So as I stated I'll keep the overview of lucid busy.
Business to some highlights from the third quarter. These were again covered and substantially greater detail on on yesterday's lucid call on.
From a commercial execution side, we performed 20 575 tests you took our tests, which is a 17% quarter on quarter growth and 137% annual growth revenue was 784000 tests, sorry revenue of $784000, which is nearly a 400% quarterly growth and nearly doubled.
On an annual basis.
We had strong contributions from our satellite nuclear test centers in our high volume check your food to testing events and we're gaining traction with several important strategic accounts.
Other strategic accomplishments are.
We recently upgraded our revenue cycle management infrastructure and processes as we announced in the last quarter and the early results of that have continued in bird are delivering really solid results with eastern guard claims processing and payments are we've had a very substantial boost to our clinical utility data to support in network payer coverage.
Engagement, we have over 500 patients across three studies that had been released the clue study prevent registries and San Antonio Firefighter departments study two of these have been accepted for a peer reviewed publication and one is pending we're accelerating activity in direct contracting with employers to offer to Easter guard as a benefit.
Our first contract assigned testing has begun and our new VP of employment markets has hired and will be starting this week as we announced this week our E SOCAR to point out.
I say has been launched in our laboratory.
In Orange County, California, with our improved performance and lower costs.
Thanks, a lot.
I'll just point out the steady test volume growth, which represents eight consecutive quarters or two full years of quarter on quarter growth.
225, 75 and represents.
<unk> indicated.
As shown here that we still have substantial laboratory and manufacturing capacity, which is currently over 10000 tests per quarter.
Next slide.
With that I'll hand, the reins over to Dennis when they proceed with our financial update.
Thank you Lee John Good morning, everyone.
Our summary financial results for the third quarter were reported in our press release that was published last night.
On the next three slides I'll emphasize a few key highlights from the quarter, but encourage you to consider those remarks in the context of the full disclosures covenant in our quarterly report on Form 10-Q that was filed with the SEC.
Previously filed with the a C and is available on our patented website.
Slide 16.
Our balance sheet demonstrates cash of $26 four.
$4 million and reflects a sequential burn rate of $10 7 million.
We have successfully cut our burn rate in each of the first three quarters of this year, reflecting quarterly burn rate reduction of more than 6 million since the fourth quarter of last year for an average reduction of $2 million in each successive quarter.
These improvements are related to the cost control initiatives, we put in place at the beginning of the year with continued improvement in each successive quarter.
Obviously, the cash balance does not reflect the 5 million in additional lucid funding. Shortly after the end of the quarter, nor the remaining $10 million draw available to us under the Securities purchase agreement signed in March of 2022.
Or other resources that are available to us at the pad med and lucid entity levels.
On a pro forma basis, including the remainder of the securities purchase agreement.
Assuming the net burn rate is sustained at this level our runway is about a year.
Furthermore, as cash collections continue to accelerate as we will talk about in a second this can further throttled the burn rate for the upcoming quarters.
Vendor payables they.
They can vary by quarter based upon the timing of receipt of vendor invoices.
Although accounts payable is up sequentially the balance sheet in the 10-Q reflects a decrease from our beginning of the year.
Other current liabilities of $1 6 million increase.
The largest increase is the accrual for certain insurance renewals they get paid over the next year and it has an offsetting amount in the current assets as prepaid amounts.
With that.
A net sequential increase of $2 million largely related to an increase in the noncash charge in fair value adjustments, which in which increases are offset by debt repayments via conversions to common stock during the quarter.
Other long term liabilities are from capitalized leases related to our lab and office spaces.
Shares outstanding.
Include Unvested restricted stock awards as of today.
Equals 128 million shares the.
The GAAP outstanding shares of $119 7 million.
Are reflected on the slide as well as on the face of the balance sheet in the 10-Q.
So slide 17 Slide 17 compares this year's third quarter to last year's third quarter and similarly for the nine months totals on certain key items.
I Trust you will review the information in my comments in light of the cautionary disclosure on the bottom of the slide about supplemental information, particularly non-GAAP information.
Revenue for the third quarter largely reflects lucid actual cash collections for the quarter for insurance reimbursement claims plus invoiced or ESO guard tests to the veterans administration, plus invoiced amounts for the virus cancer care platform.
As detailed in our lucid quarterly call yesterday.
We highlighted the discussion that began on our first quarter call in May.
Regarding the.
Upgrades, we made to the lucid revenue cycle management company Rep.
Recognized lucid revenue of 783 substantially reflects cash collections in the quarter versus the pro forma revenue of about $5 million for the submitted claims of nearly 2600 tests.
As mentioned in the lucid call yesterday.
Fourth quarter collections, so far are trending 33% higher.
The third quarter various revenue reflects the initial patients are.
Equivalent to about 98 patient months put on the platform for each of the first to onboard at cancer care centers. During initial customer acceptance processes that included validation customization and integration with the respective EHR systems generally are heavily heavily controlled and very into.
Pressure testing of the platform as it relates to clinicians relying upon the various platform information and speed of connecting patients and clinicians and the ability to effectively communicate with and update the clients' electronic health records and other patient care related systems.
Both clients are reporting they are quickly cash flow positive on the platform.
Lucid revenue recognition.
A key determinant is the probability of collection.
Therefore, due to the fact that we are in the early stages of our reimbursement process means revenue recognition occurs when the claim is actually collected versus when the patient report is invoiced and submitted for reimbursement.
As Youll see in our 10-Q. This is called variable consideration the jargon of gaps SA ASC 606 revenue recognition guidelines and presently there is insufficient predictive data to recognize revenue when invoiced.
As for the various revenue we expect to continue to recognize revenue on an as incurred and as invoice basis subject to normal GAAP rules.
Some comments on GAAP and non-GAAP opex as well as net loss the.
The presentation shows year over year comparisons, but I will also.
Go through sequential changes, which are more indicative of where we are heading in the upcoming quarters.
Our third quarter sequential opex on both a GAAP and non-GAAP basis.
Not only flat.
But within a few dollars of each other.
The year over year Opex comparison shows an improvement in opex by about 30% for each of the GAAP and non-GAAP measures a direct reflection of the cost controls we put in place the beginning of the year.
Our third quarter non-GAAP loss per share is nine a decrease of a penny from the second quarter and an eight improvement from a loss of <unk> 17 in the prior year third quarter.
On a GAAP EPS basis.
Noncash charges accounted for approximately seven cents per share in the quarter <unk>.
Including approximately <unk> <unk> per share related to the expenses from the convertible debt.
If you were to normalize the loss by adding back the effect of the net convertible debt expenses.
The GAAP EPS improved by <unk> <unk> year over year for the quarter and improved 27 cents year over year for the year to date.
Slide 18.
Slide 18 is a graphic illustration of our operating expenses as presented in.
In detail in our press release.
Other than the comments already pointed out when opex about the relatively flat sequential amounts and the reductions year over year Theres nothing really remarkable in the sequential piece parts of Opex with only relatively minor pluses and minuses between the components of Opex.
It is noteworthy to point out as it did yesterday on the lucid call that the pro forma marginal cost of revenue validates the model of nearly 90% lucid margins for the next patient test walking in the door.
As a reminder, the cost of revenue primarily consists of lucid lab supplies fixed lab facility costs with a much smaller amount attributable to the delivery cost for the various health cancer care platform.
Also noteworthy at all.
Also worthy of repeating some reimbursement status as mentioned on the lucid call yesterday.
Since the new revenue cycle manager Quad X took over in mid June.
5000 claims representing approximately $10 million in pro forma revenue.
<unk> submitted for reimbursement.
70% have been adjudicated.
30% are pending.
Out of the 70% that had been adjudicated.
About 39% resulted in an allowable amount by the insurance company with a mean average of $1863 per test nearly the Medicare rate.
Of those denied about 58% require either additional information or a deemed not medically necessary.
Or require a prior authorization about.
About 36% were deemed to be non covered.
With that operator, let's open it up for questions.
We will now begin the question and answer session.
To ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys and to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Okay.
And our first question today will come from Frank <unk> with Lake Street. Please go ahead.
Good morning, Frank.
Hey, Brian.
Frank Your line is open please check if you're muted.
Good morning can you guys hear me now.
Yeah. This is Ken.
I apologize maybe just to start on the commercial side on the various <unk>.
You mentioned a couple of comments, obviously, there's new leadership there a couple of new market development managers, maybe dive a little deeper into what we should expect for commercial.
Investments related to various over the next couple of years or quarters.
Sure Yeah I think.
The last couple.
A couple of quarters have been really focused on.
Model and the template and the processes and logistics around getting a practice up and running there.
Significant logistics involved with the processes of getting patients on the platform getting them. The box is getting them to the devices, making sure they're connected.
As well as getting the practice on.
On the finishing portal I'm getting that integrated with the.
With the EHR and so forth. So a lot of those kinks have now been worked out.
We've had as I mentioned good feedback from the two practices were really heavily engaged in this and helping us with.
Working out all those Kinks and ultimately what we wanted to do what we wanted to do before pushing harder to to expand.
The number of accounts is to make sure that not only does do things.
Does the integration aspects to this operate smoothly, but we can confirm that the practice is actually able to build that we're facilitating that process through the platform by providing the time stamp.
Current calculation measures and so forth that allow them to bill under these various codes.
Actually getting paid and so we really.
We've really made a ton of progress on that as Dennis mentioned the practices are telling us that we are now that they're they are now cash flow positive and theyre getting paid and so we have two opportunities here one is too.
To drive patient.
Enrollment and patients on the platform at our at existing sites and put in measures to make to try to achieve high percentages of the cancer patients in their practice being on our platform and there's a lot of opportunity to simply drive that within each account and then of course, we as I mentioned, we just hired two very experienced market development managers.
Who are.
I want to take our experience and the story around the streamline processes and the opportunity to quickly get to cash flow positive to new accounts.
That's.
Raring to go and where are they started within the last month, they've completed their orientations and they are now out of the field.
Chasing down leads and opportunities for <unk>.
For us to add accounts across the country.
Really a two pronged approach expanding accounts, but as importantly, making sure that when we're on accounts that now that we've established.
The value to the practice that we can quickly drive too high.
High percentages of patients on the platform. So yeah, you should be seeing those the results.
Our results for that.
Starting to bear fruit in the coming quarters and also.
Also mentioned there is a lot of cancer care in this country is in fact.
Concentrated at large cancer centers, and so we have a separate strategic push and are looking forward to walking down and signing up our first large cancer centers.
It should be obvious the lead times, where that countries are large institutions are longer but once we get the payoffs will be will be great. So we look forward to.
Starting to close.
These large cancer centers that on the Biopharma side, the commercial opportunity in the.
Value creation opportunity there is huge.
Right now we're just an initial discussions and we're working out sort of how the structure of us offering various as a companion to a cancer therapeutic during the post market surveillance period to how the mechanics of that will work out the software development part of it is relatively modest it's more about working with the pharma companies.
To work out the contractual arrangements and the actual for the technical aspects of getting these patients who are in the market surveillance phase.
On the platform. So hopefully that gives you a sense as to what the what the coming quarters.
Or.
Yeah, that's good color and my my second question was going to be on the pharma side of the various platforms. So maybe I'll continue with that thought process, maybe maybe talk about when when we could see some first partnerships across the goal line and then I know I heard your comment about focusing mostly on the post F.
T. A approval stages, maybe talk to why you think that's the most logical area development to focus on and if there is still opportunity to work into some of the clinical trials as well and maybe yes, two or phase III timeframe right. So thanks for the opportunity to kind of flesh that out a little bit. So there's been an evolution in our in our strat.
As you are thinking about this as we've engaged a deeper as you sort of hinted that our initial focus was on.
Pre submission and being engaged during the development process during clinical trials.
And the phase two and three.
Sides of this so that it actually becomes a part of the package FDA submission and we still think that there's a big opportunity. There. The logistics are more complicated we have too.
Sort of interface with <unk>.
And our platform work within the CRM platforms, where this data is being collected but we think there's a big opportunity, but the lifetime of those are going to be greater rights you'd be before we actually see.
Commercial value and that we have to follow the drug through it.
Development.
<unk> through FDA submission until the ultimate Ulf.
Ultimate.
FDA approval, so that that opportunity is still there and the work we'd be doing we'll be doing in the and then in the early phases of this world. The module will be very similar to what it would be for there, but what we noticed as we dug further into this is that there really is an immediate opportunity on the post market surveillance side. So these are drugs that have already been approved.
So we're not waiting for that process. They are in the market and.
One of the several of the contingencies of their approval is that they have.
That they undergo this market surveillance and they have actual they have very well defined.
Care pathways that patients have to go through to.
To be quite to qualify for receiving these new drugs and the process of collecting that data is.
Is critical for the drug to move up.
The chain of treatment. So many of these drugs start as third or fourth line after patients have failed other.
Drug that had been around for longer periods of time instead of the goal of the company is to move up that food chain in order to do that to go to first or second line.
Exponentially expanding the market opportunity in order to do that they have to demonstrate that they've collected the appropriate post market surveillance data and documented.
There.
Safety profile.
Replicated that in real world. So there is a strong.
As an immediate opportunity and there is a strong motivation commercially for them to collect that data quickly and collect data in a way that maximizes the likelihood that they'll hit the safety benchmarks.
So.
A significant opportunity.
Commercial opportunity with the practices, which is not really the case in the pre submission.
Faces a desk, which is bad.
With these new drugs car T and others the practices, that's actually quite lucrative for a practice to administer that and practices or seek to be certified.
Two two administrative which is important for their bottom line and for their patients to get access to this and so by having the practice have the opportunity to be on a platform that facilitates.
The participation in this post market surveillance phase.
As a win for the practice as well so.
In terms of timing.
We are as I said, we have active discussions with several large pharma companies that you would whose names you would recognize and we're filling those early phases, but those are active.
So we certainly hope to add to.
To see one or more of those consummated them in the near future.
Okay. That's good color I'll stop there thanks for taking the question and congrats on all the progress.
Frank.
Sure.
Again, if you have a question you May press Star then one on your telephone keypad.
Our next question here will come from Ed Woo with <unk> capital.
Please go ahead.
Yeah. Good morning, congratulations on all the congratulations on all the progress you've mentioned that forbearance is a big opportunity in the part of pharma is post FDA approval, how big of that opportunity is versus a.
Drugs that are in clinical trials.
Oh I think it's a it's a.
Large if not larger opportunity, but most importantly, it's a more immediate opportunity.
As opposed to sort of the longer timelines for.
For commercial traction in the pre submission phase so.
Has anybody who's paying attention knows there has been a boon.
Really almost the revolution, that's going on right now in oncology therapeutics their drugs.
That are leveraging breakthroughs in science in immunotherapy and others.
Other scientific breakthroughs to deliver drugs that sort of a record pace. So there are numerous oncology drugs that are working their way.
That had been approved.
Our working their way into real world practice and our.
Where the motivation to move up the two first and second line is extremely high so I would I would say that the opportunities are at least as great if not greater but most importantly, the opportunity the timelines of the opportunity for near term engagement and commercial value is substantially greater than the post market.
Yeah.
For some of those who are not as familiar is typically for drugs that are in therapeutics that are approved is there like how it intensive is the monitoring post FDA approval.
So these approvals.
And in a sense.
Conditional rights. So they are they've found them to be safe and effective in there.
Typically PMA.
Trials.
And.
And they're starting their phase III phase III trials, but there, but they're coming out.
And for real World views with very stringent requirements for surveillance, where data has to be collected to demonstrate real world. We'll use that the safety profile has ever demonstrated in the phase three studies are replicated in the real world. So there's a significant.
The amount of data being collected a significant periods of market surveillance and the.
And the way that the drugs are being delivered are under very strictly defined care pathway. So all of that lends itself to a digital health companion platform. So if you have your approved your drug approved in the the agreement with FDA is that you that you offer it lets say its for fourth line therapy and you have.
Actual protocols.
Pathway that patients are supposed to undergo what what kind of testing they're supposed to undergo what their dosing as opposed to be what they're how they're how they're.
Complications are being monitored and reported all of that is explicitly described to the care and care pathway that comes with the approval and so all of that is very amenable and works well within additional health platform that we would seek to capture.
And then again just to reiterate the real commercial opportunity for these for the companies is that if they come out of the gates as a third or fourth line drug.
The market is much smaller and the goal is to use as post post market surveillance phase to demonstrate.
That the drug should move up to move up the chain of therapy to first or second line drugs, which expands the market dramatically. So.
Really really.
We think it's a great opportunity and it's one that.
But we think we'll benefit for a modern digital health tools such as our.
Platform.
Great well, thanks for answering all my questions and I wish you guys. Good luck. Thank you. Thanks I appreciate it.
Yeah.
And our next question will come from Anthony Vendetti with Maxim Group. Please go ahead.
Anthony Thanks.
Good morning, Dennis Good morning, Sean.
And just a follow up.
How are you so just a follow up on the <unk>.
Major academic cancer centers, obviously that.
Sales cycles, probably you know fairly lengthy but would it be accurate to say, it's probably somewhere in the six to 12 month range.
Could it be longer.
How many.
Yeah, I'm sorry go ahead.
Yeah, and then and then I know you had you said a number of centers that you're speaking with.
How many total centers.
Are there.
Are you having conversations with.
And sort of.
Is that.
Would you qualify those that as you.
As part of our qualified pipeline you have or some of them early stage in various forms maybe just a little more color on that yeah, yeah, I'll try to give you some some.
At least qualitative or more.
Deeper quantitative sense of that so yeah active discussions several I would say and these are amongst the largest.
Cancer care centers in the country Youre right lead times can be long, but lead times are going to generally be long for the first one right. So there is an advantage of being the first the first one.
But theres also more work to get somebody to buy into being the first one so I think he referred to it as a qualified pipeline yeah I would definitely describe it is that there is there are there ones in there that are.
We've made enormous progress working up to the C suite getting people to sign off on and we think we're making excellent progress to actually consummating and there are others that are more and more early stages of depression.
Yes.
I've worked in academic medicine for two decades, and I know there are competitive and we certainly feel like one.
<unk> has signed on and can can brag about their cancer.
Cancer specific platform that their patients.
Benefit from there'll be some potential competitive.
Juices flowing for others.
So yes, I think this is not I think there are some potential near term wins here and we are filling the pipeline of of others, along the way and we will have continued to expand the conversations we have.
Okay, and then just switching to the device.
You provided a lot of color on the opportunity to integrate the various platform.
In clinical trials as well as in the actual.
Post market marketing.
All of these new drugs that are there.
In various stages of coming to market.
Maybe maybe just talk about the device itself.
The software.
There's always yes.
We hear obviously always about security breaches and it's you know there's there's a lot of prime securities firms out there trying to trying to prevent that.
Maybe talk about the development of the software the monitoring.
You know how how comfortable do you feel about the security of that in the HIPAA compliance at this stage or is that.
Part of the process, we're working on at this point.
Oh I mean, that's that's good I'm glad you brought that up let me just talk let me just maybe do a little bit deeper dive of the actual sort of what the devices and how it works and how.
And how we been talking to the FDA about it. So this is a effectively the equivalent of the predicate we're using predicates, we're using our interim implantable cardiac monitors that are primarily designed for cardiac monitoring and so the whole landscape the whole FDA process as well as we will get to in a second.
No.
Standards with regard to cyber security.
Our well established for those devices.
They've been around for years and.
We're just following that path so what our device. However device differs is that it includes in addition to the baseline cardiac monitoring other parameters that we've that I enumerated.
Enumerated earlier.
And it has a form function that allows it to.
To be implanted in conjunction with the vascular access part it had that debate that you saw that you can snap as you could snap. This together so yes. It does.
Government process, we've got multiple world class partners that are working with us on this that have extensive experience in developing similar devices, whether it be the circuitry of the battery.
Optimizing software within the device, having Bluetooth connectivity, so that how it how the.
How the data that's collected is transmitted.
And my Bluetooth to the patient's phone and ultimately all of that is is being handled by.
Partnership with <unk>.
Firms that have extensive.
<unk> experience in this and as I said, it's going extremely well the FDA has very high standards with regard to how this data gets collected how it gets transmitted.
Many of those standards are built into the FDA process as I said, we've had numerous interactions with FDA, we're down to our last couple of pre submission meetings on a couple of them. The final features that will get us towards that path towards putting together a five 10-K package.
And submitting it.
The the issue that you raised your important in front and center in these kinds of devices. These days around cyber security and privacy and so forth all of those are or just.
And all of us.
Considerations are deeply built into the design process from day one.
So we're not breaking new ground here, we're just.
Taking established best practices.
And compliance we have a very robust compliance infrastructure, both internally as well as we have dedicated cyber security.
It's dedicated fiber security consultant that frankly, it works across all of our companies on all of our cyber security matters, but obviously.
Intimately involved in this process as well so we're very aware of those considerations and.
All of that work is being done.
The very robust team and.
No.
Really careful attention to the requirements as well as best practices.
Excellent that's great color and then maybe switching just briefly to lucid I know you did the call yesterday.
You have a new revenue cycle management.
Our firm that that seems to.
B producing the results that you're looking for.
I got on the call.
Dennis you mentioned that.
Just on the trends and where you're at.
Fourth quarter.
Could be.
On track for a million or a little bit north of $1 million. It was that accurate I didn't know if I heard that correctly, but maybe just summarize that a little bit for me. Thanks, Yeah. That's that's correct.
First.
Six weeks of the quarter.
Average weekly collections are about 33% higher than the average for the entire prior quarter.
So.
Just doing the simple math Youre correct.
Trending to over $1 million in collections for the fourth quarter.
Okay excellent. Thanks, very much I appreciate it I'll hop back into queue.
Thanks Anthony.
Ladies and gentlemen, this concludes our question and answer session I would like to now turn the conference back over to management for any closing remarks.
Oh, Great Hey, Thank you everyone for your time. Thank you for the excellent questions really excited about this past quarter, but for <unk> and its subsidiaries, particularly in this quarter that lucid Adam we look forward to continuing on that progress as always feel free to.
We will continue to update you.
Through quarterly calls and press releases, but in the interim feel free to contact us with any questions. You can contact my part fit MEP at <unk> Dot com. So thank you for your time and attention and have a great day.
This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.