Q4 2023 Nuwellis Inc Earnings Call
Okay.
Good morning, everyone and welcome to the new Wallets fourth quarter and full year of 2023 earnings conference call.
Unknown Executive: Good morning, everyone, and welcome to the Nuwellis fourth quarter and full year 2023 earnings conference call. All participants will be in a listen-only mode.
All participants will be in a listen only mode because.
Unknown Executive: If you need assistance, please send a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on a touch-tone telephone. To withdraw your question, you may press star and two.
If you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.
After todays presentation, there will be an opportunity to ask questions to ask a question you May press Star and then one using a touchtone telephone withdraw. Your question you May press star and two.
Unknown Executive: Also note, today's event is being recorded. At this time, I'd like to turn the floor over to Vivian Cervantes, Investor Relations. Ma'am, please go ahead.
Please also note today's event is being recorded.
At this time I would like to turn the floor over to Vivian Cervantes Investor Relations Ma'am. Please go ahead.
Thank you operator, good morning, everybody. Thank you for joining us on today's conference call to discuss the wireless it's corporate developments and financial results for the fourth quarter and full year ended December 31 23.
Vivian Cervantes: Thank you, Operator. Good morning, everybody. Thank you for joining us on today's conference call to discuss Nuwellis' corporate developments and financial results for the fourth quarter and full year-end of December 31, 2023. In addition to myself, with us today are Nestor Jaramillo, Nuwellis' President and CEO, Rob Scott, our CFO, and Dr. John Jefferies, our Chief Medical Officer. Mr. Jaramillo is reporting from Boston, where he is attending the 2024 THT conference.
In addition to myself with US today are Mr had a media Neurolysis, President and CEO, Rob Scott, our CFO and Dr. John Jefferies, Our Chief Medical Officer, Mr. Hermes. He is reporting from Boston, where he is attending the 'twenty 'twenty four Tht conference.
Vivian Cervantes: At 8 a.m. Eastern today, Nuwellis released financial results for the quarter and year ended December 31, 2023. If you have not received Nuwellis' earnings press release, please visit the Investor Relations page on the company's website. During this conference call, the company will be making forward-looking statements. All forward-looking statements made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. Any statements that relate to expectations or predictions of future events and market trends, as well as their estimated results or performance, are forward-looking statements.
At eight am eastern today, the wireless released financial results for the quarter and year ended December 31, 2023, if you have not received the wire its earnings press release. Please visit the Investor Relations page on the company's website.
During this conference call the company will be making forward looking statements. All forward looking statements made during the todays call will be protected under the private Securities Litigation Reform Act of 1995.
Any statements that relate to expectations or predictions of future events and market trends as long as our estimated results or performance are forward looking statements. All forward looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those.
Vivian Cervantes: All forward-looking statements are based upon our current estimates and may differ. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. All forward-looking statements are based upon current available information, and the company assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these things.
Dissipated or implied by these forward looking statements.
All forward looking statements are based upon current available information and the company assumes no obligation to update these statements.
Accordingly, you should not place undue reliance on these statements.
Vivian Cervantes: Please refer to the cautionary statements and discussion of risk in the company's filings with the SEC, including the latest 10. With that, I would now like to turn the call over to Nestor. Thank you, Vivian. And good morning, everyone.
Please refer to the cautionary statements and discussion of risk and the company's filings with the SEC, including the latest 10-K.
With that I would now like to turn the call over to Mr.
Thank you Vivian and good morning, everyone. Welcome to dwell is fourth quarter and full year 2023 earnings conference call.
Nestor Jaramillo: Welcome to Nuwellis' fourth quarter and all year 2023 earnings conference call. As Vivian mentioned, I'm currently in Boston attending the Technology and Heart Failure Therapeutics Conference, also known as THD. This conference provides attendees a look into the latest heart failure innovation, focusing on device and technology-based treatment for heart failure. This has been a productive meeting for us, with much to report.
Dominion mentioned I'm currently in Boston that pending the technology on heart failure Therapeutics Conference also known as T. H D D.
This conference provides athene DS are looking into the latest heart failure renal patients.
Focusing on device and technology based treatment for heart failure.
This has been a productive meeting philosophy much to report.
Nestor Jaramillo: Last night we hosted a well-attended symposium titled Aquiferesis, New Technology, and Clinical Development, where four of our key opinion leaders presented three separate significant clinical evidence findings on the safety and efficacy of the Aquadex therapy. Dr. Jefferies will provide more detail later on this call about this symposium. Yesterday, we had one podium presentation showing statistical significance in several endpoints at 30 days, including fewer patients re-hospitalized, fewer days in the hospital due to heart failure readmission, lower re-hospitalization rates due to cardiovascular events, fewer re-hospitalization days due to cardiovascular events, and fewer patients re-hospitalized or experiencing cardiovascular events. More detail on these data will be presented tomorrow in a late-breaking clinical trial presentation. This conference has served as a platform for the clinical reestablishment of the superiority of ultrafiltration using Nuwellis Aquadex technology as compared to the traditional diuretic.
Last night, we hosted a well attended symposium titled Aqua for research, New technological and clinical development work.
Where for a while.
With key opinion leaders presented three separate significant clinical evidence findings on the safety and efficacy of the <unk> steroid.
Dr. Jefferies will provide more detail later on this call on the symposium.
Yesterday, we had one podium presentation showing it statistical significance.
Several end points.
Points at 30 days, including fewer patients re hospitalized fewer days in the hospital due to heart failure readmission lowered re hospitalization rates due to cardiovascular events.
Fewer than we hospitalization days due to cardiovascular events and fewer patients re hospitalization.
For cardiovascular events more detail on these data would be presented more rule in a late breaking.
Clinical trial presentation.
This conference has served as a platform for the clinical reestablish meant all the superiority of ultrafiltration using new wellness Aqua X technology.
Compared to the traditional diabetics.
I'm happy to open our call today with an emphasis on how excited we are about the future of new wellness, despite the difficult environment.
Nestor Jaramillo: I'm happy to open our call today with an emphasis on how excited we are about the future of Nuwellis, despite the difficult environment for micro-cap companies like Nuwellis. With our step-by-step focus on executing upon our strategic growth initiative, positive momentum in our business continues to build. 2024 is poised to be another important year for us, with key value milestones targeted.
Mike ROE cap companies like new wellness.
With our steadfast focus on executing on our strategic growth initiatives.
Also the momentum in our business continues to build.
'twenty 'twenty four is poised to be another important year for <unk> with key value milestones targeted.
Nestor Jaramillo: This includes continued commercial introduction of our strategic collaborator, Seastar Medical, with their selective cyrophoretic device branded Cuolimib for Pediatric, for Treatment of Pediatric Acute Kidney Injury, where we have an exclusive U.S. license and distribution right, and also the steady progress on our product pipeline with our new pediatric dedicated CRRT device branded Vivian. We also look forward to completing our DaVita pilot program in 2024, paving the way for expanded clinical and market access for our aqueduct system. And finally, we expect to complete the IDE submission for Vivian.
This includes continued commercial introduction of our strategic collaborator Seastorm medical.
They're selective diaphoretic device branded to OMB.
For pediatrics for treatment of pediatric acute kidney injury, where we have an exclusive U S license and distribution rights.
And also the steady progress in our product.
Pipeline with our new pediatric dedicated C O R. P device branded VPN.
We also look forward to completing our Davita pilot program in 2020 for paving the way for expanded clinical and market access for our <unk> system.
And finally, we expect to complete the IDE submission for BB&T.
I will dive deeper into each one of these initiatives momentarily I'll provide an overview of our fourth quarter and full year results.
Nestor Jaramillo: I will dive deeper into each one of these initiatives momentarily and provide an overview of our fourth quarter and full year results. Dr. John Jefferies, our Chief Medical Officer, will also discuss recent positive peer-reviewed publications on our Aquadex system, including expanded applications for our therapy to end-stage liver disease, in addition to providing an update on the clinical evidence presented here at the THD Conference. Our Chief Financial Officer, Rob Scott, will provide detailed financial results before opening up the call for questions, followed by my closing remarks.
Dr. John Jefferies, Our Chief Medical Officer will also discuss recent positive peer reviewed publications on our athletic system included including expanded applications for our therapy to the end stage liver disease.
In addition to providing an update on the clinical evidence presented here a Phd conference.
Our Chief Financial Officer, Rob Scott will provide detailed financial results before opening up the call for questions followed by my closing remarks.
I'm pleased to report that we ended 2023 on a high note recording our highest total quarter revenue in the company history.
Nestor Jaramillo: I'm pleased to report that we ended 2023 on a high note, recording our highest total quarterly revenue in the company's history. In the fourth quarter of 2023, Nuwellis generated $2.6 million in revenue, a 9% increase versus the fourth quarter of 2022, led by an increase in disposable utilization and record quarterly international sales. For the full year 2023, Nuwellis generated revenue of $8.9 million, a 4% increase versus the full year 2022. While our overall growth might seem modest at 4%,
In the fourth quarter of 2023, new wells generated $2 $6 million in revenue and 9% increase versus the fourth quarter of 2022.
Led by an increase in disposable utilization and record quarterly international sales.
For the full year 2023, new wireless generated revenue of $8 $9 million, a 4% increase versus full year 2022.
While our overall growth might seems modest at 4% we had a very strong second half will be year, resulting in a 27% revenue growth.
Nestor Jaramillo: We had a very strong second half of the year, resulting in 27% revenue growth compared to the first half of the year. Our capital equipment sales faced industry-wide headwinds in the first half of the year; however, we saw a remarkable turnaround in the second half, with domestic console sales skyrocketing 207% compared to the first half. This signifies strong potential for future utilization growth. Additionally, hospitals navigated budget limitations by utilizing our rental programs, resulting in a 23% year-over-year revenue growth, highlighting the flexibility and affordability that we offer. Despite the nursing staff shortages, the number of patients treated with Aqualex therapy increased by 9% from the first half of 2023 to the second half of 2023, demonstrating the value of our therapy provider. Now back to the fourth quarter results.
Compared to the first half of the year.
Our capital equipment sales faced industry wide headwinds in the first half of the year. However, we saw a remarkable turnaround in the second half with domestic console sales skyrocketing, 207% compared to the first half.
This signifies strong potential for future utilization growth.
Hospitals navigated budget limitations by utilizing our rental programs, resulting in a 23% year over year revenue growth.
Highlighting the flexibility and affordability that we offer.
Despite the nursing staff shortages.
The number of patients treated with Equinix therapy increased by 9% from the first half of 2023 to the second half of 2023, demonstrating the value of our therapy provides.
Now back to the fourth quarter, we source.
In the fourth quarter, our pediatric customer category. Once again led the way with 35% growth over the prior year driven by a 28% increase in utilization and a 49% increase in console sales and.
Nestor Jaramillo: In the fourth quarter, our pediatric customer category once again led the way with 35% growth over the prior year, driven by a 28% increase in utilization and a 49% increase in console sales. Additionally, we opened four new pediatric accounts. Our failure and critical care sales declined 27% and 7%, respectively. For the full year 2023, there was a 7% increase in this possible utilization. The Pediatric Customer Category led with an 11% increase in utilization, followed by Critical Care with a 9% increase in utilization. Our performance was relatively flat, posting a 1% decline in utilization, total sales decreased, and total console sales, excuse me, decreased by 21% for the year because of the industry headwinds we faced in the first half of the year.
And we opened four new pediatric accounts.
Our failure and critical care.
<unk> declined 27% on 7% respectively.
For the full year 2023, there was a 7% increase in disposable utilization.
The outbreak customer category led with an 11% increase in utilization followed by critical care with a 9% increase in utilization.
Our failure was relatively flat posting a one 1% decline in utilization.
Total sales decreased total console sales excuse me decreased by 21% for the year because of the industry headwinds we faced in the first half of the year.
Overall, we continue to drive utilization gains on opening new accounts, which reflects continued increase in the number of patients being treated with <unk> therapy.
Nestor Jaramillo: Overall, we continue to drive utilization gains and open new accounts, which reflects a continued increase in the number of patients being treated with Aquadex therapy on an expanding consult footprint. Now, turning to our recent commercial developments and expected new product introduction. In early January of this year, we were pleased to announce that we received FDA clearance for an additional dual-lumen extended-length peripheral catheter, also called DELWP. The addition of a new 12-centimeter catheter provides clinicians who treat patients with fluid overload with an additional venous access option to use our Aquadex ultrafiltration system. This new 12-centimeter delt has the same features as the longer 16-centimeter option but eliminates the need for trimming when a shorter catheter is needed, ultimately leading to increased patient comfort.
On an expanding consoled footprint.
Now turning to our recent commercial developments unexpected new product introductions.
In early January of this year, we were pleased to announce that we received FDA clearance for an additional dual lumen extended Lang peripheral catheter.
Also called Duck.
The addition of a new 12 centimeter catheter provide clinicians who treat patients with fluid overload with an additional venous access option to use our <unk> ultra filtration system.
These new 12 centimeter Delek has the same features as the longer 16 centimeter option.
But eliminates the need for trimming when its shorter catheter use need it.
Ultimately leading to increase patient comfort.
Nestor Jaramillo: The introduction of this new acid catheter should be well received, with clinicians confirming to us the need for this product on February 22nd. We were pleased to announce that our strategic collaborator, Seastar Medical, received the Humanitarian Device Exemption, or HDE, from the FDA for its selective cytokine, cytoperiodic device, also called SCD, branded Creolamine, for Use in Pediatric Acute Kidney Injury Patients. We have the exclusive U.S. license and distribution rights for Qualamine, and we have begun commercial launch activities at targeted medical centers with further commercial expansion expected later in the first half of this year.
Production of these new active catheter to be well received with clinicians confirming to us the need for this product.
On February 22nd.
We were pleased to announce that our strategic collaborator feedstock medical received the humanitarian device exemption or H D E from the FDA for its selective cytokine silo Paretic device also called S. C D branded grill I mean.
Or used in pediatric acute kidney injury patients.
We have exclusive U S license and distribution rights for calling me and we have begun commercial launch activities targeted medical centers with further commercial expansion expected later in the first half of this year.
The unique technology behind quality immune.
Nestor Jaramillo: The unique technology behind Qualimmune has demonstrated a 50% reduction in mortality rates in children with potentially deadly hyperinflammation. The addition of this product to our growing pediatric customer category will help save the lives of many pediatric patients and further bolster our top line growth. We also remain encouraged by our own internal product development program as we continue to advance the development of our pediatric continuous kidney replacement therapy device branded as Vivian. We, along with many pediatric nephrologists, believe this product will have an extremely positive impact on survival and significantly improve the lives of neonates and small children with kidney malfunction, kidney issues, or those born without kidneys. This device is complementary to C-STAR's Medical Qualimune, and we believe these two products will add tremendous value to our growing portfolio of products for pediatric patients with fluid overload and renal disease.
<unk> demonstrated a 50% reduction in mortality rate in children with potentially deadly hyper inflammation.
The addition of these products to our growing pediatric costumer cholera Gorey will help save lives of many pediatric patients and further bolster our topline growth.
We also remain encouraged by our own internal product development program as we continue to advance development of our pediatric continuous kidney replacement therapy device branded is brilliant.
We along with many pediatric Nephrologist believe this product will have extremely positive impact on survival and significantly improve the lives of neonates and small children with kidney malfunction kidney issues or those born without kidneys.
This device is complementary to see stars medical called immune.
And we believe these two products will add tremendous value to our growing portfolio products with pediatric patients with fluid overload.
And renal disease.
Our collaboration with WD is progressing well.
John Lynn Jefferies: Our collaboration with DaVita is progressing well, with both teams actively engaged in key areas like pilot selection, patient criteria development, Target Metric definition, and Establishing Patient Care Pathways and Order Sets for Medical Staff to Start Treating Patients. We recognize the novelty of this initiative for DaVita, for hospitals, and for us at Nuwellis, and we are taking a meticulous approach to ensure a successful pilot launch. This initiative will enable us to begin treating patients in the inpatient setting with DaVita's personnel and resources. We look forward to sharing further updates of this program's progress in the near future. I would now like to turn the call over to our Chief Medical Officer, Dr. John Jefferies, to discuss recent peer-reviewed publications on our Aquadex system and provide an update on last night's symposium.
With both teams actively engage in key areas like pilots selection patient criteria development.
Target metric definition.
In establishing patient care pathways and order sets for medical staff to start treating patients.
We recognize the novelty of this initiative for Davita for hospitals and for all of US at New Wells and we are taking a meticulous approach to ensure a successful pilot launch.
We will enable us this initiative will enable us to begin treating patients in the inpatient setting with Davita personnel resources.
Look forward to sharing further updates of these program advances in the near future.
I would now.
Now like to turn the call over to our Chief Medical Officer, Dr. John Jefferies to discuss recent peer reviewed publications on our <unk> system.
Provide an update on last night's symposium.
John Thank you Nestor and good morning, everyone.
John Lynn Jefferies: Thank you, Nestor, and good morning, everyone. We're pleased to continue to expand our clinical evidence, including a symposium yesterday at THT on the clinical merits of Aquadex for a growing number of patients. THT is a conference attended by heart failure specialists who are looking for innovative medtech solutions. The presentations at the symposium last night highlighted three important topics, including the role of ultrafiltration in the treatment of acute decompensated heart failure, a clinical comparison of ultrafiltration and diuretics using the data from a 224 patient trial called AVOID-HF, and the best practice for ultrafiltration from a high volume center. These three presentations further reinforced the efficacy of ultrafiltration, reestablishing aqueducts as the preferred method of treating congestion in patients with fluid overload resistant to diuretics.
We're pleased to continue to expand our clinical evidence, including a symposium yesterday at th tea on the clinical merits of Aqua decks for a growing number of patients.
<unk> T is a conference attended by heart failure specialists, who are looking for innovative med Tech solutions.
The presentations at the symposium last night highlighted three important topics, including the role of ultrafiltration and the treatment of acute de compensated heart failure.
Clinical comparison of ultrafiltration and diabetics using the data from a 224 patient trial called avoid HFF and the ultrafiltration best practice from a high volume Center.
These three presentations further reinforced the efficacy of ultrafiltration reestablishing <unk> as the preferred method of treating congestion and patients with fluid overload resistant to diabetics.
John Lynn Jefferies: Of the recent clinical publications that featured the benefits of our Aquadex therapy, let me highlight the new case series featured in clinical transplantation, which demonstrated the potential of Aquadex to safely and effectively remove fluid volume for end-stage liver disease patients who do not respond to diuretics. These findings present a new clinical application for Aquadex already within its current FDA labeling and adds a new patient population for treatment. The publication is a single-center, retrospective case series that assesses the utilization of aquapheresis therapy with Aquadex in the intensive care unit setting at Mt. Sinai Hospital between January 2020 and July 2023. Fourteen severely ill patients with end-stage liver disease were treated with the Aquadex system during this period.
Of the recent clinical publications that featured the benefits of our Aqua <unk> therapy, Let me highlight the new case series featured in clinical transplantation, which demonstrated the potential of <unk> to safely and effectively remove fluid volume for end stage liver disease patients, who do not respond to diuretic.
<unk>.
Of note the findings present, a new clinical application for awkward eggs already within its current FDA labeling and adds a new patient population for treatment.
The publication as a single center retrospective case series that assessed the utilization of Aqua Pheresis therapy with Aqua decks in the intensive care unit setting at Mount Sinai Hospital between January 2020, and July 2023.
14 severely ill patients with end stage liver disease were treated with the awkward X system. During this period.
John Lynn Jefferies: For clinicians treating patients with end-stage liver disease, it can be an enormous challenge to remove fluid when patients don't respond to or can't tolerate diuretic therapy safely and effectively. This study demonstrates a new application for the Aquadex system in a large and growing patient population with end-stage liver disease. Unlike continuous renal replacement therapies, Aquadex allows for slow, controlled, and predictable fluid removal that can be adjusted to reduce the risk of kidney injury and help alleviate the hepatorenal syndrome.
For clinicians treating patients with end stage liver disease. It can be an enormous challenge to remove fluid when patients don't respond or can't tolerate diuretic therapy safely and effectively.
This study demonstrates a new application for the aqueduct system for a large and growing patient population with end stage liver disease.
Unlike continuous renal replacement therapies <unk> allows for slow controlled and predictable fluid removal. It can be adjusted to reduce the risk of kidney injury and help alleviate the powder renal syndrome.
Nestor Jaramillo: Additionally, treatment with Aquadex may help patients participate in physical therapy and help better prepare them for subsequent surgery and liver transplantation. Let me turn it back over to Nestor. Thank you. Thank you, Dr. Jefferies. I'd like to now return the call to discuss our Q4 financial results, and I'm going to turn it over to our CFO, Rob Scott. Thank you, Nestor, and good morning, everyone.
Additionally, treatment with <unk> may help patients participate in physical therapy, and help better prepare them for subsequent surgery and liver transplantation.
Let me turn it back over to next door. Thank you.
Thank you Dr <unk> of Jefferies.
I'd like to now turn the call to discuss our Q4 financial results and I'm going to turn it over to our CFO Rob Scott.
Thank you Nestor and good morning, everyone.
Robert B. Scott: Turning to the Q4 financial results, revenue for the fourth quarter was $2.6 million, representing 9% year-over-year growth and a 6% sequential increase from the third quarter of 2022. This follows a similarly strong third quarter, which saw 16% growth over Q2 2020. Our pediatric customer category had the strongest growth in Q4, with a 35% increase year-over-year; heart failure and critical care decreased 27 and 7% percent. Gross margin was 54.4% for the fourth quarter compared to 56.9% in the prior year quarter. The margin decline is primarily driven by product and geographical sales mix and lower fixed overhead manufacturing absorption, leading to more efficient inventory levels.
Turning to the Q4 financial results revenue revenue for the fourth quarter was $2 $6 million.
Representing 9% year over year growth and a 6% sequential increase from the third quarter of 2023.
This follows a similarly strong third quarter, which saw 16% growth over Q2 2023.
Our pediatric customer category had the strongest growth in Q4, with a 35% increase year over year.
Heart failure in critical care decreased 27, 7% respectively.
Gross.
<unk> was 54, 4% for the fourth quarter compared to gross margin of 56, 9% in the prior year quarter.
The margin decline is primarily driven by product and geographical sales mix and lower fixed overhead manufacturing absorption leading to more efficient inventory levels.
Selling general and administrative expenses were $3 $6 million in the fourth quarter, a decrease of 23% as compared to $4 $7 million in the fourth quarter of 2022.
Robert B. Scott: Selling general and administrative expenses were $3.6 million in the fourth quarter, a decrease of 23% as compared to $4.7 million in the fourth quarter of 2022. The decrease in SGNA was primarily due to reduced head count and related compensation. Fourth quarter research and development expense was $1.4 million compared to $1.2 million in the prior year period.
The decrease in SG&A was primarily due to reduced headcount and related compensation expense.
Fourth quarter research and development.
Development expense was $1 4 million.
Compared to $1 2 million in the prior year period.
Robert B. Scott: Reflecting a modest increase in R&D spend related to the development of our new pediatric dedicated CRRT device as we approach IDE submission. In the current year period, the company recorded a non-recurring expense reduction of approximately $800,000, reducing incentive compensation, impacting both SG&A and R&D. Additionally, the company recorded a $550,000 SG&A expense in the current year period for contractual spend related to the C-START license and distribution.
Reflecting a modest increase in R&D spend related to the development of our new pediatric dedicated C or D device as we approach.
<unk> submission.
In the current year period, the company recorded a non recurring expense reduction of approximately $800000, reducing incentive compensation impacting both SG&A and R&D.
Additionally, the company recorded a 550000 dollar SG&A expense in the current year period for contractual spend related to the fees start licensing and distribution agreement.
Robert B. Scott: Total operating expenses were $5 million in the quarter, a decrease of approximately $884,000 as compared to the fourth quarter of 2022. The period-over-period decrease was due to cost-saving measures implemented early in the second half of the year and carried through year-end 2023 as we continue to drive operating efficiency. Operating loss in the fourth quarter was $3.6 million compared to an operating loss of $4.5 million in the prior year period, resulting in a $941,000 period over period reduction.
Total operating expenses were $5 million in the quarter decrease of approximately $884000 as compared to the fourth quarter of 2022.
Period over period decrease was due to cost saving measures.
Implemented early in the second half of the year and carried through year end 2023, as we continued to drive operating efficiencies.
Operating loss in the fourth quarter was $3 6 million compared to an operating loss of $4 5 million in the prior year period, resulting in a $941000 period over period reduction.
Net loss attributable to common shareholders in the fourth quarter was $7 9 million.
Robert B. Scott: The net loss attributable to common shareholders in the fourth quarter was $7.9 million, or a loss of $2.24 per share, compared to a net loss attributable to common shareholders of $1.9 million, or $5 per share, for the same period in 2020. The current period net loss attributable to common shareholders includes $2 million of other expense and $2.4 million of a deemed dividend and PIC dividend related to the company's October 2023 The prior year period net loss attributable to common shareholders includes $2.6 million of other income related to the company's October 2022 financing. We ended the fourth quarter with $3.8 million in cash and cash equivalents and with no debt on the balance.
Or a loss of $2.24 per share compared to a net loss attributable to common shareholders of $1 9 million or.
Our $5 per share for the same period in 2022.
The current period net loss attributable to common shareholders includes $2 million of other expense and $2 $4 million of a deemed dividend and pik dividend related to the company's October 2023 financing.
The prior year period net loss attributable to common shareholders includes $2 6 million of other income related to the company's October 2022 financing.
We ended the fourth quarter with $3 $8 million of cash and cash equivalents and with no debt on the balance sheet.
Understanding the near term need to raise capital we have recently undertaken steps to reduce our monthly cash burn rate by approximately 40% balanced against our strategic growth initiatives, which will provide more flexibility in anticipation of tougher capital market conditions for <unk>.
Unknown Executive: Understanding the near-term need to raise capital, we have recently undertaken steps to reduce our monthly cash burn rate by approximately 40 percent, balanced against our strategic growth initiatives, which will provide more flexibility in anticipation of tougher capital market conditions for micro-cap companies like Nuwellis. This concludes our prepared remarks. Operator, we would now like to open the call to, Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then one on a touch-tone telephone. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality.
Low cap companies like new relic.
This.
Our prepared remarks, operator, we would now like to open the call to questions.
Ladies and gentlemen at this time well begin the question and answer session.
To ask a question you May press Star and then one on a touchtone telephone.
You are using a speaker phone would you asking please pick up the handset prior to pressing mckeith to ensure the best sound quality.
Withdraw your question you May press Star two.
Unknown Executive: Withdraw your questions, you may press star and two, again that is star and then one. To join the question queue, we'll pause momentarily for some of the rest. Our first question today comes from Jeffrey Cohen from Lattenberg Bauman. Please go ahead with your question. Hi Nestor, Dr. Jeffries, and Rob, how are you? Good morning, very well. How are you?
Once again that is star and then one.
Joining the question Hugh will pause momentarily to assemble the roster.
Our first question today comes from Jeffrey Cohen from Ladenburg Thalmann. Please go ahead with your question.
Hi, Mr Dark future accretion, Rob how are you.
Good morning, very well how are you.
Just find a couple of questions for Laura and so could you talk about the.
Unknown Executive: Just a couple of questions from our end. So could you talk about the C-STAR Quell Immune device as far as any patient experience thus far, or what you're saying is a second-half launch? Most of, if not all of, the clinical experience with Qualimun has been in the clinical study that they have done, that they have performed. We have not done any patients under the collaboration agreement yet.
His store Korlym means devices for any patient.
<unk>, thus four or whether you are seeing is a second half launch.
The most of if not all of the clinical experience with quality Moon has been in the clinical studies that they have done. They have performed we have not done any patients under <unk>.
The.
Collaboration agreement yet.
Nestor Jaramillo: Now that we have the HDE, the next step is for each site to get its own IRB approval, so we are in that process right now, and then the utilization can start. Okay, I got it.
We know that we have the HD. The next step is for since it's an H D E approval each site needs to get their own IRB approval. So we are in that process right now.
And then with the <unk>.
Utilization can start.
Okay got it.
Nestor Jaramillo: And next, Lee, is the Delta catheter, the 12 centimeter one? Is that also being manufactured in your facility? That is correct. Yeah, it is being manufactured in our facility.
Next week is the the Dell catheter. The 12 centimeter. One is also being manufactured in your facility.
It is correct Jeff.
Is being manufactured in our facility and we plan to start.
Nestor Jaramillo: And we plan to start selling it in the next two weeks. Got it? And then could you compare and contrast with us, what's working in PEDS that's so beneficial in top-line growth, and what's not working, in particular in heart failure, that's driving the decline? Okay, regarding pediatrics. The babies, this pediatric started back in 2019 with a very landmark publication, which shows that when you have kids under 10 kilograms born with renal disease or absence of kidneys, having a continuous renal replacement therapy to act as the kidneys of the children is beneficial. However, there has not been a pediatric dedicated device.
Selling it in the next two weeks.
Got it.
And then could you.
Compare and contrast, with us what's working and page that show beneficial on the topline growth rewards not working in particular in heart failure.
That's driving the decline.
Okay regarding the pediatric.
Okay.
Babies this.
This pediatric started back in 2019 with a very a landmark publication, which shows that when you are.
Kids under 10 kilograms, born with renal disease or absence of kidneys, having a continuous renal replacement therapy to act as the kidneys of the children.
Is beneficial however, there has not been a pediatric dedicated device.
Nestor Jaramillo: Children are treated with adult CRR because aquatics have such a slow rate, flow rates, as well as its very small extracorporeal volume of fluid, it became very safe, gentle, and effective in treating these children under 10 kilos. The fact of the matter is that there was not such a therapy. The results of this study show that patients under 10 kilograms treated with Aquadex survived the therapy at a rate of 66 percent. So that's what drove our business. That started in 2019. And I'm just going to make a parenthesis here because that's exactly what we are seeing right now with end-stage liver disease. So coming back to the pediatric population, I mentioned the reason for the success in the pediatric population because there is no other therapy. In heart failure, the decline is something that is explainable.
Most of this.
Children are treated with adult CRT beat.
Because of the <unk> have such as look slower rate.
Strong rates as well if it's very small extracorporeal volume of fluid he became very safe.
General and effective to treating these children under 10 kilograms.
The fact of the matter is that there was not such a therapy.
The results of this study shows that patients under 10 kilograms to either with the acrobatics survive the therapy at a rate of 66%.
So that's what drove our business that started in 2019.
And I'm, just going to make a brain disease here because that's exactly what it is what we are seeing right now with the end stage liver disease.
So coming back to the pediatric I mentioned the reason for the some sales on the pediatric because there is no other therapies.
Heart failure the decline is.
Something that.
That is.
Explainable.
We believe that now with the clinical data that we have.
Nestor Jaramillo: We believe that now, with the clinical data that we have, there will be more appetite for using Aquadex in heart failure patients. You know, we're still working on our evidence for reimbursement. So once we get those in place, we'll see, and we expect to have an increase in sales. I can provide a little bit more color on just the heart failure decline specifically for the quarter. Again, from a dollar's perspective, it was about a $160,000 decline.
That would be more appetite for using the <unk> in heart failure patients.
We still are.
Working on it.
Our evidence that reimbursement so once we get those in place we will see we expect to have an increasing sales.
Sure I can provide a little bit I can provide a little bit more color on just the heart failure decline specifically for the quarter again.
From a dollars perspective, it was about $160000 decline again.
Unknown Executive: Again, the percentages kind of get kind of wild, but the $160,000 was the total dollar amount. About $90,000 of that was driven by capital sales, so about a $90,000 reduction. So we had three fewer capital sales period over period. So again, a majority of that is driven by capital, which can be lumpy from time to time. Utilization kind of made up the balance there. We had a couple of accounts that were just a little bit soft in Q3, just a handful of them.
<unk> kind of give kind of wild, but but the $1 60 was the total dollar amount.
<unk>.
About 90000 of that was driven by capital sales saw about a $90000 reduction. So we have three less capital sales.
Our period over period, so again, a majority of that is driven by capital which can.
It can be certainly lumpy from time to time utilization kind of made up the balance there. We had a couple a couple of accounts that were just a little bit soft in Q3, just a handful of them.
Unknown Executive: You know, if those accounts had come in where we typically expect them, this quarter could have been an even better quarter for us as far as revenue goes. Thank you. This is helpful. Yeah. And then lastly for us, can you talk about what the current commercial footprint as far as FTE is out there and maybe give us a breakdown of the commercial organization focus in what particular area? We have about 23 people in this field right now, nine of them are account managers, the other 14 are clinical specialists that provide clinical and technical support in the hospital, and all the utilization growth that Rob just mentioned is purely organic. Got it. Okay, great. Thanks for taking our questions. That does it for us.
Stainless both comp sort of came in where we typically expect.
This quarter could have been.
Even a better quarter for us as far as revenue goes.
Okay got it that's helpful.
Yes.
And then lastly, first can you talk about what's the current commercial footprint as far as our Skus out there and maybe give us a breakdown of our.
The commercial organization to focus on what particular areas.
We have about 23 people in the field right now nine of them are account managers and the other 14 or clinical specialist that provide clinical and technical support in the hospitals.
And all the utilization growth that Rob just mentioned, it's been purely organic.
Got it okay Super Thanks for taking our questions that those are for us.
Thank you.
Unknown Executive: Thank you. Once again, if you would like to ask a question, please press star and then one to withdraw your question, you may press star and then one again. Our next question comes from... Anthony Vendetti from Maxim Group. Thank you. Yeah, so just on the CSTAR device, the SCD device, and because they have HDE, you can now go forward, but each hospital has to get its IRB. How long does that take?
Once again, if he would like to ask a question. Please press star and then one to withdraw your question you May Press Star two.
Our next question comes from.
Anthony Vendetti from Maxim Group. Please go ahead with your question.
Thank you.
Just on the on the <unk> device.
Yes.
Right.
So because they have HD you can now go forward, but each each hospital has to get their IRB, how long does that take.
Unknown Executive: And are you targeting the hospitals where you're already? We already have relationships with your Aquadex system, and then, What's the plan to roll out beyond that? Is that a multi-quarter plan, or do you feel that, as you start to commercialize it into your current base, you can simultaneously start marketing this device with your device to other hospitals? Good questions, Anthony.
And are you targeting.
The hospitals, where you already.
We already have relationships.
With with your Aqua Tech system and then.
What's the plan too.
Our rollout beyond that is that is that.
Multi quarter plan or.
Do you feel.
As you start to commercialize it into your current base you.
You can simultaneously start marketing this.
This device with your device.
The other other hospitals.
No.
Good questions Anthony let me see if I can answer the.
Nestor Jaramillo: Let me see if I can answer the... three-question part there. The first part was you talked about the period that it takes to get the IRBs, and it depends on the hospitals. You know, some hospitals will have IRBs that need them on a monthly basis, on a bi-weekly basis, so we expect those to be a lot quicker. Other ones use generic IRBs, so that may take a little longer. So that's on the time of the IRBs. But the reason that they require IRBs is because this is a humanitarian device exemption, but the FDA is not the regular 510-K approved. In terms of the overlap, which was the second part of your question, the reason why we believe that this collaboration is so strategically aligned between the two companies is because of that. The majority of the centers that participated in the clinical studies of QuelImmune are the same customers that are using our product and are reporting on our product.
Three question parts there.
The first one part was you talked about the period that it takes to get the IRB and it depends on the hospitals. Some hospitals will have IRB that need on a monthly basis on a bi weekly basis. So we expect those to be a lot quicker although once use.
Yeah.
General Irb's, so that may take a little longer.
So that's on the IR at the time of the IRB, but the reason that they require IRB sees because this is a humanitarian device exemption by the FDA is not the regular <unk>.
I think K approval.
In terms of the overlap which was the second part of your question.
The reason why we believe that this collaboration is so.
Strategically fit between the two companies is because of that.
Majority of the centers that participated in the clinical studies of equality Moon.
Are the same customers that are using our product and our reporting on our products. So they are the big top pediatric accounts in the United States. So there was a significant overlap on that.
Nestor Jaramillo: So they are the top pediatric accounts in the United States, and there was a significant overlap between those. So the first five, and this starts to answer the third part of your question, of the first five accounts that we're targeting, three of them are top users of the Aquanet device.
So the first five and this starts to answer your third part of your question.
First five accounts that were targeting.
Three of them are top users of the Equinix device.
Nestor Jaramillo: And then after that, we're going to roll out the following quarter. We're going to continue adding another 10 and so on until we have a full one. Okay, great.
And then after that we're going to roll out the following quarter, we are going to continue adding another 10 and so on until we have it full launch.
Okay, Great and then.
Unknown Executive: Obviously, since there is a lot of overlap, it seems like there's obvious cross-selling opportunities. You know, does that go both ways? In other words, you see stars in in some hospitals that you're not in. And does that make it easier?
Obviously since there is a lot of overlap.
It seems like Theres obvious cross selling opportunities.
Does that go both ways in other words, you see star in in some hospitals that you're that you are not and does that make it easier.
Do you believe.
Unknown Executive: Do you believe we can sell the aqueduct system as well? Absolutely, yeah, by being there with Quality Immune, it's an opportunity to talk about AquaDex, our current device, and also start paving the way for our pediatric dedicated, Good, that's what I thought. And then on the cost cutting, um, you, I heard a 40%... cut in monthly costs. Can you outline where that is coming from and then when did the cuts start? Yeah, it started in March.
No.
The <unk> system as well.
Absolutely yeah by being there with quality immune he sees an opportunity talk about <unk> our current device.
And they also start paving the way for our pediatric dedicated device.
Okay. Good that's what I thought and then on the <unk>.
The cost cutting.
I heard 40% cut.
Cut in monthly costs can you outline.
Where that is coming from and then when did that.
The cuts start.
Happening what month mhm yeah.
He started in March March 1st and they are general expenses.
Nestor Jaramillo: March 1. And there are general expenses. We're becoming more efficient in our headquarters in terms of the people that we need for our strategic growth initiative. It also includes travel and expenses and also includes salary cuts for the executive team and also the board of trustees.
We are becoming more efficient in our headquarter.
Headquarters.
In terms of the people that we need for our strategic growth initiatives.
It also includes travel and travel.
Travel expenses and also includes salary cuts for the executive team.
And also would be.
And the board fees.
I see and it does it sounds like.
Nestor Jaramillo: I see. And it sounds like, obviously, critical to your success is the clinical specialist and the sales. So that's, that's an area that has pretty much, I wouldn't say off-limits, but hasn't, formed the brunt of the cost cutting at this point.
Obviously critical to your success as the clinical specialists in the sales.
With that.
It's an area that has pretty much.
I wouldn't say off limits, but what hasnt.
Borne the brunt of the cost cutting at this point is that correct.
Unknown Executive: Is that correct? Correct, correct. We're not touching the sales organization as they are key for continuing our growth in 2021. Okay, and then lastly, some companies at this stage also employ, you know, independent distributors. Is there an opportunity to do that to help further spur sales?
Correct correct, we're not touching the sales organization as they are key for continuing our growth in 2024.
Okay, and then lastly.
Some companies at this stage also employ.
Independent distributors is there is there an opportunity to do that to help further spur sales.
Nestor Jaramillo: going forward. Absolutely. Yeah, we have two of them in key markets for us. One is in New York City, and the other one is in Northern California.
Going forward.
Absolutely Yeah, we and that's a very good point, Anthony and we have two of them.
In key markets for US one is in New York City and deal and one is in northern California.
So we continue to look at opportunities to add more of these type of independent distributors.
Unknown Executive: So we continue to look at opportunities to add more of this type of independent distributor. Okay, great. Thanks so much. Appreciate it. Appreciate the call.
Okay, great. Thanks, so much appreciate it appreciate all the color.
Nestor Jaramillo: Yes, thank you. And, ladies and gentlemen, with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Nestor Jaramillo, CEO, for closing remarks. Yes, thank you everyone for participating. As I mentioned before, we're very excited about 2024. We continue to execute on our strategies, redesigning our commercial strategy by adding DaVita and adding the collaboration with C-STAR. We're also continuing our product development with our pediatric dedicated device, and we continue to commit it to clinical research with our reverse heart failure trial. I want to thank all our stakeholders, including our employees, stockholders, medical staff, physicians, and healthcare workers. Without your help, we would not be able to achieve the transformation in the lives of patients suffering from prubate overload. Thank you. Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining us. You may now disconnect your line.
Yes, Thank you Anthony.
And ladies and gentlemen, with that we'll be concluding today's question and answer session I would like to turn the floor back over to Mr. Jaramillo far CEO for closing remarks.
Okay.
Yes, thank you everyone for participating.
Mentioned before we're very excited about the 2024, we continue to execute on our strategies.
Redesigning, our commercial strategy by adding that Davita and adding the collaboration with <unk>. We will also continue our product development with with our pediatric dedicated device and we continue to commit it to clinical research without would reverse heart failure trial.
I want to thank all our stakeholders, including our employees.
Stockholders.
Medical staff physicians and health care workers without your help we will not be able to achieve the transformation in the lives of patients suffering from fluid overload.
Thank you.
Ladies and gentlemen, with that we'll conclude today's conference call and presentation. We thank you for joining you may now disconnect your lines.
Yeah.
Okay.