Q4 2023 TriSalus Life Sciences Inc Earnings Call
Okay.
Good morning, and welcome to Trust Lifesciences fourth quarter and full year 2023 earnings Conference call. Currently all participants are in a listen only mode. We will be facilitating a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes I would now like to turn the call over to your host Jim Young Senior Vice President Investor Relations.
Jim Young: And treasurer at <unk>.
Jim Young: For a few introductory comments.
Jim Young: Thank you all for participating in today's call joining me today from <unk> Life Sciences are married to our President and Chief Executive Officer, John Murphy, Chief Financial Officer, and Dr. Steven Katz, Chief Medical Officer earlier this morning <unk>.
Jim Young: It was released unaudited financial results for the fourth quarter and full year ended December 31, 2023, the copy of the press release is available on <unk> website.
Jim Young: Before we begin I would like to remind you that management will make statements. During this call that includes forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provisions of the private Securities Reform Act of 1995.
Jim Young: Any statements contained in this call other than statements of historical fact are forward looking statements all forward looking statements, including without limitation statements related to our sales and operating trends business and hiring prospects financial and revenue expectations. The timing of the filing of <unk>.
Jim Young: Our annual report on Form 10-K, and future product development and approvals are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties, including the impact of macroeconomic conditions and global events that could cause actual results or events to <unk>.
Jim Young: <unk> differ from those anticipated or implied by these forward looking statements. Accordingly, you should not place undue reliance on these statements for a list and description of the risks and uncertainties associated with our business. Please refer to the risk factors section of our Form 10-Q on file with the SEC and avail.
Go on Edgar and in our other reports filed periodically with the SEC.
Jim Young: <unk> disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise. This conference call contains time sensitive information and is accurate only as of the live.
Jim Young: Broadcast today April one 2024 as.
Jim Young: As noted in our press release <unk> has filed or will soon file a form <unk> 25 notification of late filing with the SEC related to the Companys annual report on Form 10-K for 2023. This filing provides the company an extension of up to 15 days to file.
The company's annual report if the company filed its annual report within such 15 day period. The annual report will be deemed to have been filed timely as if we had filed and the due date prescribed by the SEC. The company filed form <unk> 25, primarily due to the calculation of noncash stock.
Jim Young: Compensation expense caused by data errors associated with a transition to a new service provider in 2023.
Jim Young: As a result, the operating results provided on the call today are unaudited and subject to potential adjustments.
Jim Young: And with that I'll turn the call over to Mary.
Mary: Good morning, and thank you for joining today's call.
Mary: I am pleased to reflect on the significant milestone achieved by cross seller in 2023.
Mary: Marketing a pivotal year in our company's journey.
Mary: We've made substantial progress in advancing our disrupted drug delivery technology <unk> aimed at enhancing therapeutic outcome.
Mary: And pancreatic tumors.
Mary: Furthermore.
Mary: Also excited to highlight our strides in integrating our technology with our investigational immunotherapy.
Mary: <unk>.
Mary: Classy toll like receptor agonists across various liver and pancreatic indication.
Mary: Together these signify.
Mary: Signify our commitment to advancing outcomes for patients suffering with liver compete created tumors.
Mary: This morning, I'd like to speak to you regarding our quarterly results as well as the achievements in the past year, which have created a strong foundation for future growth.
Mary: In the midst of a challenging economic environment.
Mary: People delivered 37% growth in the fourth quarter.
And 49% operational growth for the year.
Mary: We're pleased to report that we delivered another high growth quarter, concluding a very strong year of top line revenue growth.
Mary: <unk> continues to execute the key components of our company building strategy, which include 50% topline revenue growth advancing our pipeline improving manufacturing and gross margin.
Mary: Kieran permanent reimbursement.
Mary: Hearing can manage costs, while investing wisely and finally accessing the public markets.
Mary: <unk> executed on our key objective, creating a strong foundation for future growth and pipeline advancement.
None: First let me begin with the accomplishments in the past year.
None: <unk> achieved $18 5 million in net sales.
None: <unk>, 49% growth over 2022.
None: Earning tristylous recognition as one of the fastest growth Med Tech technologies.
None: Price Dallas.
None: Our unique and permanent fixed pin code for training App from CMS.
None: <unk> 797.
None: <unk> has been assigned to APC $5 94 level for Endovascular procedures.
None: Code can be used without restriction for any embolization or inclusion procedure.
None: Justin with the Tri net instructions per year.
None: And is reimbursed in the hospital outpatient and ambulatory surgery centers.
None: This allows for physicians to use <unk> broadly for both mapping and embolization procedures.
None: We completed enrollment in phase one clinical trials in Uveal melanoma liver metastases.
None: A failure of Cantor.
None: Intra hepatic <unk> carcinoma.
None: Leading academic oncology centers across the United States in.
None: In this trial <unk> devices are used to administer our investigational immunotherapy candidate.
None: <unk> through our regional Intervascular approach for patients with liver and pancreatic tumors data from these trials will emerge in the second half of 2024.
None: We'll determine which indications to progress.
None: We initiated first in man phase one clinical trial of our novel pancreatic infusion technology, plus now told not to demonstrate safety and efficacy.
None: We conducted a large health economic and outcome research study 300 million patient dataset covering over 98% of U S patients capturing real world safety and clinical outcomes for China in its launch phase 2020 through 2022 demonstrating.
None: China of patients despite a higher baseline disease burden and clinical complexity third overall clinical results that were comparable to patients with lower disease burden.
None: Advanced our technology pipeline with five 10-K clearance for China of large and are trying to guide and finally substantially improved manufacturing yield improvements, resulting in gross margins approaching 90%.
None: These results were made possible by the concerted efforts of trace Allyson Pooley, United under the leadership of <unk> management.
None: With extensive experience in pioneering new markets executing on strategic initiatives and managing complex environment now.
None: Now, let me turn to the future growth of trade Dallas, We believe trace analysis poised for breakout growth in 2024, due to permanent reimbursement and robust clinical and real world evidence data for China.
None: As mentioned earlier <unk> published health economic and outcome research study looking at real World evidence, capturing both safety and clinical complications data for <unk> as compared to conventional catheters or the 2020 to 2022 time period.
None: This study utilized a large 300 million patient dataset covering 98% of U S payers.
None: These data, which compared key characteristics and clinical complication rates of 258, ped patients with dose of 8949 PPD patients.
None: <unk> valuable insights into the benefits of <unk> technology. This.
None: This would otherwise taken many years to accumulate through alternative approaches for example, randomized controlled trials.
None: Key findings include that China of patients, despite a higher baseline disease burden and clinical complexity as compared to non <unk> patients.
None: So in overall clinical results comparable to the patients with lower disease burden.
None: The study also revealed the following.
None: Kind of patients were more likely to have received prior systemic therapy and we're much more likely to have received a prior embolization.
None: And Keith procedures, interventional radiologist can deliver significantly more chemo therapeutic to the tumor when using China versus the amount delivered using standard catheters are critical treatment called for case procedures.
None: And matched cohort comparison.
Patients had fewer 30 day inpatient visits post procedure the non Chinese patients.
None: <unk> HCC patients are more likely to have a post procedure liver transplant and a matched cohort comparison.
None: Trying to cure patients with liver metastases had fewer clinical complications post procedure versus non <unk> patients in a matched cohort comparison.
None: China of care patients with liver metastases had lower rates of post procedure for key versus non Chinese patients.
None: Given that China of patients can achieve outcomes similar to patients with lower disease burden overall, given impressive trends towards better outcomes like the successful liver transplant and lower rates of clinical complications. We believe <unk> is well positioned to become standard of care for the complex pace.
None: <unk>, who may benefit from liver embolization we.
None: We believe that a significant majority of embolization patients are complex patient defined by one or more of the following.
None: Previous embolization or systemic therapy.
None: <unk> nodal or by lobar lesions or significant tumor burden large tumors greater than eight nanometers, multiple comorbidities hypo vascular tumors or diffuse tumors throughout the liver.
None: Given this evidence base, we are positioning <unk> to become standard of care for complex patients and are instructing our sales organization to focus interventional radiologists utilization of China on these complex patients.
None: We're trying to or has been shown to provide benefit versus the standard micro catheter.
It will be executing a multifaceted strategy, including additional clinical evidence educational initiatives comprehensive reimbursement support as well as the pursuit of guideline inclusion.
None: Another critical milestone for the company, what's the progress of melatonin and several phase one clinical trials currently or investigating <unk> as a therapeutic candidate to be activate the immune system within the liver and pancreas and to enable deeper and more durable responses to checkpoint inhibitors.
None: We're initially evaluating <unk> for the treatment of Uveal melanoma with liver metastases.
None: <unk> cellular carcinoma, intrahepatic, cholangiocarcinoma and locally advanced pancreatic ductal adenocarcinoma.
None: We believe delivering melatonin nod to our proprietary FDA cleared device using our <unk> technology creates a potential opportunity to change the paradigm of how liver and pancreatic cancer are treated.
None: Our current pipeline represents a major market opportunity, particularly in locally advanced pancreatic cancer and intra paddock cholangiocarcinoma given the high unmet need in these indications.
None: Phase one data for the <unk> program was presented at a late breaking oral session by our lead investigator from MD Anderson at the society of immunotherapy for cancer meeting in November of 2023.
None: Data presented included safety data on 56, Uveal melanoma patients with liver metastases of whom 65% have failed prior therapy great.
None: Grade three or greater treatment related serious adverse event rate was 11% across all doses and cohorts.
None: Pharmacokinetic data from the <unk>, one trial indicate China is able to achieve high drug levels in the liver.
None: And systemic exposure is limited with drug undetectable by four hours and more than 95% of patients.
None: Among patients with available data.
T DNA clearance was 59% with 86% showing reduction in Cte DNA.
None: Disease control rate was 58% across all dose levels.
None: And at the presumed optimal biologic dose of two milligrams.
None: There was a disease control rate of 81%.
None: Median progression free survival of 11 seven months.
None: In a one year overall survival of 86%.
None: The optimal biologic dose assessment was made based on PFS.
None: S and immune signals, including myeloid derived suppressor cell elimination from liver metastases.
There was also evidence of systemic immune activation as measured by serum cytokines and peripheral immune cell activation.
None: Additionally study data released in November 2023 for patients receiving now a total of Mod via our novel pancreatic infusion device demonstrated immune signals consistent with what we reported for liver metastasized patients, we anticipate reporting the full phase one.
None: Experience in late 2024, and if the data is favorable we plan to begin phase one b enrollment we have completed phase one enrollment in uveal melanoma interim pad at <unk> carcinoma, and he paddled cellular cancer.
We plan to evaluate the data from our phase one clinical studies and determine which indications will progress into further clinical studies.
None: A chosen indication would be one in which we believe there is evidence of significant treatment effect to support a rapid regulatory pathway and strong commercial success.
None: We anticipate that progression of Melitose Ahmad would require additional equity financing.
None: Additionally, we've made meaningful progress in our technology pipeline. This year, we received five 10-K clearance for a larger vessel size of China, China of large and its dedicated guide catheter try Guy currently we're in market valuation for both devices and intend to launch.
None: The second half of 2024.
I want to try and ask provides a significant market expansion since the larger vessel size can access an incremental 25% of the embolization market.
None: Our commercial organization and manufacturing team are fully prepared for the launch.
None: And we will also implement a multifaceted launch strategy to drive strong uptake.
None: In summary, we're a science led company, which keeps the patient at the center of everything we do and we're making important advancements for patient suffering with liver and pancreatic tumors.
None: And this building year for the company.
None: We have made considerable progress in advancing our commercialization efforts for China.
None: Progressing our technology pipeline and <unk> as well as strengthening our overall company operations.
None: With our focus on achieving continued operational and strategic excellence.
None: Confident in our ability to continue the strong growth of trying out.
None: The ability to advance our pipeline.
None: And importantly, deliver both short and long term shareholder value.
None: Finally, I can tell you that I have the confidence because our people who are so committed to our patients our company and delivering for our shareholders I want to express my gratitude to our dedicated team and our shareholders for their unwavering support I look forward to providing future updates on our progress and impact.
With that I'll turn it over to our CFO Shaun Murphy.
Sean Edward Murphy: Good morning, everyone and thank you Barry.
Sean Edward Murphy: I am pleased to announce that <unk> achieved outstanding results in the fourth quarter that ended December 31 2023.
Sean Edward Murphy: Our revenue solely driven by the success of the Tri net device in the U S reached $5 7 million.
None: This sales achievement.
Sean Edward Murphy: It represents the highest quarterly sales in the company's history, reflecting a very strong 77% increase compared to the same period in 2022 and up 10% sequentially compared to the third quarter.
Sean Edward Murphy: <unk> has a record of growth as illustrated on slide one.
Sean Edward Murphy: In which the company has grown at a compound annual growth rate of approximately 50% since our product launch in 2020.
Sean Edward Murphy: This segment of the business, excluding Nellix hollomon clinical costs.
Sean Edward Murphy: Expected to approach breakeven late in 2024.
Sean Edward Murphy: In terms of full year revenues in 2023, we have reached $18 5 million.
Sean Edward Murphy: 49% increase from the prior year.
Sean Edward Murphy: These results can be attributed to several factors, including the adoption of trying to add in new accounts.
Sean Edward Murphy: Increased utilization in existing accounts and the continued expansion dollars force all of which has led to an increase in our market share for 2023, 7% of the liver pace and tear procedures.
These factors as well as permanent reimbursement and real world evidence data.
Sean Edward Murphy: Now as to forecast 2024 growth in excess of 50%.
Sean Edward Murphy: In the fourth quarter, we captured 11, New hospital accounts.
Sean Edward Murphy: And 55 accounts year to date.
Sean Edward Murphy: Our account utilization reached $12 seven units per account and.
Sean Edward Murphy: An increase of $2 eight units or a 29% increase over last year.
Sean Edward Murphy: Finally, we increased our sales team with the funding we received by going public.
Sean Edward Murphy: At the beginning of 2023, we started the year with 10 representatives and by the ended the fourth quarter, we had reached 28.
Sean Edward Murphy: We also added seven clinical specialists to support higher volume territories.
We are proud to report a robust gross margin profile up 90% in the fourth quarter of 2023, and 86% gross margin for the full year compared to 75% in the fourth quarter and 82% for the full year in 2022.
Sean Edward Murphy: This favorable margin profile in 2023 can be attributed to increased factory volumes.
Improved batch yields and other operating efficiencies, including the transition to 100% direct distribution, resulting in a higher average selling price.
Sean Edward Murphy: Our facility in Westminster, Colorado has the capacity to support our growth over the next five years with minimal capital investment.
Sean Edward Murphy: Regarding our investment in research and development expenses in the fourth quarter of 2023 totaled $7 6 million.
Sean Edward Murphy: An increase of 22% from the fourth quarter of 2022.
Full year R&D expenses amounted to $29 5 million, reflecting a 38% increase from the corresponding period in 2022.
Sean Edward Murphy: These investments are primarily related to completing patient enrollment in our three parallel phase one trials.
Sean Edward Murphy: We expect our clinical costs to decrease in 2024, as we finish patient follow up and analyze the trials data.
Sean Edward Murphy: Our dedication to growth is also evident in.
Sean Edward Murphy: Our investment in sales and marketing.
Sean Edward Murphy: In the fourth quarter of 2023, we invested $5 6 million or 45% increase from the fourth quarter of 2022.
Sean Edward Murphy: Full year sales and marketing expenses reached $17 million or 34% increase from 2022.
Sean Edward Murphy: These investments are tied are closely tied to our ongoing sales force expansion.
Sean Edward Murphy: General and administrative expenses for the fourth quarter of 2023 totaled $6 million.
Sean Edward Murphy: Representing an increase of 48% compared to the fourth quarter of 2022.
Sean Edward Murphy: Full year general and administrative expenses of $23 5 million or 88% more than in 2022.
These increased costs include a one time cost of seven 9 million for the year related to completing our D spec process in August of 2023.
Sean Edward Murphy: Our operating losses for the fourth quarter, and 2023 total $14 1 million.
Sean Edward Murphy: Impaired to losses of $11 4 million in the fourth quarter of 2022.
Sean Edward Murphy: Year to date losses in 2023 amounted to $54 2 million compared to losses of $36 4 million in 2022.
Sean Edward Murphy: As mentioned earlier the increased losses in 2023 can be attributable to higher operating expenses and research and development sales and marketing and general administrative expenses.
Sean Edward Murphy: These increased expenses were partially offset by the increased gross margins from increased revenues and improved gross margin profile.
Sean Edward Murphy: As noted in our third quarter earnings call operating earnings provide the most accurate insight into our ongoing profitability.
Sean Edward Murphy: These figures closely align with EBITDA and exclude noncash valuation adjustments related to equity issuance.
Fair value adjustments to tranche and warrant liabilities.
Sean Edward Murphy: And fair value adjustments of contingent earn out.
Sean Edward Murphy: Liabilities.
Sean Edward Murphy: It is important to note that these non cash valuation adjustments may continue to produce material fluctuations in our next earnings results. During the next several years.
Sean Edward Murphy: In 2023, the company raised $61 million.
Sean Edward Murphy: This included an insider private round and a $41 million pipe to support going public.
Sean Edward Murphy: At the end of the year, we had $11 8 million in cash and cash equivalents.
Sean Edward Murphy: We have sufficient liquidity to fund operations.
Sean Edward Murphy: Into the second quarter of 2024.
Sean Edward Murphy: The company is currently in process of obtaining additional liquidity to fund the company through 2020 for.
Sean Edward Murphy: This funding will be a combination of non dilutive sources and the use of our super agreements.
Sean Edward Murphy: And now I'll turn the call back to Mary for closing remarks.
Mary: Thank you Sean.
Mary: Warm welcome to all of you participating in the call today is Chris Alex we're delighted to share our achievements during the quarter, we continue to make meaningful progress in expanding our Chinese business.
Mary: And continue to advance our Purion clinical program.
Mary: Both of which are shaping and exciting future for the company.
None: With that I will open the floor for any questions. You may have your insightful questions are valuable to us.
None: Ladies and gentlemen, if you have a question or comment please press star one on your telephone.
None: <unk> has been answered there were some with yourself from the queue. Please press star one again, we will pause for a moment, while we compile our Q&A roster.
Yes.
None: Okay.
None: Yes.
None: Thanks.
Okay.
Jason Mccarthy: First question comes from Jason Mccarthy with Maxim Group. Your line is open.
Jason Mccarthy: <unk>.
Jason Mccarthy: Hi, Thanks for taking my questions I was just wondering about the inclusion of the clinical spec.
Jason Mccarthy: Specialists for the sales of bio trying of I guess, how many do you have currently sorry, if I missed that and.
Jason Mccarthy: How many centers could be covered or sort of help expand adoption.
Jason Mccarthy: So we this is Mary we currently have seven clinical specialists and typically what they do is once the sales representative opens an account trained the physicians often the clinical specialists will spend some additional time with them until they get up to speed and feel very comfortable using the technology independently.
Jason Mccarthy: So we use those specialists across a wider range of techniques.
Jason Mccarthy: Territories to support utilization.
Jason Mccarthy: Your question is a good one in terms of how they drive adoption. What we have is our own internal metric for when a sales rep. Just doesn't have the capacity to cover all those accounts and then we will deploy the clinical specialists in the territory to have him cover a number of those accounts until we get them up to <unk>.
Jason Mccarthy: Pete.
Pete: Great. Thanks.
None: And then.
Pete: I guess just sort of what are the next steps again.
Pete: The pancreatic work to get through a larger.
Pete: <unk> two trial.
None: So Steven are Steven Katz, our Chief Medical Officer is online Stephen you want to take that question and then I'll follow up as well.
Steven C. Katz: Yeah. Thanks, Jason Thanks for the question right now we're completing enrollment in the phase one single agent <unk> experience. So we need to complete that to establish the safety and feasibility of the drug device combination and help establish what we feel will be the optimal biologic dose and then the next step would be to.
Steven C. Katz: Move into a phase one b in which we combine <unk> delivered with our technology with systemic checkpoint inhibition.
Jason: And we hope to start that by the end of the year, assuming the data from the phase one continues to be favorable.
Jason: Mary.
Mary: No I have nothing to add Stephen added covered it completely.
Mary: Great. That's all for me and thanks again for taking my questions.
Mary: Yes.
Mary: Thank you Jason.
None: Again, ladies and gentlemen, if you have a question or a comment at this time. Please press star one on your telephone.
None: And I'm not showing any further question at this time I'd like to turn the call back over to Mary well. Thank you everyone. We really appreciate it. Thank you Kevin you're welcome ladies and gentlemen. This does conclude today's presentation. You may now disconnect and have a wonderful day.
None: Yeah.
None: Okay.
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